Private Equity CEO Enters into Non-prosecution Agreement on International Tax Fraud Scheme and Agrees to Pay $139 Million, to Abandon $182 Million in Charitable Contribution Deductions, and to Cooperate with Government Investigations

Robert F. Smith, the Chairman and Chief Executive Officer of a San Francisco based private equity company, entered into a Non-Prosecution Agreement (the agreement) with the Department of Justice, for his involvement from 2000 through 2015 in an illegal scheme to conceal income and evade millions in taxes by using an offshore trust structure and offshore bank accounts, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Tax Division, U.S. Attorney David L. Anderson for the Northern District of California, and Chief of Internal Revenue Service (IRS) Criminal Investigation Jim Lee. In that agreement, Smith admits his involvement in the illegal scheme and agrees to cooperate with ongoing investigations and to pay back taxes and penalties in full. 

“It is never too late to do the right thing,” said U.S. Attorney Anderson. “It is never too late to tell the truth. Smith committed serious crimes, but he also agreed to cooperate. Smith’s agreement to cooperate has put him on a path away from indictment.”

According to the agreement, Smith, a resident of Austin, Texas, formed the Excelsior Trust in Belize, and a shell company, Flash Holdings, in Nevis in 2000. Smith used third-parties to conceal his beneficial ownership and control of the Excelsior Trust and Flash Holdings. In reality, Smith controlled both offshore structures and made all substantive decisions regarding Flash Holdings’ operations, transactions, income, investments and assets. Smith used the Excelsior Trust to conceal his ultimate ownership and control over Flash Holdings. He further used Flash Holdings to hide his interest in private equity investments. Smith admits that he formed these foreign entities in order to use them to avoid the payment of U.S. taxes.

Furthermore, Smith admits that he knowingly and intentionally used the Excelsior Trust and Flash Holdings and their associated foreign bank accounts in the British Virgin Islands and Switzerland to conceal from the IRS, and the U.S. Treasury Department, income earned and distributed to Flash Holdings from private equity funds. As a result of the overall scheme, Smith willfully did not report to the IRS over $200 million of partnership income. Smith also failed to report his ownership of his foreign bank accounts in BVI and Switzerland as required by law.

Over the years, Smith used millions of this unreported income to acquire and make improvements to real estate used for his personal benefit. Smith admits that, in 2005, he used approximately $2.5 million in untaxed funds to purchase and renovate a vacation home in Sonoma, California. In 2010, Smith again used untaxed funds to purchase two ski properties and a piece of commercial property in France. In 2011 and 2012, Smith used approximately $13 million of untaxed funds to build and make improvement to a residence in Colorado and to fund charitable activities at the property.

Under the terms of the agreement, Smith has agreed to continue cooperating with the Department of Justice in other related investigations. Further, Smith has agreed to pay approximately $56 million in taxes and penalties stemming from the unreported income and another $82 million in penalties stemming from his concealment of his offshore bank accounts. Taken altogether, Smith will pay more than $139 million in taxes and penalties.

Additionally, Smith agrees to abandon his protective claims for a refund totaling approximately $182 million that were filed with the IRS. The protective refund claims consisted, in part, of claims filed with the IRS for charitable contribution deductions on Sept. 21, 2018, and Oct. 11, 2019. As a result of the agreement, Smith shall take no further direct or indirect tax benefit from such claims.

Principal Deputy Assistant Attorney General Zuckerman, U.S. Attorney Anderson, and Jim Lee, Chief of IRS-Criminal Investigation, commended special agents of IRS-Criminal Investigation, who conducted the investigation, and thanked Senior Litigation Counsel Corey Smith of the Tax Division, Assistant U.S. Attorney Michael G. Pitman, and Trial Attorneys Lee Langston and Christopher Magnani of the Tax Division, who handled the case. The Justice Department’s Office of International Affairs of the Department’s Criminal Division also provided extensive assistance in this matter.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Hits: 1

News Network

  • Cryptocurrency Fraudster Pleads Guilty to Securities Fraud and Money Laundering Charges in Multi-Million Dollar Investment Scheme
    In Crime News
    A citizen of Sweden pleaded guilty to securities fraud, wire fraud, and money laundering charges that defrauded more than 3,500 victims of more than $16 million.
    [Read More…]
  • United States and Partners Promote Accountability for Corruption and Human Rights Abuse
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Secretary Antony J. Blinken And Kenyan Cabinet Secretary for Foreign Affairs Ambassador Raychelle Omamo Before Their Meeting
    In Crime Control and Security News
    Antony J. Blinken, [Read More…]
  • Passengers with Disabilities: Airport Accessibility Barriers and Practices and DOT’s Oversight of Airlines’ Disability-Related Training
    In U.S GAO News
    What GAO Found Passengers with disabilities face infrastructure, information, and customer service barriers at U.S. airports, according to representatives of selected airports, disability advocacy organizations, as well as a review of relevant literature. Infrastructure barriers can include complex terminal layouts and long distances between gates and can be difficult for some to navigate. Essential travel information is not always available in a format accessible to all. For example, a person with hearing loss could miss crucial gate information that is solely provided over a loudspeaker. A passenger might not receive appropriately sensitive service, such as wheelchair assistance, at the airport, although the service provided is required by the Air Carrier Access Act of 1986 (ACAA) regulations. According to stakeholders, while no solution meets all needs, a number of practices can help reduce or eliminate some of these barriers to equal access at airports. For example, some selected airports use external disability community and passenger groups to proactively engage in identifying barriers and develop solutions. Other airports have implemented technology-based solutions, such as mobile phone applications to make airport navigation easier. Examples of Stakeholder-Identified Features to Assist Airport Passengers with Disabilities The Office of Aviation Consumer Protection within the Department of Transportation (DOT) is responsible for oversight of airlines' compliance with the ACAA. In 2008, DOT updated its entire ACAA regulation, including adding new training requirements for airline personnel, such as requiring training to be recurrent. Following this update, DOT conducted outreach to domestic and foreign airlines on the changes and reviewed airlines' disability training sessions and materials. Agency officials said that in recent years, DOT has conducted reviews of airlines' training only when passengers' complaints indicate a possible problem, as officials' analyses have not shown training generally to be a significant cause of service violations. DOT officials and stakeholders said other factors, such as limited availability of staff to assist passengers with disabilities, at times may affect the service passengers with disabilities receive. DOT is assessing some of these factors through the statutorily mandated ACAA Advisory Committee, formed in late 2019 to make recommendations to improve accessibility to air travel. The committee met in 2020, established three subcommittees, and plans to reconvene by summer 2021. Why GAO Did This Study Approximately 43 million people in the United States have some type of disability, which may affect mobility, vision, hearing, and cognition. Without accessible airport facilities and accommodations—such as appropriate assistance from the check-in counter to the gate, or effective communication of flight information—air travel for people with disabilities can be extremely challenging. The FAA Reauthorization Act of 2018 includes provisions for GAO to review leading airport accessibility practices for passengers with disabilities, as well as required training for airline and contract service personnel who assist these passengers within the airport. This report examines, among other objectives: stakeholder-identified barriers that passengers with disabilities face when accessing airport facilities, accessibility practices to assist passengers with disabilities, as well as how DOT has overseen airlines' disability-related training. GAO reviewed relevant federal laws, regulations, DOT documents, literature, as well as information describing disability training provided by selected airlines and contractors. GAO interviewed a non-generalizable sample of stakeholders, including those at 16 U.S. airports selected based on size and geography, eight large and low-cost domestic airlines selected based on the greatest number of disability-related passenger complaints and enplanements, and six aviation service contractors working for those airlines. GAO also conducted interviews with DOT officials and 10 disability advocacy organizations, among others. For more information, contact Heather Krause at (202) 512-2834 or krauseh@gao.gov.
    [Read More…]
  • DAG Monaco Delivers Remarks at Press Conference on Darkside Attack on Colonial Pipeline
    In Crime News
    Today, the Department of Justice is announcing a significant development in the ransomware attack on the Colonial Pipeline.
    [Read More…]
  • Tax Cuts and Jobs Act: Future Rulemaking Should Provide Greater Detail on Paperwork Burden and Economic Effects of International Business Provisions
    In U.S GAO News
    What GAO Found GAO's interviews with officials representing eight selected U.S.-based companies revealed considerable uncertainty in how the international business provisions of Public Law 115-97—commonly known as the Tax Cuts and Jobs Act of 2017 (TCJA)—may be affecting business planning decisions. Some companies reported making specific changes, such as moving intellectual property back to the U.S. in response to a new deduction for income earned from certain foreign-derived sales of property or services attributed to assets located in the U.S. Preliminary studies on another provision taxing net income earned by foreign subsidiaries exceeding a specified threshold of certain assets hypothesized that this provision could encourage moving tangible property outside the U.S. Other business representatives emphasized the importance of nontax factors in business planning decisions, such as entering foreign markets where executives believe potential customers may be located. The Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) proposed eight regulations and finalized six of them to implement four international provisions of TCJA between December 2017 and October 2020 (the most current information available at the time of GAO's review) and used guidance to supplement the regulations. The agency generally complied with legal requirements for issuing regulations and offered public comment opportunities for some guidance. However, Treasury and IRS did not fully address expectations set in government-wide guidance related to Paperwork Reduction Act (PRA) burden estimates, economic analysis requirements for regulations, and public comment on significant guidance: IRS generally did not provide specific estimates of the incremental paperwork burden of TCJA's international regulations and instead estimated the total burden for all business tax forms. The Office of Information and Regulatory Affairs' PRA guide says agencies should estimate the time and money required for an information collection. GAO's interviews with representatives of selected companies show why it is important for IRS to consider burden because representatives reported challenges, such as gathering required information from foreign subsidiaries. Anticipated economic benefits and costs of Treasury's and IRS's regulations were generally not quantified. An executive order requires agencies to provide such information to the extent feasible for regulations with the largest anticipated economic effects. As a result, Treasury and IRS made important decisions about regulations, such as whether to allow foreign military sales to be eligible for a U.S. deduction, without more specific information about the potential economic effects. IRS did not provide an opportunity for public comment before issuing revenue procedures related to TCJA's international provisions. The Office of Management and Budget identified ensuring public comment opportunities for significant guidance when appropriate as a leading practice that agencies should follow. The President recently directed a government-wide review of agency guidance processes. Why GAO Did This Study TCJA made sweeping changes to taxing U.S. corporations' international activities: (1) a transition tax on untaxed overseas earnings of foreign subsidiaries that accrued prior to 2017; (2) a tax on the net income earned by foreign subsidiaries exceeding a specified threshold of certain assets; (3) a deduction for income from certain foreign-derived sales of property or services exceeding a specified threshold of certain assets; and (4) a tax on certain payments made to a related foreign party referred to as base erosion payments. GAO was asked to review IRS's implementation of TCJA and early effects of the law. This report: (1) describes how TCJA's international provisions may be affecting U.S.-based corporations' international business activities; and (2) assesses IRS's and Treasury's development of relevant regulations and guidance to implement the provisions. GAO interviewed representatives from eight companies' tax departments randomly selected from among the 100 largest U.S.-based companies and compared relevant regulations and guidance against procedural requirements.
    [Read More…]
  • Charleston County School District Agrees to Provide Language Access for Limited English Proficient Parents
    In Crime News
    Today the Justice Department announced a settlement agreement with the Charleston County School District to resolve its investigation into complaints that the school district failed to communicate essential information to thousands of Spanish-speaking, limited English proficient (LEP) parents, denying their children full and equal access to the district’s education programs and services. The Civil Rights Division and the U.S. Attorney’s Office for the District of South Carolina conducted the investigation under Title VI of the Civil Rights Act of 1964 and the Equal Educational Opportunities Act of 1974.
    [Read More…]
  • Finland Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Florida Man Sentenced to Three Years in Prison for Obstructing the IRS
    In Crime News
    A Florida man was sentenced to 36 months in prison today for corruptly obstructing the due administration of the internal revenue laws, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Maria Chapa Lopez for the Middle District of Florida.
    [Read More…]
  • U.S. Special Envoy Lenderking Returns from Travel to Saudi Arabia, Oman, and Jordan
    In Crime Control and Security News
    Office of the [Read More…]
  • Opening Remarks at the Indo-Pacific Conference on Strengthening Transboundary River Governance
    In Climate - Environment - Conservation
    Ambassador Atul Keshap, [Read More…]
  • Justice Department Settles with Maine School District to Protect Educational Rights of Students with Disabilities and English Learners
    In Crime News
    Today the Justice Department announced a settlement agreement with the Lewiston Public Schools to end the district’s systemic and discriminatory practice of excluding students from full-day school because of behavior related to their disabilities. The settlement also will require the district to provide equal educational opportunities to its English learner students.  The department conducted its investigation under Title II of the Americans with Disabilities Act (ADA) and the Equal Educational Opportunities Act of 1974 (EEOA) after receiving a complaint from Disability Rights Maine.
    [Read More…]
  • Physician Pleads Guilty in Medicaid Fraud Conspiracy
    In Crime News
    A California man pleaded guilty today to conspiracy to commit health care fraud.
    [Read More…]
  • Financial Audit: Office of Financial Stability’s (Troubled Asset Relief Program) FY 2020 and FY 2019 Financial Statements
    In U.S GAO News
    GAO found (1) the Office of Financial Stability's (OFS) financial statements for the Troubled Asset Relief Program (TARP) as of and for the fiscal years ended September 30, 2020, and 2019, are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles; (2) OFS maintained, in all material respects, effective internal control over financial reporting for TARP as of September 30, 2020; and (3) no reportable noncompliance for fiscal year 2020 with provisions of applicable laws, regulations, contracts, and grant agreements GAO tested. In commenting on a draft of this report, OFS stated that it is proud to receive an unmodified opinion on its financial statements and its internal control over financial reporting. OFS also stated that it is committed to maintaining the high standards and transparency reflected in these audit results. The Emergency Economic Stabilization Act of 2008 (EESA) that authorized TARP on October 3, 2008, includes a provision for TARP, which is implemented by OFS, to annually prepare and submit to Congress and the public audited fiscal year financial statements that are prepared in accordance with U.S. generally accepted accounting principles. EESA further states that GAO shall audit TARP's financial statements annually. For more information, contact Cheryl E. Clark at (202) 512-3406 or clarkce@gao.gov.
    [Read More…]
  • Secretary Antony J. Blinken at Sembremos Seguridad Site Visit
    In Crime Control and Security News
    Antony J. Blinken, [Read More…]
  • Acting Deputy Assistant Attorney General Robert A. Zink Delivers Remarks at Virtual GIR Live Interactive: Regional Spotlight-North America
    In Crime News
    It’s wonderful to speak with you here this morning. And I’m sorry we can’t do this in person. But I’m still delighted to have the opportunity to be here to say a few words about white-collar criminal enforcement, albeit virtually.
    [Read More…]
  • Where Are Stars Made? NASA’s Spitzer Spies a Hot Spot
    In Space
    The most massive stars [Read More…]
  • Justice Department Publishes Statement on 2016 President’s Council of Advisors on Science and Technology Report
    In Crime News
    Today, the Justice Department published a statement on the 2016 President’s Council of Advisors on Science and Technology (PCAST) Report, Forensic Science in Criminal Courts: Ensuring Scientific Validity of Feature-Comparison Methods.  The statement is a response to PCAST’s claims regarding what it described as forensic “feature comparison methods.”
    [Read More…]
  • Boeing Charged with 737 Max Fraud Conspiracy and Agrees to Pay over $2.5 Billion
    In Crime News
    The Boeing Company (Boeing) has entered into an agreement with the Department of Justice to resolve a criminal charge related to a conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group (FAA AEG) in connection with the FAA AEG’s evaluation of Boeing’s 737 MAX airplane.
    [Read More…]
  • Former Correctional Officer Pleads Guilty to Role in Bribery and Drug Smuggling Conspiracy
    In Crime News
    A North Carolina man pleaded guilty today to smuggling drugs and other contraband into Caledonia Correctional Institution in exchange for bribe payments.
    [Read More…]
  • Former Georgia Supervisory Correctional Officer Pleads Guilty to Civil Rights Offenses for Assaulting Inmates
    In Crime News
    A former supervisory correctional officer at the Valdosta State Prison (VSP) in Valdosta, Georgia, pleaded guilty today to violating the civil rights of two inmates during two separate incidents.
    [Read More…]
  • Remarks as Delivered by Attorney General William P. Barr at the Major Cities Chiefs Association Conference
    In Crime News
    I appreciate the invitation to address this group.  I want to start by thanking you, and the men and women you lead, for serving in what I think is the most noble profession in our country – enforcing the law and keeping our communities safe. 
    [Read More…]
  • Justice Department Settles with a Car Rental Services Company to Resolve Immigration-Related Discrimination
    In Crime News
    The Justice Department announced today that it signed a settlement agreement with Fleetlogix Inc. (Fleetlogix) resolving claims that the company discriminated against work-authorized non-U.S. citizens by requiring them to provide specific and unnecessary work authorization documentation because of their citizenship or immigration status. Fleetlogix, based in San Diego, California, operates offices nationwide that provide cleaning and transportation services to rental car companies.
    [Read More…]
  • Alabama Salesman Sentenced to Prison for Tax Evasion
    In Crime News
    A Hoover, Alabama, salesman was sentenced to 24 months in prison yesterday for tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Prim F. Escalona for the Northern District of Alabama.
    [Read More…]
  • Justice Department Files Lawsuit Against Village of Airmont, New York, for Zoning Restrictions that Target the Orthodox Jewish Community
    In Crime News
    The Justice Department today announced that it filed a lawsuit against the Village of Airmont, New York, alleging that it violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) by targeting the Orthodox Jewish community through zoning ordinances restricting religious schools and home synagogues, and by enforcing its zoning code in a discriminatory manner to prevent Orthodox Jews from using their property consistent with their faith. 
    [Read More…]
  • Montenegro Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Today Is the Last Day to Vote for NASA’s 12 Webby Award Nominations
    In Space
    You can cast your [Read More…]
  • U.S. Special Presidential Envoy for Climate John Kerry to Mark Official U.S. Reentry into Paris Agreement
    In Crime Control and Security News
    Office of the [Read More…]
  • Military Vehicles: Army and Marine Corps Should Take Additional Actions to Mitigate and Prevent Training Accidents
    In U.S GAO News
    What GAO Found The number of serious accidents involving Army and Marine Corps tactical vehicles, such as tanks and trucks, and the number of resulting deaths, fluctuated from fiscal years 2010 through 2019 (see figure). Driver inattentiveness, lapses in supervision, and lack of training were among the most common causes of these accidents, according to GAO analysis of Army and Marine Corps data. Number of Army and Marine Corps Class A and B Tactical Vehicle Accidents and Resulting Military Deaths, Fiscal Years 2010 through 2019 Note: Class A and B accidents have the most serious injuries and financial costs. The Army and Marine Corps established practices to mitigate and prevent tactical vehicle accidents, but units did not consistently implement these practices. GAO found that issues affecting vehicle commanders and unit safety officers hindered Army and Marine Corps efforts to implement risk management practices. For example, the Army and Marine Corps had not clearly defined the roles or put procedures and mechanisms in place for first-line supervisors, such as vehicle commanders, to effectively perform their role. As a result, implementation of risk management practices, such as following speed limits and using seat belts, was ad hoc among units. The Army and Marine Corps provide training for drivers of tactical vehicles that can include formal instruction, unit licensing, and follow-on training, but their respective programs to build driver skills and experience had gaps. GAO found that factors, such as vehicle type and unit priorities, affected the amount of training that vehicle drivers received. Further, licensing classes were often condensed into shorter periods of time than planned with limited drive time, and unit training focused on other priorities rather than driving, according to the units that GAO interviewed. The Army and Marine Corps have taken steps to improve their driver training programs, but have not developed a well-defined process with performance criteria and measurable standards to train their tactical vehicle drivers from basic qualifications to proficiency in diverse driving conditions, such as driving at night or over varied terrain. Developing performance criteria and measurable standards for training would better assure that Army and Marine Corps drivers have the skills to operate tactical vehicles safely and effectively. Why GAO Did This Study Tactical vehicles are used to train military personnel and to achieve a variety of missions. Both the Army and Marine Corps have experienced tactical vehicle accidents that resulted in deaths of military personnel during non-combat scenarios. GAO was asked to review issues related to the Army's and Marine Corps' use of tactical vehicles. Among other things, this report examines (1) trends from fiscal years 2010 through 2019 in reported Army and Marine Corps tactical vehicle accidents, deaths, and reported causes; and evaluates the extent to which the Army and Marine Corps have (2) taken steps to mitigate and prevent accidents during tactical vehicle operations; and (3) provided personnel with training to build the skills and experience needed to drive tactical vehicles. GAO analyzed accident data from fiscal years 2010 through 2019 (the most recent full year of data at the time of analysis); reviewed documents; and interviewed officials from a non-generalizable sample of units and training ranges selected based on factors, such as locations where accidents occurred.
    [Read More…]
  • U.S. Government Accountability Office (U.S. GAO)
    In U.S GAO News
    What GAO Found The Navy has identified several challenges with using its regular maintenance capability (which restores ships to fully operational status) to provide battle damage repairs during a great power conflict. Challenges include—the lack of established doctrine for battle damage repair, unclear command and control roles, and a shortage of repair capacity. The Navy Process for Repairing Ships Damaged in Battle The Navy is in the early stages of determining how it will provide battle damage repair during a great power conflict. Eight organizations are responsible for the Navy's 15 battle damage repair planning efforts, however the Navy has not designated an organization to lead and oversee these efforts. Without designated leadership, the Navy may be hindered in its efforts to address the many challenges it faces in sustaining its ships during a great power conflict. The Navy develops ship vulnerability models during a ship's acquisition to estimate damage during a conflict. These models are also used to inform war games that refine operational approaches and train leaders on decision-making. However, the Navy does not update these models over a ship's decades-long service life to reflect changes to key systems that could affect model accuracy. As a result, it lacks quality data on ship mission-critical failure points to inform its analysis of battle damage repair needs. Without periodically assessing and updating its models to accurately reflect the ship's mission-critical systems, the Navy has limited its ability to assess and develop battle damage repair capabilities necessary to sustain ships in a conflict with a great power competitor. Why GAO Did This Study The ability to repair and maintain ships plays a critical role in sustaining Navy readiness. After the Cold War, the Navy divested many wartime ship repair capabilities. With the rise of great power competitors capable of producing high-end threats in warfare, the Navy must now be prepared to quickly salvage and repair damage to a modern fleet. House Report 116-120, accompanying a bill for the National Defense Authorization Act for Fiscal Year 2020, included a provision for GAO to assess the Navy's efforts to identify and mitigate challenges in repairing battle-damaged ships during a great power conflict. GAO's report (1) discusses the challenges the Navy has identified in using its regular maintenance capability for battle damage repair, and (2) evaluates the extent to which the Navy has begun developing the battle damage repair capability it requires to prevail in a great power conflict. GAO reviewed relevant guidance and assessed reports on naval war games and other documentation to identify challenges that may impede the planning and repair of battle-damaged ships and efforts to improve the repair capability for a great power conflict.
    [Read More…]
  • Justice Department Settles with Amtrak to Resolve Disability Discrimination Across its Intercity Rail System
    In Crime News
    The Justice Department today announced that it reached an agreement with Amtrak, the National Railroad Passenger Corporation, to resolve the department’s findings of disability discrimination in violation of the Americans with Disabilities Act (ADA). Under the agreement Amtrak will fix inaccessible stations and pay $2.25 million to victims hurt by its inaccessible stations.
    [Read More…]
  • Al Qaeda-Trained Jihadist Who Recruited Other Inmates to Join ISIS Sentenced to 300 Months
    In Crime News
    A 46-year-old international terrorist convicted of additional terrorist activity that he committed while an inmate of the U.S. Bureau of Prisons has been sentenced in the Eastern District of Texas, announced the Department of Justice.
    [Read More…]
  • Assistant Attorney General Beth A. Williams Announces Departure from the Office of Legal Policy
    In Crime News
    Assistant Attorney General Beth A. Williams of the Justice Department’s Office of Legal Policy (OLP) announced her departure from the department, effective today.
    [Read More…]
  • Inaugural U.S.-Taiwan Economic Prosperity Partnership Dialogue
    In Crime Control and Security News
    Office of the [Read More…]
  • Defenders Navigate Uncharted Territory During Pandemic
    In U.S Courts
    Working on the front lines of justice amid the pandemic, federal defenders are navigating uncharted territory as they work to maintain virtual access to clients in detention facilities and participate in socially distanced trials and hearings.
    [Read More…]
  • Deputy Assistant Attorney General for the National Security Division Adam Hickey Delivers Remarks at the ACI 2nd National Forum on FARA
    In Crime News
    Over the last few years, a conventional wisdom has developed about the arc of FARA enforcement.  It goes a little something like this: In the beginning, Congress created FARA. Then DOJ rested.  For nearly 80 years, it was not enforced, carried no penalties, and was largely ignored.  Beginning in 2017, the Special Counsel’s Office used the statute to investigate and charge Russian Internet trolls and politically influential Americans alike.  Suddenly, this vague statute transformed from an administrative afterthought into an unpredictable source of criminal liability.  FARA registrations skyrocketed, and conferences of white collar defense attorneys organized soon thereafter. 
    [Read More…]
  • Deputy Secretary Biegun’s Call with Japanese Vice Foreign Minister Akiba
    In Crime Control and Security News
    Office of the [Read More…]
  • Commercial Shipping: Information on How Intermodal Chassis Are Made Available and the Federal Government’s Oversight Role
    In U.S GAO News
    What GAO Found Containerized shipping—performed by oceangoing vessels using standardized shipping containers—accounted for approximately 60 percent of all world seaborne trade, which was valued at approximately $12 trillion in 2017. At a port, shipping containers are placed on "intermodal chassis" (chassis), standardized trailers that carry shipping containers and attach to tractors for land transport. Multiple entities are involved in the movement of shipping containers, including intermodal equipment providers (IEP) (which own and provide chassis for a fee); ocean carriers (which transport cargo over water); and motor carriers (which transport shipping containers over land via chassis). Four distinct models are used in the U.S. to make chassis available to motor carriers (see table), each with benefits and drawbacks according to the entities GAO interviewed. While chassis are generally provided to motor carriers using one of these four models, more than one model may be available at a port. Chassis Provisioning Models Model 1: Single chassis provider An individual intermodal equipment provider (IEP) owns chassis that are directly provided to shippers or motor carriers. Model 2: Motor carrier-controlled A motor carrier owns or is responsible for a chassis that it has procured under a long-term lease. Model 3: Gray pool A single manager, often a third party, oversees the operations of a pool that is made up of chassis contributed by multiple IEPs. Model 4: Pool-of-pools Each IEP manages its respective chassis fleet, but each allow motor carriers to use any chassis among the fleets and to pick up and drop off chassis at any of the IEPs’ multiple locations. Source: GAO.  |  GAO-21-315R Entities GAO interviewed identified multiple benefits and drawbacks to each of the chassis provisioning models. Regarding benefits, for example, both the single chassis provider model and the motor carrier-controlled model allow IEPs and motor carriers to have direct control over the maintenance and repair of their chassis, something these entities potentially lose under other chassis provisioning models. Further, the gray pool and the pool-of-pools models can resolve many of the logistical concerns regarding the availability of chassis, leading to operational efficiencies for port operators and the ability of motor carriers to choose whatever chassis they wish. Regarding drawbacks, cost considerations were identified in some cases. For example, under the single chassis provider model, two IEPs told us that while an expected part of the business, repositioning chassis to ensure there is a sufficient supply of chassis where they are needed can be costly to the IEPs. The federal government provides oversight of chassis safety but has a limited economic oversight role regarding chassis. The Federal Motor Carrier Safety Administration (FMCSA) employs several inspection methods to help oversee chassis safety and compliance with regulations. For example, inspectors perform roadside inspections on commercial vehicles, including chassis, in operation. FMCSA also performs investigations of individual IEPs to oversee chassis safety. While one stakeholder GAO spoke with stated that FMCSA should consider maintaining safety ratings for IEPs—as is currently done for motor carriers—FMCSA officials told us that the current processes provide sufficient information to select IEPs for investigation. The Federal Maritime Commission (FMC) oversees ocean carriers that provide service to and from the U.S. and works to ensure a competitive and reliable ocean transportation supply system. Entities may file complaints with FMC to allege violations of the Shipping Act of 1984, as amended. One such complaint was filed in August 2020, in which the complainants allege, among other things, that although ocean carriers do not own chassis, they still control the operation of chassis pools at ports. An initial decision on this complaint is expected in August 2021. None of the entities GAO spoke with identified additional actions they would like for FMC to take regarding chassis. Why GAO Did This Study Senate Report 116-109—incorporated by reference into the explanatory statement accompanying the Further Consolidated Appropriations Act, 2020—contained a provision for GAO to study intermodal chassis. Within the U.S., some entities have expressed concerns about chassis, including limited availability of chassis in some circumstances, as well as the age and safety of chassis. This report describes selected stakeholders' views on: (1) the ways in which chassis are made available for the movement of shipping containers and the benefits and drawbacks of those models, and (2) the federal government's role in the chassis market. To address these objectives, GAO reviewed relevant reports on chassis provisioning and federal oversight. GAO interviewed representatives from FMC, FMCSA, five industry associations, and the three largest intermodal equipment providers. GAO also interviewed three ocean carriers, five port operators, and a motor carrier selected, in part, for their large number of container movements. The information obtained from these interviews provides a broad perspective of relevant issues but is not generalizable to all entities. For more information, contact Andrew Von Ah at (202) 512-2834 or vonaha@gao.gov.
    [Read More…]
  • Secretary Antony J. Blinken to U.S. Mission Mexico
    In Crime Control and Security News
    Antony J. Blinken, [Read More…]
  • Special Briefing with Deputy Secretary of State for Management and Resources Brian P. McKeon, U.S. Agency for International Development (USAID) Principal Advisor to the Administrator Mark Feierstein, and Experts On the Administration’s Budget Proposal for the Department of State and USAID for Fiscal Year 2022
    In Crime Control and Security News
    Brian P. McKeon, Deputy [Read More…]
  • Federal Judges Reinventing the Jury Trial During Pandemic
    In U.S Courts
    A group of federal judges around the country are reinventing the jury trial so that it is not only a fair forum for the administration of justice, but also a safe experience for everyone in the courtroom, including defendants and jurors.
    [Read More…]
  • Mortality in State and Federal Prisons, 2001-2018 – Statistical Tables
    In Justice News
    (Publication)
    This report presents detailed statistical tables on mortality in state and federal prisons. It provides information on cause of death; decedent characteristics, and mortality rates of inmate populations.
    4/29/2021, NCJ 255970, E. Ann Carson [Read More…]
  • United States Joins Christchurch Call to Action to Eliminate Terrorist and Violent Extremist Content Online
    In Crime Control and Security News
    Ned Price, Department [Read More…]
  • Vanuatu Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Disaster Block Grants: Factors to Consider in Authorizing a Permanent Program
    In U.S GAO News
    What GAO Found In March 2019, GAO reported that because the Community Development Block Grant Disaster Recovery (CDBG-DR) program lacks permanent authority and regulations—unlike other disaster assistance programs—appropriations require the Department of Housing and Urban Development (HUD) to customize grant requirements for each disaster in Federal Register notices—a time-consuming process. GAO identified challenges associated with the lack of permanent statutory authority, including delays in disbursal of funds and the need for grantees to manage multiple grants with different rules. For example, GAO found it took HUD 5 months after the first appropriation for the 2017 hurricanes (Hurricanes Harvey, Irma, and Maria) for HUD to issue the first Federal Register notice establishing the grant requirements. Officials from one of the 2017 CDBG-DR grantees told GAO of challenges managing multiple CDBG-DR grants it received over the years because each grant had different rules. HUD officials noted then that permanently authorizing CDBG-DR would allow HUD to issue permanent regulations for disaster recovery. GAO identified factors to consider when weighing whether and how to permanently authorize a program for unmet disaster assistance needs. These factors, which are based on GAO's body of work on emergency management and past observations of broader government initiatives, include the following: Clarify how the program would fit into the broader federal disaster framework. GAO has emphasized the importance of articulating a program's relationship to other programs and of aligning the program within organizations with compatible missions and goals. This is particularly important with disaster programs, given the approximately 30 agencies involved in disaster recovery. Clarify the purpose and design the program to address it. Greater clarity about the purpose of CDBG-DR could help resolve implementation issues GAO has previously identified, such as how much time grantees should have to spend funds and the proportion of funds that should be distributed to renters. Consider the necessary capacity and support infrastructure to implement the program. GAO's prior work found that state, local, territorial, and tribal grantees and federal agencies faced capacity challenges in administering and overseeing federal grant funds, including CDBG-DR. Capacity challenges for grantees may contribute to fraud risks and slow expenditure of funds. Why GAO Did This Study Legislation proposed over the years would permanently authorize CDBG-DR or a similar program, but no proposal has been enacted. Since 1993, Congress has provided over $90 billion in supplemental appropriations through HUD's CDBG program to help communities recover from disasters. Just since 2001, HUD has issued over 100 Federal Register notices linked to these funds. Communities use these funds to address unmet needs for housing, infrastructure, and economic revitalization. HUD is one of approximately 30 federal agencies tasked with disaster recovery. This testimony discusses (1) challenges associated with the lack of permanent statutory authority for CDBG-DR and (2) factors to consider when weighing whether and how to permanently authorize CDBG-DR or a similar program. It is based primarily on GAO's March 2019 and May 2021 reports on CDBG-DR (GAO-19-232 and GAO-21-177) and GAO reports issued between February 2004 and June 2019 that identified factors to consider in making critical federal policy decisions. For those reports, GAO reviewed documentation on CDBG-DR and its observations of efforts to reorganize or streamline government, among other things.
    [Read More…]
  • Arkansas Project Manager Pleads Guilty to Bank Fraud and False Statements in Connection with COVID-Relief Fraud
    In Crime News
    A project manager employed by a major retailer has pleaded guilty to bank fraud charges for filing fraudulent bank loan applications seeking more than $8 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
    [Read More…]
  • Ex-law enforcement officer sent to prison for transporting purported drug money
    In Justice News
    A former deputy [Read More…]
  • Close Air Support: Actions Needed to Enhance Friendly Force Tracking Capabilities and Fully Evaluate Training
    In U.S GAO News
    The Department of Defense (DOD) has made progress implementing initiatives to enhance capabilities that are used to identify friendly force locations during close air support (CAS) missions, but GAO identified additional actions that are needed to strengthen these efforts. Specifically, DOD has made limited progress in implementing 10 changes the department approved to address gaps in the interoperability of digital communications systems used to conduct CAS, hindering efforts to improve the speed and accuracy of information exchanges. DOD's efforts to assess the interoperability of digital systems used to perform CAS have been limited in scope. GAO found that DOD had formally assessed two out of 10 approved changes during joint service and multinational events, and these assessments were not conducted in a training environment that replicated capabilities of near-peer adversaries. DOD implemented a new capability in the U.S. Central Command area of responsibility to help identify the positions of friendly forces during CAS missions. However, GAO found that DOD did not provide adequate training for personnel who operate it or conduct an evaluation to resolve implementation challenges that have hampered its performance. DOD conducts evaluations of training programs for forces that participate in CAS missions, but GAO identified two areas where DOD can improve its efforts. First, the Army and Marine Corps have not systematically evaluated the effectiveness of periodic training for ground observers providing targeting information due to a lack of centralized systems for tracking training data and the absence of designated entities to monitor service-wide training. Second, the use of contract aircraft for training increased substantially between 2017 and 2019, but DOD has not fully evaluated the use of non-military contract aircraft to train air controllers for CAS (see fig.). GAO found that differences between U.S. military aircraft and contract aircraft (e.g., airspeed) can result in a misalignment of aircraft capabilities for certain types of training events. Without evaluating CAS training fully, DOD cannot have assurance that its forces are prepared to conduct CAS missions safely and effectively. Number of Hours Non-Military Aircraft Were Used to Train for Close Air Support for Fiscal Years 2017 through 2019 The use of ordnance delivered by aircraft to support U.S. military forces that are in close proximity to enemy forces on the ground requires detailed planning, seamless communications, and effective training. Mistakes in communications or procedures used to identify and maintain an awareness of the positions of friendly forces on the battlefield during CAS can result in the loss of U.S. military personnel. Senate Report 116-48 and House Report 116-120, accompanying bills for the National Defense Authorization Act for Fiscal Year 2020, included provisions for GAO to evaluate issues related to friendly-force identification capabilities in CAS missions. Among other things, this report evaluates the extent to which DOD has (1) implemented initiatives to enhance friendly-force identification capabilities during CAS, and (2) evaluated training for forces that participate in CAS. GAO analyzed documentation and interviewed officials regarding DOD efforts to develop and implement friendly force tracking capabilities for CAS; reviewed CAS training programs; and analyzed training data, including the number of hours that DOD used non-military contract aircraft for CAS training from 2017 through 2019. GAO is making 11 recommendations to DOD, including that DOD implement and assess initiatives to improve the interoperability of digital systems used in CAS and take additional steps to evaluate the training for certain forces that participate in CAS missions. DOD concurred with the recommendations. For more information, contact Cary Russell at (202) 512-5431 or RussellC@gao.gov.
    [Read More…]
  • CBP Mobile Passport Control (MPC) Mobile Application Privacy Policy
    In Travel
    Thank you for [Read More…]
  • Nine Individuals Charged in Superseding Indictment with Conspiring to Act as Illegal Agents of the People’s Republic of China
    In Crime News
    A federal grand jury in New York filed an indictment today charging nine defendants with acting and conspiring to act in the United States as illegal agents of the People’s Republic of China (PRC) without prior notification to the Attorney General, and engaging and conspiring to engage in interstate and international stalking.
    [Read More…]
  • Facial Recognition Technology: Federal Law Enforcement Agencies Should Better Assess Privacy and Other Risks
    In U.S GAO News
    What GAO Found GAO surveyed 42 federal agencies that employ law enforcement officers about their use of facial recognition technology. Twenty reported owning systems with facial recognition technology or using systems owned by other entities, such as other federal, state, local, and non-government entities (see figure). Ownership and Use of Facial Recognition Technology Reported by Federal Agencies that Employ Law Enforcement Officers Note: For more details, see figure 2 in GAO-21-518. Agencies reported using the technology to support several activities (e.g., criminal investigations) and in response to COVID-19 (e.g., verify an individual's identity remotely). Six agencies reported using the technology on images of the unrest, riots, or protests following the death of George Floyd in May 2020. Three agencies reported using it on images of the events at the U.S. Capitol on January 6, 2021. Agencies said the searches used images of suspected criminal activity. All fourteen agencies that reported using the technology to support criminal investigations also reported using systems owned by non-federal entities. However, only one has awareness of what non-federal systems are used by employees. By having a mechanism to track what non-federal systems are used by employees and assessing related risks (e.g., privacy and accuracy-related risks), agencies can better mitigate risks to themselves and the public. Why GAO Did This Study Federal agencies that employ law enforcement officers can use facial recognition technology to assist criminal investigations, among other activities. For example, the technology can help identify an unknown individual in a photo or video surveillance. GAO was asked to review federal law enforcement use of facial recognition technology. This report examines the 1) ownership and use of facial recognition technology by federal agencies that employ law enforcement officers, 2) types of activities these agencies use the technology to support, and 3) the extent that these agencies track employee use of facial recognition technology owned by non-federal entities. GAO administered a survey questionnaire to 42 federal agencies that employ law enforcement officers regarding their use of the technology. GAO also reviewed documents (e.g., system descriptions) and interviewed officials from selected agencies (e.g., agencies that owned facial recognition technology). This is a public version of a sensitive report that GAO issued in April 2021. Information that agencies deemed sensitive has been omitted.
    [Read More…]
  • Launch of United Women’s Economic Development Network
    In Crime Control and Security News
    Office of the [Read More…]
  • Ecuador Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Switzerland’s Largest Insurance Company and Three Subsidiaries Admit to Conspiring with U.S. Taxpayers to Hide Assets and Income in Offshore Accounts
    In Crime News
    The Department of Justice today filed a criminal information charging Swiss Life Holding AG (Swiss Life Holding), Swiss Life (Liechtenstein) AG (Swiss Life Liechtenstein), Swiss Life (Singapore) Pte. Ltd. (Swiss Life Singapore), and Swiss Life (Luxembourg) S.A. (Swiss Life Luxembourg), collectively, the “Swiss Life Entities,” with conspiring with U.S. taxpayers and others to conceal from the IRS more than $1.452 billion in offshore insurance policies, including more than 1,600 insurance wrapper policies, and related policy investment accounts in banks around the world and the income generated in these accounts.
    [Read More…]
  • Man Pleads Guilty to Obstruction of an Official Proceeding for Breaching U.S. Capitol on Jan. 6
    In Crime News
    A Florida man pleaded guilty today to crimes related to the breach of the U.S. Capitol on Jan. 6 which disrupted a joint session of the U.S. Congress in the process of ascertaining and counting the electoral votes related to the presidential election.
    [Read More…]
  • Hospital Researcher Sentenced to Prison for Conspiring to Steal Trade Secrets, Sell Them in China
    In Crime News
    A former Dublin, Ohio, woman was sentenced in U.S. District Court today to 30 months in prison for conspiring to steal exosome-related trade secrets concerning the research, identification and treatment of a range of pediatric medical conditions. Li Chen, 47, also conspired to commit wire fraud. Chen admitted in her guilty plea in July 2020 to stealing scientific trade secrets related to exosomes and exosome isolation from Nationwide Children’s Hospital’s Research Institute for her own personal financial gain.
    [Read More…]
  • Spare Parts Contracts: Collecting Additional Information Could Help DOD Address Delays in Obtaining Cost or Pricing Data
    In U.S GAO News
    What GAO Found When the Department of Defense (DOD) awards contracts without competition, contracting officers may rely on cost or pricing data that contractors certify as accurate, current, and complete to determine if the prices are reasonable. DOD uses data other than certified cost or pricing data when certified cost or pricing data are not required. GAO found that, during fiscal years 2015 to 2019, the Defense Logistics Agency (DLA) obtained data other than certified data for 77 of the 136 sole-source spare parts contracts it awarded. As the 77 contracts were for commercial items, statute prohibits contracting officers from requiring certified cost or pricing data. DLA also waived the requirement to obtain certified cost or pricing data in two cases, citing the exceptional need for the spare parts. DLA obtained certified cost or pricing data for the remaining sole-source contracts. In March 2019, DOD issued a memorandum requiring defense agencies to report when contractors outright refuse to provide cost or pricing data, but it is not collecting data on the extent that delays in obtaining data affect the time that it takes to award contracts. DLA, Air Force, and Navy contracting officers said that while they were able to determine if prices were reasonable, delays in obtaining contractors' cost or pricing data contributed to the length of time needed to award seven of the 10 sole-source spare parts contracts GAO reviewed (see figure). Length of Time to Award 10 Sole-Source Contracts in Fiscal Year 2019 That GAO Reviewed DOD's March 2019 memorandum highlighted the need to understand, DOD-wide, the extent that contractors do not comply with contracting officer requests for data other than certified cost or pricing data. However, the focus was on outright refusals and not delays. Without a means to monitor or identify the nature and extent of delays, DOD is missing opportunities to develop approaches to effectively address these issues and potentially award contracts faster. Why GAO Did This Study DOD spends billions of dollars each year on spare parts for planes, ships, and other equipment. While DLA buys the bulk of the spare parts, the military departments also acquire them to support specific weapon systems. DOD seeks to negotiate a reasonable price for these spare parts to award contracts in a timely manner. DOD uses data other than certified cost or pricing data if it determines certified cost or pricing data are not required to determine prices are reasonable. The National Defense Authorization Act for Fiscal Year 2020 included a provision for GAO to review DOD's efforts to obtain contractor cost or pricing data. This report 1) describes how often DLA obtained cost or pricing data on sole-source contracts for spare parts; and 2) assesses the extent to which DOD tracks delays in obtaining these data and the reasons for those delays. GAO reviewed federal and DOD acquisition regulations and analyzed data for 136 DLA spare parts contracts awarded between fiscal years 2015 to 2019. For fiscal year 2019, GAO also selected 10 sole-source contracts awarded by DLA, Air Force, and the Navy, based on dollar value and other factors, to identify challenges in obtaining cost or pricing data. GAO also interviewed DOD and contractor officials.
    [Read More…]
  • Electricity Grid Cybersecurity: DOE Needs to Ensure Its Plans Fully Address Risks to Distribution Systems
    In U.S GAO News
    What GAO Found The U.S. grid's distribution systems—which carry electricity from transmission systems to consumers and are regulated primarily by states—are increasingly at risk from cyberattacks. Distribution systems are growing more vulnerable, in part because their industrial control systems increasingly allow remote access and connect to business networks. As a result, threat actors can use multiple techniques to access those systems and potentially disrupt operations. (See fig.) However, the scale of potential impacts from such attacks is not well understood. Examples of Techniques for Gaining Initial Access to Industrial Control Systems Distribution utilities included in GAO's review are generally not subject to mandatory federal cybersecurity standards, but they, and selected states, had taken actions intended to improve distribution systems' cybersecurity. These actions included incorporating cybersecurity into routine oversight processes and hiring dedicated cybersecurity personnel. Federal agencies have supported these actions by, for example, providing cybersecurity training and guidance. As the lead federal agency for the energy sector, the Department of Energy (DOE) has developed plans to implement the national cybersecurity strategy for the grid, but these plans do not fully address risks to the grid's distribution systems. For example, DOE's plans do not address distribution systems' vulnerabilities related to supply chains. According to officials, DOE has not fully addressed such risks in its plans because it has prioritized addressing risks to the grid's generation and transmission systems. Without doing so, however, DOE's plans will likely be of limited use in prioritizing federal support to states and industry to improve grid distribution systems' cybersecurity. Why GAO Did This Study Protecting the reliability of the U.S. electricity grid, which delivers electricity essential for modern life, is a long-standing national interest. The grid comprises three functions: generation, transmission, and distribution. In August 2019, GAO reported that the generation and transmission systems—which are federally regulated for reliability—are increasingly vulnerable to cyberattacks. GAO was asked to review grid distribution systems' cybersecurity. This report (1) describes the extent to which grid distribution systems are at risk from cyberattacks and the scale of potential impacts from such attacks, (2) describes selected state and industry actions to improve distribution systems' cybersecurity and federal efforts to support those actions, and (3) examines the extent to which DOE has addressed risks to distribution systems in its plans for implementing the national cybersecurity strategy. To do so, GAO reviewed relevant federal and industry reports on grid cybersecurity risks and analyzed relevant DOE documents. GAO also interviewed a nongeneralizable sample of federal, state, and industry officials with a role in grid distribution systems' cybersecurity.
    [Read More…]
  • U.S. Welcomes First Meeting of the Afghanistan High Council for National Reconciliation Leadership Committee
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Courts Suspending Jury Trials as COVID-19 Cases Surge
    In U.S Courts
    About two dozen U.S. district courts have posted orders that suspend jury trials or grand jury proceedings, and scale back other courthouse activities in response to a sharp nationwide rise in coronavirus (COVID-19) cases. The surge in new court orders in recent weeks marks a significant pause in efforts by federal courts to resume full operations.
    [Read More…]