October 2008
Kansas Cigarette Wholesaler Charged In $25M Fraud
By CSD Staff
New 43-count federal indictment also names business associates who allegedly avoided taxes on cigarettes.
The owner of a Kansas wholesale tobacco company and his business associates have been charged in a 43-count federal indictment for a scheme to avoid paying taxes on cigarettes that cost the state of Oklahoma and Indian tribes $25 million in tax revenue, according to the U.S. Department of Justice’s Kansas District.
The investigation was triggered by the Bureau of Alcohol, Tobacco, Firearms and Explosives in April 2006, when a defendant was stopped by the Kansas Highway Patrol in Coffeyville, Kan. The man was transporting a load of cigarettes worth more than $200,000 without required documents and appropriate tax stamps.
On Friday, acting U.S. Attorney Marietta Parker announced the indictment in which the following defendants have been charged:
Gary Lester Hall, 66, of Joplin, Mo., is the president and owner of Sunflower Supply Company in Galena, Kan. The DOJ said Hall also exercised control over other business entities including Discount Tobacco Warehouse Inc. in Joplin, Mo.; National Tobacco Distributors; Rebel Industries, Inc.; Halls Collection, Inc.; Shawnee Tobacco Smoke Shop in Harrah, Okla., and Sunflower Aircraft, Inc.
Thomas Anthony Grantham, 50, of Joplin, Mo., works for Hall managing operations at Sunflower and Rebel.
Keith Dion Noe, 42, of Joplin, Mo., the accountant for Sunflower, Discount Tobacco Warehouse, Rebel and Shawnee Tobacco.
Justin Boyes, 32, of Galena, Kan., worked for Hall at Sunflower and now works for Hall at Discount Tobacco Warehouse.
Danny Ray Davis, 62, of Galena, Kan., worked for Hall at Sunflower and now works for Hall at Rebel.
Jeremy Wayne Hooker, 33, of Salina, Okla., operates the Pipestone Smoke Shop in Vinita, Okla.
James William Coble, 35, of Galena, Kan., worked for Hall at Sunflower and now works for Hall at Rebel.
Justice Michael Berry, 36, of Joplin, Mo., worked for Hall as an accountant.
Three business entities also are named as defendants: Sunflower Supply Company, Inc.; Discount Tobacco Warehouse, Inc.; and Rebel Industries, Inc.
According to the indictment, the states of Kansas and Oklahoma require every pack of cigarettes to carry a stamp showing that taxes have been paid on the cigarettes. In Oklahoma, the tax varies from a low of about 6 cents a pack to a high of $1.03 a pack depending on the location of the retail store at which the cigarettes will be sold.
In addition, the state of Kansas requires wholesalers submit monthly reports stating the number of cigarettes sold on specific dates and the location where they will be sold.
Beginning in January 2005 and continuing through May 2007, the DOJ said Hall and other defendants conspired to defraud the state of Oklahoma and Indian tribes that share in the proceeds of cigarette taxes.
Companies controlled by Hall and other defendants stamped cigarettes for sale at smoke shops in lower tax rates areas when in fact the cigarettes were sold at smoke shops in higher tax rate areas. They carried out the scheme through a variety of means including communications by Internet and fax and money wire transfers, the DOJ said.
The DOJ also alleges that the group funneled payments and orders through a third-party corporation called Gawkskey, Inc.
The government is seeking a money judgment against Hall and the conspirators for the proceeds of the crime. Personal property listed in the forfeiture allegation includes: A Hawker Beechraft Model 4000 jet aircraft, a 2006 BMW auto, and a 2007 Chevrolet Utilimaster Van, as well as various real in Missouri, Kansas and Las Vegas.
Charges in the 43-count indictment includes:
One count of conspiracy to divert cigarettes
Six counts of violating the Cigarette Trafficking Act by failing to keep accurate records
Ten counts of mail fraud involving the mailing of false monthly cigarette reports
Seven counts of wire fraud involving cigarette orders in furtherance of the conspiracy
One count of wire fraud involving the wire transfer of $967,382 from Pipestone Smoke Shop to Sunflower Supply Company
Six counts of interstate transportation in furtherance of money laundering involving the delivery of checks in payment for cigarettes
One count of transporting contraband cigarettes
One count of conspiracy to commit money laundering
Three counts of money laundering
Seven counts of engaging in unlawful monetary transactions.
Upon conviction, the alleged crimes carry penalties that include hundreds of thousands of dollars in fines and 20 or more years in prison.
UPDATE: March 28, 2009
March 28, 2009
Judge allows indicted man to keep jet
A businessman charged with tax fraud will get to keep his private jet for the time being.
A federal judge has allowed Gary Hall of Joplin, Mo., to hold onto the Hawker Beechcraft jet after Hall's business partner agreed to post property he owns in Missouri and Arkansas to cover the jet's $5 million value.
Hall is scheduled to go on trial on April 13, 2010, on a 43-count federal indictment.
He is president and owner of Galena, Kan.-based Sunflower Supply Co. He and seven other people and three businesses face a 43-count federal indictment alleging multiple counts of mail fraud, wire fraud, money laundering and conspiracy to commit money laundering.
Prosecutors claim the group committed $25 million in tobacco tax fraud against Oklahoma and American Indian tribes.
Other defendants include Thomas A. Grantham, of Joplin; Keith D. Noe, of Joplin; Justine Boyes, of Galena; Danny R. Davis, of Galena; Jeremy W. Hooker, of Salina, Okla.; Justice M. Berry, of Joplin; and James W. Coble, of Galena. Sunflower Supply, Joplin-based Discount Tobacco Warehouse and Rebel Industries Inc. are also named in the indictment.
U.S. District Judge Monti Belot last month agreed to continue the case to next year after defense attorneys said they needed more time to prepare.
The ruling also affected Hall's jet, which is listed in the indictment as a forfeitable asset if Hall is convicted.
Belot allowed Hall to substitute property he or business partner Steve Vogel own for the jet, which was seized by federal authorities when he was arrested in October.
The land includes land in Benton County, Ark.; 300 acres in Camden County near the Lake of the Ozarks in Missouri; and some of Vogel's property in Webb City. Vogel said the property in Arkansas and Webb City is planned for commercial development and proceeds from any sales of the property would be held in escrow until the case was finished.
"Gary's always been there for me," Vogel said. "It's a no-brainer. He's always helped me when I needed help."
Vogel said he believes Hall in innocent and that some in the public have unfairly convicted him without a trial.
___
Information from: The Joplin Globe, http://www.joplinglobe.com
Monday, March 30, 2009
Sunday, March 29, 2009
Wild-life Killings Spark New Legislation in NM
March 27, 2009
Killing crop-eating wildlife still legal
By DEBORAH BAKER Associated Press Writer
Gunning down elk or antelope that are chewing on crops remains legal in New Mexico, after a bill putting a halt to the practice died in the Legislature.
It was the latest attempt to tackle a problem that has had ranchers, wildlife groups and state officials tied in knots for decades.
"I am not done with this issue," said Gov. Bill Richardson, who backed legislation that died on the House floor when the 60-day session ended March 21.
The governor said the arbitrary killing of wildlife is unacceptable, and he'll push a bill again next year.
Landowners have long complained about wildlife overrunning private property and destroying hay and other crops.
A dozen years ago, Democratic Sen. Tim Jennings, a Roswell sheep rancher, got a provision tacked on to state law allowing landowners to kill wildlife that pose an immediate threat to crops.
Since then, several high-profile incidents have caught the attention of the public.
A Cimarron-area rancher last year killed or wounded more than three dozen pronghorn antelope with a shotgun because they had been eating his winter wheat.
"We're absolutely concerned that before we can finally get this bill fixed, we'll see more of these wasteful slaughters of wildlife," said Jeremy Vesbach, executive director of the New Mexico Wildlife Federation.
This year, proponents of overturning the so-called Jennings law tried a new approach in their legislation: compensation from the state for landowners who lose crops to wildlife.
"That was a huge step forward," said Caren Cowan, executive director of the New Mexico Cattle Growers' Association, which supported the bill.
"We believe in private property rights but we all appreciate wildlife, and it's just trying to find that balance that works for people," she said.
The bill would have allowed the killing of predators — bears, cougars or bobcats — only if the animals were threatening humans, livestock or pets.
It had broad-based support and a pretty good head of steam, clearing the Senate and its first House committee.
But it got delayed leaving its final committee, House Judiciary. The panel approved it the Thursday night before the session ended, but by the time it got on the calendar for a vote by the full House, it was Saturday morning.
It wasn't voted on by the time the session ended at noon.
"We literally just ran out of time," said Department of Game and Fish Director Tod Stevenson, whose agency lobbied for the bill.
House Judiciary Chairman Al Park, D-Albuquerque, says there was another consideration. A lawmaker — he wouldn't say who — didn't like the bill and had threatened to slow debate if it were brought up. That could have jeopardized other legislation.
"It is disappointing, because it was a really good bill," Park said.
Jennings, who is now president pro tem of the Senate, tried unsuccessfully to get the bill amended to include compensation not just for cultivated crops, but for grass on range land.
Rio Arriba County rancher David Sanchez said that would have improved the bill, although he favored keeping the law as it is.
"We just can't afford for these populations ... to come in and destroy our livelihood," said Sanchez, who has long complained that the Game and Fish Department isn't responsive enough to depredation complaints from northern New Mexico ranchers.
Six years ago, he killed 19 elk on a ranch he managed after the owner obtained a permit for the killings. Richardson booted him off the state Livestock Board and State Land Commissioner Pat Lyons removed him from an agricultural advisory board.
Sanchez said he also didn't like the proposed hike in a hunting fee that would have shored up the fund from which compensation would have been paid.
Stevenson said the bill would have given his agency a way to be more responsive to landowners, through compensation.
"I think you'll see a real continued effort on everybody's part to figure out what we can do other than what's on the books right now," he said.
___
On the Net:
New Mexico Game and Fish Department: http://www.wildlife.state.nm.us/
http://license.icopyright.net/user/viewContent.act?clipid=239091090&mode=cnc&tag=3.5721%3Ficx_id%3D20090327-stolfiler-nm0429
Killing crop-eating wildlife still legal
By DEBORAH BAKER Associated Press Writer
Gunning down elk or antelope that are chewing on crops remains legal in New Mexico, after a bill putting a halt to the practice died in the Legislature.
It was the latest attempt to tackle a problem that has had ranchers, wildlife groups and state officials tied in knots for decades.
"I am not done with this issue," said Gov. Bill Richardson, who backed legislation that died on the House floor when the 60-day session ended March 21.
The governor said the arbitrary killing of wildlife is unacceptable, and he'll push a bill again next year.
Landowners have long complained about wildlife overrunning private property and destroying hay and other crops.
A dozen years ago, Democratic Sen. Tim Jennings, a Roswell sheep rancher, got a provision tacked on to state law allowing landowners to kill wildlife that pose an immediate threat to crops.
Since then, several high-profile incidents have caught the attention of the public.
A Cimarron-area rancher last year killed or wounded more than three dozen pronghorn antelope with a shotgun because they had been eating his winter wheat.
"We're absolutely concerned that before we can finally get this bill fixed, we'll see more of these wasteful slaughters of wildlife," said Jeremy Vesbach, executive director of the New Mexico Wildlife Federation.
This year, proponents of overturning the so-called Jennings law tried a new approach in their legislation: compensation from the state for landowners who lose crops to wildlife.
"That was a huge step forward," said Caren Cowan, executive director of the New Mexico Cattle Growers' Association, which supported the bill.
"We believe in private property rights but we all appreciate wildlife, and it's just trying to find that balance that works for people," she said.
The bill would have allowed the killing of predators — bears, cougars or bobcats — only if the animals were threatening humans, livestock or pets.
It had broad-based support and a pretty good head of steam, clearing the Senate and its first House committee.
But it got delayed leaving its final committee, House Judiciary. The panel approved it the Thursday night before the session ended, but by the time it got on the calendar for a vote by the full House, it was Saturday morning.
It wasn't voted on by the time the session ended at noon.
"We literally just ran out of time," said Department of Game and Fish Director Tod Stevenson, whose agency lobbied for the bill.
House Judiciary Chairman Al Park, D-Albuquerque, says there was another consideration. A lawmaker — he wouldn't say who — didn't like the bill and had threatened to slow debate if it were brought up. That could have jeopardized other legislation.
"It is disappointing, because it was a really good bill," Park said.
Jennings, who is now president pro tem of the Senate, tried unsuccessfully to get the bill amended to include compensation not just for cultivated crops, but for grass on range land.
Rio Arriba County rancher David Sanchez said that would have improved the bill, although he favored keeping the law as it is.
"We just can't afford for these populations ... to come in and destroy our livelihood," said Sanchez, who has long complained that the Game and Fish Department isn't responsive enough to depredation complaints from northern New Mexico ranchers.
Six years ago, he killed 19 elk on a ranch he managed after the owner obtained a permit for the killings. Richardson booted him off the state Livestock Board and State Land Commissioner Pat Lyons removed him from an agricultural advisory board.
Sanchez said he also didn't like the proposed hike in a hunting fee that would have shored up the fund from which compensation would have been paid.
Stevenson said the bill would have given his agency a way to be more responsive to landowners, through compensation.
"I think you'll see a real continued effort on everybody's part to figure out what we can do other than what's on the books right now," he said.
___
On the Net:
New Mexico Game and Fish Department: http://www.wildlife.state.nm.us/
http://license.icopyright.net/user/viewContent.act?clipid=239091090&mode=cnc&tag=3.5721%3Ficx_id%3D20090327-stolfiler-nm0429
A Right to Counsel for the Poor in Civil Cases?
Believe it or not, there is a National Coalition working to mandate a right to assignment of counsel for poor people in certain civil cases; I say its about time!
Click on title above for full article.
Click on title above for full article.
How to Write a Memorandum of Law
Click on title above for a pdf file that outlines clear and simply the format for a memorandum of law.
Saturday, March 28, 2009
Officials Praise Animal Abuse Sentence? Why?
Trinity, the abused American Bulldog who suffered horribly at the hands of her abuser, and eventually lost a leg....
They are happy with this sentence? The guy got little more than a slap on the hand. Abuse like this dog suffered should be a felony, not only based on the suffering of the animal, but as to the callous indifference regarding same by the heartless owner. How much did the owner have to pay towards vet bills? Close your eyes, what do you see?(Nothing)For shame on that judge.
I thought New Mexico was "leading the way" in animal law reform?
Officials praise animal abuse sentence
By Holly Wise/Sun-News Bureau Chief
Posted: 03/28/2009 01:00:00 AM MDT
SILVER CITY — A Grant County man pleaded guilty to a charge of cruelty to animals Monday in an incident that left Trinity, an American bulldog, mangled and abused 18 months ago.
Phillip R. Narvaez was charged with cruelty to animals on Aug. 21, 2008, in Grant County Magistrate Court. He pleaded not guilty during his arraignment but changed the plea on Monday when he appeared, along with his attorney, Mark D'Antonio, before Judge Ron Hall.
According to documents, the court found Narvaez guilty of the charge and he was sentenced to 200 hours of community service and 364 days of unsupervised probation in lieu of 364 days in the Grant County Detention Center.
Narvaez was also instructed by the court to be screened by a mental health organization within 10 days of Monday and to follow any recommendations of counseling. Proof must be shown to the court, according to documents.
A fine of $1,000 was lowered to $300; Narvaez's fine, including court costs, totaled $367.
The case has been ongoing since August 2007, when Trinity was found on Ridge Road by Mary Billings, an advocate of abandoned pets and animals. Trinity's right hind leg was mangled and nearly two inches of bone was exposed; her foot had rotted and turned black.
As a result of her injuries, her leg had to be amputated.
Now two years old, and a year-and-a-half after her rescue, Trinity is home with Ray Davis, a Silver City man who adopted her after reading about her ordeal in the Sun-News last year.
"She must be a very forgiving animal, because she seems to like everyone, even after being tortured and abused," said Davis in an e-mail to the Sun-News.
The case breaks new ground in Grant County and Silver City, where animal cruelty has recently grabbed the attention of local leaders.
"What it really means for Grant County and Silver City is that we have a judge who is not going to be lenient to people who abuse animals," Davis said.
City Councilman Tom Nupp is at the forefront of completely rewriting the town's animal ordinance and addressing issues of animal cruelty.
"It specifically addresses many animal cruelty issues," he said, and will provide animal control officers some "teeth" when dealing with these cases.
A good portion of the ordinance deals with the proper care and control of a pet, such as the dimensions of dog houses and the size of yards. A committee has worked on the ordinance for six months, Nupp said.
"The ordinance I'm working on will come to the council on April 14 for the first reading," he said.
Davis thanked Grant County Crimestoppers for its help in posting fliers and offering a $1,500 award for incriminating evidence against the perpetrator.
"They were really instrumental in keeping this going," he said.
Sandra Suhr, president of the Grant County Crimestoppers, said she was in court on Monday during Narvaez's hearing.
"I would have preferred he got some of that jail sentence imposed and not all suspended," she said. "But overall, I think it was pretty fair."
Crimestoppers was responsible for reviving the case nearly a year after the incident, she said.
"I hope it sets a precedent for a little more prosecution of animal cruelty cases," she said. "I hope to get more people to come forward in these cases."
Monica Garcia, communications manager for Animal Protection of New Mexico, said she had the "privilege" of meeting Trinity.
"She's a beautiful creature," she said. "We think it's a shame the perpetrator didn't get jail time, but we're glad that he was sentenced."
"Animal Protection of New Mexico is delighted to have made an outreach in the Silver City area that will hopefully mean a stronger relationship between the residents of Grant County and APNM," she added.
Holly Wise can be reached at hwise@scsun-news.com; (575) 538-5893
http://www.topix.net/forum/source/silver-city-sun-news/TQVC87VCD2RPO51D7
Wednesday, March 25, 2009
Saving Dancing Star
You all remember the Dancing Star Farm Animal Sanctuary that was euthanising its wards and caused a big furor in the animal rights / animal welfare world? We started a petition (click on title above to see)
and Thanks to some whistleblower employees and the intervention of Farm Sanctuary and other animal welfare orgs, we managed to stop the killing. Now, apparently, an investiagation into the killings has begun. This is very good news for us, and the animals of Dancing Star Sanctury;
AG asked to probe Dancing Star animal slaughter
Posted: Monday, March 23, 2009 3:56 pm
Sue Stiles' dream was to take care of sick and elderly animals after she was gone.
By KAREN VELIE
Systematic killing of protected animals at the Dancing Star Foundation’s Cayucos sanctuary and excessive salaries of a husband-wife team of self-proclaimed environmentalists may violate the non-profit corporation’s filings with the state of California.
Lucy Sheldon, with assistance from the Animal Place Sanctuary, applied to California’s Secretary of State for the non-profit corporation’s filings and said she will send them to the Attorney General with a request seeking an investigation.
Sheldon and the Animal Place will join complaints of numerous animal welfare groups from throughout the nation who have asked the Attorney General’s office to determine if Tobias and Morrison’s management of the Dancing Star Foundation violates non-profit corporation and IRS laws.
Dancing Star officials have not responded to requests for comment.
Many healthy animals entrusted to Dancing Star Foundation’s oceanside sanctuary have been euthanized in recent months after being placed on a “kill list” -- prepared with the help of a veterinarian and weighted heavily by economic considerations. These factors included individual animals’ costs relating to food and medication needs.
During the past few months, 30 of the sanctuary’s 200 wards were slaughtered.
Sue Stiles started the foundation in 1993 with a focus on providing a refuge for elderly and handicapped horses, cows, and burros. She reportedly endowed the foundation with more than $60 million to keep her dream alive." Stiles died in 2002 after putting her mission statement on record:
“The purpose of this corporation shall be (1) for the prevention of cruelty and the provisions of care for domestic animals and, (2) to make grants, donations, gifts, and contributions from its net income or assets, exclusively for charitable, scientific, literary, artistic, or educational purposes…” according to amended bylaws Stiles submitted during her illness, on March 11, 1998.
Former and present employees of the Dancing Star Foundation claim that its top officers, Michael Tobias and Jane Gray Morrison, have vacillated between claims that either economic issues or quality of life concerns prompted their kill policy. According to the foundation’s 2007 IRS Form 990 filed Oct. 6, 2008, the group had more than $43 million in assets. Tobias, as president, receives a yearly salary of $285,500; Vice President Morrison, $244,000; and Vice President of Finance Don Cannon, $240,000.
These salaries may conflict with Stiles’ original plans, according to state filings.
“The property of this corporation is irrevocably donated to charitable sources and no part of the net income or assets shall ever inure to the benefit of any director, officer, or member thereof or to the benefit of any private person,” according to Dancing Stars’ 1993 Articles of Corporation and a 1998 version Stiles amended.
Laws prohibit running a nonprofit to advantage an individual. Tax laws passed in the 1990s give the IRS authority to require excessively-compensated executives, compared to median incomes of executives of similar profit entities, to repay a portion of their income, along with a 25 percent penalty.
Tags:None Printer-friendly format
http://calcoastnews.com/news.php?viewStory=172140
The "Deer-Sleigher" Cases, MN
Prosecutors want to combine trials in snowmobile deer slaughter
Associated Press
Last update: March 25, 2009 - 8:32 AM
WAUPACA, Wis. - A prosecutor in Waupaca County wants to consolidate the trials of three men accused of using their snowmobiles to kill some deer for the thrill of it.
Robby and Rory Kuenzi and Nicholas Hermes are accused of rounding up the deer with their sleds, then running them down Jan. 9 in the Town of Lind.
The Kuenzi brothers have pleaded not guilty. Hermes has not yet entered pleas for the felony charges against him.
The attorney for Rory Kuenzi, of Weyauwega, told Waupaca County Judge Philip Kirk Tuesday that he plans to file a motion seeking a change of venue because of publicity about the case.
___
Information from: WLUK-TV, http://www.fox11online.com
http://www.startribune.com/local/41822042.html?elr=KArks:DCiUHc3E7_V_nDaycUiacyK
Associated Press
Last update: March 25, 2009 - 8:32 AM
WAUPACA, Wis. - A prosecutor in Waupaca County wants to consolidate the trials of three men accused of using their snowmobiles to kill some deer for the thrill of it.
Robby and Rory Kuenzi and Nicholas Hermes are accused of rounding up the deer with their sleds, then running them down Jan. 9 in the Town of Lind.
The Kuenzi brothers have pleaded not guilty. Hermes has not yet entered pleas for the felony charges against him.
The attorney for Rory Kuenzi, of Weyauwega, told Waupaca County Judge Philip Kirk Tuesday that he plans to file a motion seeking a change of venue because of publicity about the case.
___
Information from: WLUK-TV, http://www.fox11online.com
http://www.startribune.com/local/41822042.html?elr=KArks:DCiUHc3E7_V_nDaycUiacyK
Petland Sued for Selling Unhealthy Puppies
On Monday, March 16, a class action lawsuit was finally filed against Petland
Inc., alleging the pet store chain is a distributor of "factory-produced"
puppies, and that it conspired to sell unhealthy puppy mill puppies in several
states to unknowing consumers. The suit was brought with the help of The Humane
Society of the United States.
The suit claims that Petland's marketing of the puppies "violated federal law
and numerous state consumer protection laws by misleading thousands of consumers
across the country into believing the puppies sold in Petland stores are healthy
and come from high-quality breeders." According to interview between the Ohio
media outlet the Chilco Gazette, and Jonathan Loworn, vice president and chief
counsel for Animal Protection Litigation at The Humane Society of the United
States, Petland put profits before the health of the puppies.
"Families often bear the great expense of veterinary treatment for sick and
unhealthy dogs, or the terrible anguish of losing a beloved family pet," Lovvorn
said. "This industry has been systematically lying to consumers for years about
the source of the dogs they sell, and it's long past time for a reckoning."
Members of the class action are seeking a full refund of all the monies they
paid for puppies purchased at Petland, and "consequential damages resulting from
Defendant's fraudulent conduct, interest thereon and any amount by which
Defendants have been unjustly enriched, plus treble damages and any additional
relief to which they may be entitled under state consumer protection laws ..."
Petland Unhealthy Puppies Class Action Legal Help
If you or a loved one has suffered damages in this case, please click the link
below and your complaint will be sent to a lawyer who may evaluate your claim at
no cost or obligation.
http://www.lawyersandsettlements.com/case/petland-class-action-over-unhealthy-pu\
ppies-petland.html?ref=newsletter_bca_petland-class-action-over-unhealthy-puppie\
s-petland
Mutual Funds, a gamble & a Lawsuit
Mutual Funds: When Investing and Gambling Are Too Close For Comfort
March 19, 2009. By Heidi Turner
Tacoma, WA: You probably did not realize that investing in mutual funds was so similar to gambling until you suffered serious mutual fund losses. You were probably told that investing in mutual funds was a smart move—that they were safe and secure. Unfortunately, you learned too late that not only is investing like gambling, in some cases mutual funds are directly linked to gambling. Luckily, mutual fund ERISA laws can help you to protect your investment.
While some investors learned that their money was invested in companies involved in illegal gambling enterprises, others have filed a lawsuit alleging that they were charged excessive fees for their mutual funds. In fact, the US Supreme Court has said it will make a decision on an excessive fees lawsuit.
The question at issue is whether a plaintiff who claims that an investment advisor charged excessive fees must also prove that the advisor misled fund directors to get them to approve the fees. The judges will also review a ruling for a US appeals court that mutual fund fees should not be capped. Last year, the appeals court found, "A fiduciary must make full disclosure and play no tricks but is not subject to a cap on compensation. The trustees (and in the end investors, who vote with their feet and dollars), rather than a judge or jury, determine how much advisory services are worth."
The appeals court also ruled that the lawsuit could not advance unless the shareholder could prove that the financial advisor misled the directors of the mutual fund. Those directors would have approved the fee in the first place.
The lawsuit was filed against Harris Associates L.P. and alleges that the company's fees were so high that they were in violation of the federal Investment Company Act. Although lower courts dismissed the lawsuit, plaintiffs argue that the fees were so high that they were not reasonable given the services rendered. Plaintiffs also claim that they were charged more for management of the mutual funds than for management of the pension funds, a third-party client.
Critics of mutual funds have argued that the fees associated with mutual funds are too high and only serve to make Wall Street richer while penalizing working Americans. They cite the difference in fees between mutual fund investors as compared to pension funds. Pension funds traditionally come with lower fees even though the managers perform the same services. Critics also say that investors in 401(k)s and retirement plans are stuck with the funds and fund managers that their employers choose—so they have no ability to walk away from funds that charge excessive fees.
While some investors argue about their mutual fund fees, others are still reeling from the news that their money was invested in companies involved in illegal activities. They say they were surprised to learn that their mutual funds were invested with companies that were apparently upfront about violating American laws. The investors say they lost a lot of money when the companies were investigated and indicted by US authorities.
These investors have filed a lawsuit against their fund managers, alleging that the managers knew or should have known about the illegal gambling activities. They say their money was put at risk by the decisions made by their fund managers and advisors. Plaintiffs are now hoping they can recover their lost money through a lawsuit.
Mutual Fund Legal Help
If you have suffered losses in this case, please send your complaint to a lawyer who will review your possible [Mutual Fund Lawsuit] at no cost or obligation.
http://www.lawyersandsettlements.com/features/mutual-funds-fund-losses-erisa-15.html?ref=newsletter_bca_mutual-funds-fund-losses-erisa-15
Sunday, March 8, 2009
The American System of JustUS: A Judges "Cash for Kids" Scandal / Kickbacks from Detention Facility
Jailed for a MySpace parody, the student who exposed America's cash for kids scandal
Judges deny kickbacks for imprisoning youths
Ed Pilkington in Wilkes-Barre, Pennsylvania
The Guardian, Saturday 7 March 2009
Hillary Transue was 14 when she carried out her prank. She built a hoax MySpace page in which she posed as the vice-principal of her school, poking fun at her strictness. At the bottom of the page she added a disclaimer just to make sure everyone knew it was a joke. "When you find this I hope you have a sense of humour," she wrote.
Humour is not in abundance, it seems, in Luzerne County, northern Pennsylvania. In January 2007 Transue was charged with harassment. She was called before the juvenile court in Wilkes-Barre, an old coal town about 20 miles from her home.
Less than a minute into the hearing the gavel came down. "Adjudicated delinquent!" the judge proclaimed, and sentenced her to three months in a juvenile detention centre. Hillary, who hadn't even presented her side of the story, was handcuffed and led away. But her mother, Laurene, protested to the local law centre, setting in train a process that would uncover one of the most egregious violations of children's rights in US legal history.
Last month the judge involved, Mark Ciavarella, and the presiding judge of the juvenile court, Michael Conahan, pleaded guilty to having accepted $2.6m (£1.8m) from the co-owner and builder of a private detention centre where children aged from 10 to 17 were locked up.
The cases of up to 2,000 children put into custody by Ciavarella over the past seven years - including that of Transue - are now being reviewed in a billowing scandal dubbed "kids for cash". The alleged racket has raised questions about the cosy ties between the courts and private contractors, and about the harsh treatment meted out to adolescents.
Alerted by Laurene Transue, the Juvenile Law Centre in Wilkes-Barre began to uncover scores of cases in which teenagers had been summarily sent to custody by Ciavarella, dating as far back as 1999. One child was detained for stealing a $4 jar of nutmeg, another for throwing a sandal at her mother, a third aged 14 was held for six months for slapping a friend at school.
Half of all the children who came before Ciavarella had no legal representation, despite it being a right under state law. The Juvenile Law Centre has issued a class action against the two judges and other implicated parties in which it seeks compensation for more than 80 children who it claims were victims of injustice.
The prosecution charge sheet alleges that from about June 2000 to January 2007 Ciavarella entered into an "understanding" with Conahan to concoct a scheme to enrich themselves. The two judges conspired to strip the local state detention centre of funding, diverting the money to a private company called PA Child Care which it helped to build a new facility in the area.
In January 2002, prosecutors allege, Conahan signed a "placement guarantee agreement" with the firm to send teenagers into their custody. Enough children would be detained to ensure the firm received more than $1m a year in public money. In late 2004 a long-term deal was secured with PACC worth about $58m.
In return, the prosecutors allege, the judges received at least $2.6m in kickbacks. They bought a condominium in Florida with the proceeds. PACC's then owner, Bob Powell, who has not been charged, used to moor his yacht at a nearby marina. He called the boat "Reel Justice".
For a man who has agreed to serve more than seven years in jail as part of a plea bargain, Ciavarella comes across as remarkably unflustered. He invited the Guardian into his Wilkes-Barre home where he remains free on bail pending sentencing.
Though he pleaded guilty to conflict of interest and evasion of taxes, he insists that he took the money in all innocence, assuming it to be a legitimate "finder's fee" from the private company for help in building the detention centre. He denies sending children to custody in return for kickbacks. "Cash for kids? It never happened. People have jumped to conclusions - I didn't do any of these things."
He says that he regarded his court as a place of treatment for troubled adolescents, not of punishment. "I wanted these children to avoid becoming statistics in an adult world. That's all it was, trying to help these kids straighten out their lives."
As evidence, Ciavarella claims the percentage of children he sentenced to custodial placements remained steady from 1996, when he was appointed to the court, until he stood down from it in 2008. Yet the facts suggest otherwise.
For the first two years of his term his rate of custodial sentencing was static at 4.5% of cases. In 1999 - shortly before he allegedly began the racket with Conahan, according to prosecutors - it suddenly shot up to 13.7%. By 2004 it had risen to up to 26% of all teenagers entering his court.
Ciavarella hopes that with good behaviour he may spend only six years in jail.
Hillary Transue, meanwhile, is now 17 and in high school. She spent a month in detention for the parody. For many months afterwards she was ostracised by friends and neighbours, labelled a delinquent.
"It's nice to see him on the other side of the bench," she says of Ciavarella. "I'm sure he understands now how it feels."
--------------------------
UPDATE: March 29, 2009
Pa. youth court corruption creates legal headache
By MICHAEL RUBINKAM and MARK SCOLFORO Associated Press Writers
The decision this week to overturn hundreds of juvenile convictions was a significant and dramatic first step toward untangling the legal mess left behind by a judicial corruption case in northeastern Pennsylvania.
It may also have been the easy part.
The judge handling the matter for the state Supreme Court now faces the more daunting task of figuring out how to restore the legal rights of children convicted of serious offenses without endangering the public's safety or creating new problems of restitution or sentencing.
"It's going to be an extraordinarily difficult matter to conclude," Berks County Senior Judge Arthur E. Grim, appointed to review thousands of cases handled by a disgraced Luzerne County judge dating to 2003, said Friday. "At this point, I'm not prepared to tell you what the answer will be, because I don't know."
The former judge, Mark A. Ciavarella Jr., could get more than seven years in federal prison after pleading guilty to fraud and tax charges last month in a scheme with another judge to pocket $2.6 million by stocking private detention centers with young offenders.
Many of the offenders were given very brief hearings without lawyers, then shipped off to camps or detention centers for minor offenses, such as lampooning a teacher or simple assault.
Other youngsters, though, were convicted of more serious offenses, such as car theft, drug dealing and assault — but still may not have been given the benefit of due process and must be addressed. Some victims are wary of how those cases will be handled.
After Mike Gunshannon caught a youth trying to break into his car in 2003, police discovered the young burglar in possession of a thick stack of stolen credit cards. The offender went before Ciavarella.
Gunshannon, 53, of Kingston, said many of the kids who landed in the judge's courtroom ultimately deserved what they got — and he fears the victims are being forgotten in the furor over the misconduct.
"If the judge was making his decisions based on personal gain, then he should be locked up for longer than they're giving him. But I don't see these kids necessarily as innocent victims," Gunshannon said. "We've taught children you can violate the rules, and if you (complain) long enough, you can get away with it."
Still, countless questions remain.
Will defendants with voided convictions be allowed to recoup fines, restitution or other payments they have already made? What will happen to adults whose juvenile convictions have affected their subsequent sentencing in adult court?
Should the state simply release seriously troubled children who need substance abuse services or other counseling? How should the rights of crime victims like Gunshannon fit into the picture? Should some defendants get a new trial?
"It's pretty clear that every one of these kids has a right to a retrial," said Robert Schwartz, executive director of the nonprofit Juvenile Law Center in Philadelphia. "But it's also fairly obvious that it's not in the public interest to retry thousands of cases."
The Juvenile Law Center's complaints about injustice in Luzerne County's juvenile court system helped bring the scandal to light. The center has also filed one of the three lawsuits against Ciavarella, retired Luzerne County Judge Michael T. Conahan and others tied to the scandal. Conahan, Ciavarella's co-defendant, also pleaded guilty and awaits federal sentencing.
Grim first must determine which defendants are covered by the state Supreme Court's expungement order, issued Thursday. In the next phase, he will consider cases that involve more serious offenses.
"We think the bulk of the kids up there are entitled to have the records erased and get a fresh start in life," Schwartz said. "But there are going to be some — we don't know how many — where the public safety issues will emerge in a different way and the victim issues will emerge in a different way."
"There are kids who, even though the process may have been tainted, may ultimately have needed the kind of treatment that comes with the juvenile justice system," he said. "It may be they had serious drug and alcohol problems and they're getting treatment for the first time in their lives because they were adjudicated and placed."
Restitution plays an important role in Pennsylvania's juvenile courts and will factor into how the court disposes of the Ciavarella cases, said Jim Anderson, executive director of the state Juvenile Court Judges' Commission.
Also, a juvenile offense can raise the minimum sentence that an adult defendant gets in Pennsylvania, so any conclusions about expungement could, in some cases, result in early release of state prison inmates.
"Juvenile adjudication may prevent someone from being hired for certain kinds of jobs, may prevent someone from owning a firearm, all kinds of things," Anderson said.
Grim, who is chairman of the Juvenile Court Judges' Commission, said Friday that in some cases, a new trial might be the best solution. But that raises another problem — Pennsylvania law prevents retrial of anyone who is at least 22 years old as a juvenile.
"That certainly has implications for what will happen," Anderson said. "Does that mean in a very serious case the individual now would be subject to (an adult) criminal proceeding? I think that would be unlikely."
___
Mark Scolforo reported from Harrisburg, Pa.
http://license.icopyright.net/user/viewContent.act?clipid=239091096&mode=cnc&tag=3.5721%3Ficx_id%3D20090327-stolfiler-pa0639
Judges deny kickbacks for imprisoning youths
Ed Pilkington in Wilkes-Barre, Pennsylvania
The Guardian, Saturday 7 March 2009
Hillary Transue was 14 when she carried out her prank. She built a hoax MySpace page in which she posed as the vice-principal of her school, poking fun at her strictness. At the bottom of the page she added a disclaimer just to make sure everyone knew it was a joke. "When you find this I hope you have a sense of humour," she wrote.
Humour is not in abundance, it seems, in Luzerne County, northern Pennsylvania. In January 2007 Transue was charged with harassment. She was called before the juvenile court in Wilkes-Barre, an old coal town about 20 miles from her home.
Less than a minute into the hearing the gavel came down. "Adjudicated delinquent!" the judge proclaimed, and sentenced her to three months in a juvenile detention centre. Hillary, who hadn't even presented her side of the story, was handcuffed and led away. But her mother, Laurene, protested to the local law centre, setting in train a process that would uncover one of the most egregious violations of children's rights in US legal history.
Last month the judge involved, Mark Ciavarella, and the presiding judge of the juvenile court, Michael Conahan, pleaded guilty to having accepted $2.6m (£1.8m) from the co-owner and builder of a private detention centre where children aged from 10 to 17 were locked up.
The cases of up to 2,000 children put into custody by Ciavarella over the past seven years - including that of Transue - are now being reviewed in a billowing scandal dubbed "kids for cash". The alleged racket has raised questions about the cosy ties between the courts and private contractors, and about the harsh treatment meted out to adolescents.
Alerted by Laurene Transue, the Juvenile Law Centre in Wilkes-Barre began to uncover scores of cases in which teenagers had been summarily sent to custody by Ciavarella, dating as far back as 1999. One child was detained for stealing a $4 jar of nutmeg, another for throwing a sandal at her mother, a third aged 14 was held for six months for slapping a friend at school.
Half of all the children who came before Ciavarella had no legal representation, despite it being a right under state law. The Juvenile Law Centre has issued a class action against the two judges and other implicated parties in which it seeks compensation for more than 80 children who it claims were victims of injustice.
The prosecution charge sheet alleges that from about June 2000 to January 2007 Ciavarella entered into an "understanding" with Conahan to concoct a scheme to enrich themselves. The two judges conspired to strip the local state detention centre of funding, diverting the money to a private company called PA Child Care which it helped to build a new facility in the area.
In January 2002, prosecutors allege, Conahan signed a "placement guarantee agreement" with the firm to send teenagers into their custody. Enough children would be detained to ensure the firm received more than $1m a year in public money. In late 2004 a long-term deal was secured with PACC worth about $58m.
In return, the prosecutors allege, the judges received at least $2.6m in kickbacks. They bought a condominium in Florida with the proceeds. PACC's then owner, Bob Powell, who has not been charged, used to moor his yacht at a nearby marina. He called the boat "Reel Justice".
For a man who has agreed to serve more than seven years in jail as part of a plea bargain, Ciavarella comes across as remarkably unflustered. He invited the Guardian into his Wilkes-Barre home where he remains free on bail pending sentencing.
Though he pleaded guilty to conflict of interest and evasion of taxes, he insists that he took the money in all innocence, assuming it to be a legitimate "finder's fee" from the private company for help in building the detention centre. He denies sending children to custody in return for kickbacks. "Cash for kids? It never happened. People have jumped to conclusions - I didn't do any of these things."
He says that he regarded his court as a place of treatment for troubled adolescents, not of punishment. "I wanted these children to avoid becoming statistics in an adult world. That's all it was, trying to help these kids straighten out their lives."
As evidence, Ciavarella claims the percentage of children he sentenced to custodial placements remained steady from 1996, when he was appointed to the court, until he stood down from it in 2008. Yet the facts suggest otherwise.
For the first two years of his term his rate of custodial sentencing was static at 4.5% of cases. In 1999 - shortly before he allegedly began the racket with Conahan, according to prosecutors - it suddenly shot up to 13.7%. By 2004 it had risen to up to 26% of all teenagers entering his court.
Ciavarella hopes that with good behaviour he may spend only six years in jail.
Hillary Transue, meanwhile, is now 17 and in high school. She spent a month in detention for the parody. For many months afterwards she was ostracised by friends and neighbours, labelled a delinquent.
"It's nice to see him on the other side of the bench," she says of Ciavarella. "I'm sure he understands now how it feels."
--------------------------
UPDATE: March 29, 2009
Pa. youth court corruption creates legal headache
By MICHAEL RUBINKAM and MARK SCOLFORO Associated Press Writers
The decision this week to overturn hundreds of juvenile convictions was a significant and dramatic first step toward untangling the legal mess left behind by a judicial corruption case in northeastern Pennsylvania.
It may also have been the easy part.
The judge handling the matter for the state Supreme Court now faces the more daunting task of figuring out how to restore the legal rights of children convicted of serious offenses without endangering the public's safety or creating new problems of restitution or sentencing.
"It's going to be an extraordinarily difficult matter to conclude," Berks County Senior Judge Arthur E. Grim, appointed to review thousands of cases handled by a disgraced Luzerne County judge dating to 2003, said Friday. "At this point, I'm not prepared to tell you what the answer will be, because I don't know."
The former judge, Mark A. Ciavarella Jr., could get more than seven years in federal prison after pleading guilty to fraud and tax charges last month in a scheme with another judge to pocket $2.6 million by stocking private detention centers with young offenders.
Many of the offenders were given very brief hearings without lawyers, then shipped off to camps or detention centers for minor offenses, such as lampooning a teacher or simple assault.
Other youngsters, though, were convicted of more serious offenses, such as car theft, drug dealing and assault — but still may not have been given the benefit of due process and must be addressed. Some victims are wary of how those cases will be handled.
After Mike Gunshannon caught a youth trying to break into his car in 2003, police discovered the young burglar in possession of a thick stack of stolen credit cards. The offender went before Ciavarella.
Gunshannon, 53, of Kingston, said many of the kids who landed in the judge's courtroom ultimately deserved what they got — and he fears the victims are being forgotten in the furor over the misconduct.
"If the judge was making his decisions based on personal gain, then he should be locked up for longer than they're giving him. But I don't see these kids necessarily as innocent victims," Gunshannon said. "We've taught children you can violate the rules, and if you (complain) long enough, you can get away with it."
Still, countless questions remain.
Will defendants with voided convictions be allowed to recoup fines, restitution or other payments they have already made? What will happen to adults whose juvenile convictions have affected their subsequent sentencing in adult court?
Should the state simply release seriously troubled children who need substance abuse services or other counseling? How should the rights of crime victims like Gunshannon fit into the picture? Should some defendants get a new trial?
"It's pretty clear that every one of these kids has a right to a retrial," said Robert Schwartz, executive director of the nonprofit Juvenile Law Center in Philadelphia. "But it's also fairly obvious that it's not in the public interest to retry thousands of cases."
The Juvenile Law Center's complaints about injustice in Luzerne County's juvenile court system helped bring the scandal to light. The center has also filed one of the three lawsuits against Ciavarella, retired Luzerne County Judge Michael T. Conahan and others tied to the scandal. Conahan, Ciavarella's co-defendant, also pleaded guilty and awaits federal sentencing.
Grim first must determine which defendants are covered by the state Supreme Court's expungement order, issued Thursday. In the next phase, he will consider cases that involve more serious offenses.
"We think the bulk of the kids up there are entitled to have the records erased and get a fresh start in life," Schwartz said. "But there are going to be some — we don't know how many — where the public safety issues will emerge in a different way and the victim issues will emerge in a different way."
"There are kids who, even though the process may have been tainted, may ultimately have needed the kind of treatment that comes with the juvenile justice system," he said. "It may be they had serious drug and alcohol problems and they're getting treatment for the first time in their lives because they were adjudicated and placed."
Restitution plays an important role in Pennsylvania's juvenile courts and will factor into how the court disposes of the Ciavarella cases, said Jim Anderson, executive director of the state Juvenile Court Judges' Commission.
Also, a juvenile offense can raise the minimum sentence that an adult defendant gets in Pennsylvania, so any conclusions about expungement could, in some cases, result in early release of state prison inmates.
"Juvenile adjudication may prevent someone from being hired for certain kinds of jobs, may prevent someone from owning a firearm, all kinds of things," Anderson said.
Grim, who is chairman of the Juvenile Court Judges' Commission, said Friday that in some cases, a new trial might be the best solution. But that raises another problem — Pennsylvania law prevents retrial of anyone who is at least 22 years old as a juvenile.
"That certainly has implications for what will happen," Anderson said. "Does that mean in a very serious case the individual now would be subject to (an adult) criminal proceeding? I think that would be unlikely."
___
Mark Scolforo reported from Harrisburg, Pa.
http://license.icopyright.net/user/viewContent.act?clipid=239091096&mode=cnc&tag=3.5721%3Ficx_id%3D20090327-stolfiler-pa0639
Subscribe to:
Posts (Atom)
Posts
