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8/19/2005
Same Story, Different Country - Corporate Fraud Trial Gets Underway in Iceland
Same Story, Different Country - Corporate Fraud Trial Gets Underway in Iceland
This is as interesting a corporate crime matter as any currently being pursued in the U.S. today. Note the prominent mention of a UK corporate investigator assisting with the case. Oh yea, and it's pronounced Ray-Kee-Ah-Vick...
-- MDT
Iceland's corporate world on trial as Baugur case beginsThe original article appears here.
By Susie Mesure in Reykjavik
August 18, 2005
The Independant
Jon Asgeir Johannesson, the chief executive of Baugur and one of the UK's most prolific retail investors, launched his quest to clear his name yesterday after he was formally charged with committing fraud, embezzlement and breach of trust against the Icelandic company he co-founded with his father 13 years ago.
Pleading not guilty to 40 charges ranging from embezzling company funds for buying a yacht to swindling fellow investors, Mr Johannesson struggled to maintain his trademark aloof veneer during yesterday's 25-minute hearing in Reykjavik's main court.
His five co-defendants, who include his father and sister, all also protested their innocence. Their lawyers have a reprieve before the court sits again on 20 October to hear whether the defence team has managed to bolster its case before the hearings proper, which could last for years, kick off.
Spectators including Mr Johannesson's arch-foe and former business partner, Jon Gerald Sullenberger, jostled for the chance to see how one of Iceland's most eminent businessmen would cope with being formally charged. For Icelanders, it is as if their entire country is on trial, given that the unfolding legal drama pits its corporate against its political elite. Johannes Jonsson, Jon Asgeir's father, speaking afterwards, repeated his belief that the case was a political "conspiracy" drummed up on behalf of the country's former prime minister, David Oddson.
Wheeling out the first of its trump cards, Baugur's board yesterday said a favourable independent report by a UK corporate investigator gave it no qualms about reiterating its "unreserved support" for Jon Asgeir and the others charged. Deidre Lo, a director of Capcorn Argen, a law firm, claimed she had picked apart the 40 charges against the six defendants. Where the police investigators, who have spent the past three years investigating Jon Asgeir's corporate dealings, uncovered fraud, she maintained that in every instance Baugur had been victor not victim.
The crux of the case will hinge on the relationship between Gaumur, Jon Asgeir's private investment company, and Baugur, which is at the centre of almost half the charges. These so-called "related party transactions", which are rare in UK plcs, include one charge that Baugur lent 35m Icelandic kronur (£303,000) to Gaumur to buy shares in a Debenhams franchisee in 1999. Others concern the initial purchase of shares in Icelandair, part of the FL Group that has easyJet in its sights, in 1997 and the acquisition of various chunks of real estate in Reykjavik.
By and large, Icelandic law allows for such transactions between closely linked public and private companies, although there are limits on the loans that can be made in some cases. Whether Jon Asgeir clears his name will largely depend on the interpretation of this law.
Two of the most serious fraud charges relate to the acquisition of Thee Viking, a yacht in Florida, and tax avoidance of about ISK1m. One charge relates to payments to Nordica, Mr Sullenberger's US-based firm that used to source goods for Baugur to sell in its Icelandic retail outlets. There is confusion over whether any of the payments are related to the boat, which Jon Asgeir used when in the US. In his defence, the Baugur chief executive will argue that Gaumur paid $450,000 (£250,000) towards the boat.
Other charges assert that Mr Johannesson embezzled company funds by using a corporate credit card to pay for nearly 200 items. Although the indictment acknowledges that Mr Johannesson did repay the sums, he still stands accused of a crime that violates the country's Companies Act. Ms Lo said: "Here is a CEO of a very fast-growing company who travelled a great deal. He was in London four out of five working days. It's not unusual to use a company credit card but at all times Baugur owed him more money than he owed Baugur."
The fate of the Baugur boss will lie in the hands of three judges, described by one well-connected observer as "heavy hitters", rather than a jury.
In the meantime, Baugur's appetite for deals is undiminished. It recently bought a second Danish department store chain, adding to the £442m it has invested across the UK, Iceland and Denmark since the Icelandic police launched their investigation in August 2002. That same inquiry has scuppered two deals: the possible acquisitions of Arcadia and Somerfield to add to a UK portfolio that includes Hamleys, Iceland, Karen Millen and Oasis. But as Sege Jonsson, a taxi driver, said yesterday: "There is a saying in Iceland that still stands true. If today Jon Asgeir buys one share in a company, tomorrow you should buy two."
Jon Asgeir Johannesson, the chief executive of Baugur and one of the UK's most prolific retail investors, launched his quest to clear his name yesterday after he was formally charged with committing fraud, embezzlement and breach of trust against the Icelandic company he co-founded with his father 13 years ago.
Pleading not guilty to 40 charges ranging from embezzling company funds for buying a yacht to swindling fellow investors, Mr Johannesson struggled to maintain his trademark aloof veneer during yesterday's 25-minute hearing in Reykjavik's main court.
His five co-defendants, who include his father and sister, all also protested their innocence. Their lawyers have a reprieve before the court sits again on 20 October to hear whether the defence team has managed to bolster its case before the hearings proper, which could last for years, kick off.
Spectators including Mr Johannesson's arch-foe and former business partner, Jon Gerald Sullenberger, jostled for the chance to see how one of Iceland's most eminent businessmen would cope with being formally charged. For Icelanders, it is as if their entire country is on trial, given that the unfolding legal drama pits its corporate against its political elite. Johannes Jonsson, Jon Asgeir's father, speaking afterwards, repeated his belief that the case was a political "conspiracy" drummed up on behalf of the country's former prime minister, David Oddson.
Wheeling out the first of its trump cards, Baugur's board yesterday said a favourable independent report by a UK corporate investigator gave it no qualms about reiterating its "unreserved support" for Jon Asgeir and the others charged. Deidre Lo, a director of Capcorn Argen, a law firm, claimed she had picked apart the 40 charges against the six defendants. Where the police investigators, who have spent the past three years investigating Jon Asgeir's corporate dealings, uncovered fraud, she maintained that in every instance Baugur had been victor not victim.
The crux of the case will hinge on the relationship between Gaumur, Jon Asgeir's private investment company, and Baugur, which is at the centre of almost half the charges. These so-called "related party transactions", which are rare in UK plcs, include one charge that Baugur lent 35m Icelandic kronur (£303,000) to Gaumur to buy shares in a Debenhams franchisee in 1999. Others concern the initial purchase of shares in Icelandair, part of the FL Group that has easyJet in its sights, in 1997 and the acquisition of various chunks of real estate in Reykjavik.
By and large, Icelandic law allows for such transactions between closely linked public and private companies, although there are limits on the loans that can be made in some cases. Whether Jon Asgeir clears his name will largely depend on the interpretation of this law.
Two of the most serious fraud charges relate to the acquisition of Thee Viking, a yacht in Florida, and tax avoidance of about ISK1m. One charge relates to payments to Nordica, Mr Sullenberger's US-based firm that used to source goods for Baugur to sell in its Icelandic retail outlets. There is confusion over whether any of the payments are related to the boat, which Jon Asgeir used when in the US. In his defence, the Baugur chief executive will argue that Gaumur paid $450,000 (£250,000) towards the boat.
Other charges assert that Mr Johannesson embezzled company funds by using a corporate credit card to pay for nearly 200 items. Although the indictment acknowledges that Mr Johannesson did repay the sums, he still stands accused of a crime that violates the country's Companies Act. Ms Lo said: "Here is a CEO of a very fast-growing company who travelled a great deal. He was in London four out of five working days. It's not unusual to use a company credit card but at all times Baugur owed him more money than he owed Baugur."
The fate of the Baugur boss will lie in the hands of three judges, described by one well-connected observer as "heavy hitters", rather than a jury.
In the meantime, Baugur's appetite for deals is undiminished. It recently bought a second Danish department store chain, adding to the £442m it has invested across the UK, Iceland and Denmark since the Icelandic police launched their investigation in August 2002. That same inquiry has scuppered two deals: the possible acquisitions of Arcadia and Somerfield to add to a UK portfolio that includes Hamleys, Iceland, Karen Millen and Oasis. But as Sege Jonsson, a taxi driver, said yesterday: "There is a saying in Iceland that still stands true. If today Jon Asgeir buys one share in a company, tomorrow you should buy two."
-- MDT
Labels: Quest
It is not enough that consumers are paying higher cost for energy – Gas, Electric, Tel., Etc.
Due to the market volatility and the increase demand for energy worldwide and the manipulation of market conditions by various corporation.
Deregulation, which was designed to save the consumer on the cost of energy. Many new companies have started selling gas and electric in the past 20 years, as a result of this deregulation. We now have numerous deregulated third party suppliers of Gas and Electric that are gouging the consumers – billing prices higher than the regulated utility companies, inflating the bill, billing for product never delivered, billing phantom tax on the product, reneging on fixed price contract – when market prices go beyond the fixed contract. In short any way they can cheat, deceive and defraud the consumer is fair game.
Among the companies that practice such tactics is MULTIUT CORP or Multiut LLC of Skokie, Illinois the owner of the company Nachshon Draiman is well connected, one of the previous owners of Multiut was a federal judge and therefore has gotten away with numerous over billing and deceptive practices, there are numerous lawsuits for fraud pending against Multiut Corp and its owner Nachshon Draiman among them a Class Action Suit and Dynegy Mkg & Trade v. Multiut Corp, Nachshon Draiman et al 1:02-cv-07446 The Federal Court has imposed numerous contempt orders against Multiut and its owner and its owner Nachshon Draiman is involved in numerous other fraud in the Nursing Home business (defrauding the state Nursing License with false documents to obtain a Nursing Home License) and a hotel project where he committed a fraud of $45 million dollars and numerous other fraud and deception too numerous to mention. (Especially since Multiut and its owner Nachshon Draiman is represented by Jack Abramoff Law Firm – which has clout).
Energy Billing Fraud Charges vs Multiut owned by Nachshon Draiman!
Multiut Admitted to holding money belonging to customers.
In a Class Action proceeding initiated in November 2001 - The case after numerous delays by Multiut, is now proceeding.
Gore vs Multiut - IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS Case No. 01 CH 19688 (See: www.antidefamationusa.com)
Another Company is Santana Energy out of Texas. Some utility companies were forced to refund the consumers hundreds of million of dollars due to manipulation of pricing and billing – many of those shenanigans stem from the Enron debacle some precede it and continue on to date.
Many of these suppliers of Gas and Electric who are promoting saving are actually charging higher prices than the local utility company which defeats the intent of deregulation – Multiut’s billing shows 20% to 30% higher cost and billing for gas that was never delivered. Not to mention Multiut’s billing for non existent City of Chicago Tax on Natural gas and inflated billing for lighting retrofit to various Nursing Homes which inflates the Medicaid billing to the government.
Corporate CEO and other higher ups in the corporate world have been convicted of fraud and sentenced/fined (WorldCom, Enron, Adelphia, Etc.). But it seems that some companies can continue to defraud the public without being hindered by the authorities.
Other frauds by Gas Electric suppliers are: Centerpoint Energy Inc.,
Pending lawsuits are: AG files fraud suit against Sempra affiliate alleging Enron-like games.
JD
This article is presented by Citizen for Honest and Fair Billing
PS
THREE FORMER NICOR ENERGY EXECUTIVES AND OUTSIDE
LAWYER INDICTED IN ALLEGED CORPORATE FRAUD SCHEME
CHICAGO -- Three former executives of Nicor Energy L.L.C. and an outside lawyer for the Lisle, Ill.-based company were indicted today for allegedly engaging in a corporate fraud scheme to obtain $400,000 in bonuses and other benefits for themselves by inflating revenues - at times by as much as $6 million - and understating expenses to make the company appear more profitable than it actually was in 2001. The defendants allegedly fraudulently deprived Nicor Energy - a retail energy marketing company established in 1997 as a 50/50 joint venture by Nicor Inc. and Dynegy Inc. - of their honest services and caused a loss to investors in publicly-traded Nicor, Inc. and Dynegy. On July 18, 2002, Nicor Inc. issued a press release announcing that its financial results for the second quarter and first half of 2002 were negatively affected by several factors, including irregularities in accounting at Nicor Energy, and the following day, the stock price of Nicor Inc. fell approximately 40 percent. Nicor Energy is currently in the process of final liquidation.
The five-count indictment returned by a federal grand jury charges Kevin Stoffer, formerly Nicor Energy's President and Chief Executive Officer; Andrew Johnson, former Director of Financial Services; John Fringer, former Vice President of Major Markets and Power Services; and outside counsel Michael Munson, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois
Judge Concludes Energy Company Drove Up Prices
by Richard A. Oppel Jr. and Lowell Bergman, September 24, 2002 (New York Times)
QUOTE: In the ruling, Curtis L. Wagner Jr., the chief administrative law judge at the Federal Energy Regulatory Commission, essentially validates the suspicions of California officials that El Paso, the nation's largest natural gas company, withheld natural gas from the state, thus driving up the cost of electricity...
ABSTRACT: In a judge’s ruling, a company who provides gas and energy supplies was found to have aided in raising the price of gas and electricity in California during previous energy crisis’s. The El Paso Corporation allegedly withheld natural gas, and in doing so, raised both gas and electricity prices. The ruling is still up for further review and many lawsuits are pending, but the El Paso Corporation contends that operations were normal and that an appeal will follow if the current decision is upheld.
--- C. Heimbuch-Skaley
MADIGAN, DALEY ANNOUNCE $196 MILLION SETTLEMENT WITH PEOPLES ENERGY; CUSTOMERS OF PEOPLES GAS AND NORTH SHORE GAS TO RECEIVE $100 MILLION IN CREDITS
Chicago – Attorney General Lisa Madigan and Mayor Richard M. Daley today announced that Peoples Energy has agreed to more than $196 million in consumer credits and benefits as part of a settlement that will provide much-needed relief to current Peoples Gas and North Shore Gas customers, establish a more than $25 million program of conservation and weatherization assistance for low- and moderate-income households and reconnect customers who have been disconnected from their heating services due to an inability to pay the high gas prices.
MADIGAN, DALEY, CUB ANNOUNCE REFUND CREDITS TO APPEAR ON NEXT GAS BILL FOR CUSTOMERS OF PEOPLES GAS AND NORTH SHORE GAS
Chicago — Attorney General Lisa Madigan, City of Chicago Mayor Richard M. Daley and Citizens Utility Board (CUB) Executive Director David Kolata today announced that as a result of their settlement agreement with Peoples Energy more than one million current customers of Peoples Gas and North Shore Gas will see refund credits on their next gas bills.
To compensate for over billing consumers between 2000 and 2004, Peoples Energy has agreed to provide a refund credit to each of the 1,014,071 current customers of Peoples Gas and North Shore Gas. The credits – totaling $100 million – will be included on the first bill received by customers after April 24.
“These refund credits cannot change the conduct of Peoples Energy, but they will help consumers who suffered as a result,” Madigan said. “This is an appropriate response to Peoples' conduct.”
“We are pleased that consumers are finally receiving the refunds that they deserve,” said City of Chicago Corporation Counsel Mara Georges. “Consumers should not have to pay for bad planning and business decisions by Peoples Gas.”
WEDNESDAY, JUNE 13, 2007
Justice Department Investigating NY Energy Markets
New York's wholesale energy market is being investigated for possible antitrust violations, according to a recent news report. A Newsday story indicates that a subject of the investigation may be possible withholding of capacity from the market, to drive prices up. This revelation has raised further questions regarding the proposed merger of National Grid and Keyspan, which controls significant amounts of generation capacity in the New York City markets.
Reliance Energy fraud on consumers
REL power bills have shocked Mumbai citizens, who will now have to pay double the amount they had been paying. A citizen pins down — point-by-point — the discrepancies in this billing and warns of the "REL fraud" perpetrated on the consumer.
2007.09.17
Oilman on trial in New York was involved in Austin's 1970s energy crisis
Monday, September 10, 2007
Former president of Coastal States Gas charged with wire fraud and conspiracy
Lawyers for Austin and San Antonio also learned that Lo-Vaca was selling gas to utilities serving the Dallas-Fort Worth area at the same time it was curtailing in Austin and San Antonio. In 1974 and 1975, Austin and other customers sued Lo-Vaca for $1.6 billion in rate overcharges.
EnCana Corp. et al.
A class action lawsuit has been filed against EnCana Corp., its marketing company, and sixteen other companies and corporations on behalf of Fairhaven Power Co. and all other business entities in the state of California that purchased natural gas between Jan. 1, 2000, and Dec. 31, 2001. The suit alleges a massive scheme to control the flow and prices of natural gas that was sold within California, which is a violation of U.S. antitrust laws. The suit further charges the companies with false reporting of natural gas prices, of conducting "wash trades" designed to boost trading volumes and conspiring to avoid competing with each other in the pricing and sale of natural gas in California.
Centerpoint Energy Inc. et. al.
A class action lawsuit has been filed against Centerpoint Energy Inc. and other natural gas suppliers on behalf of millions of residential customers in Arkansas, Texas, Louisiana, Oklahoma, Mississippi and Minnesota. The suit alleges fraud, unjust enrichment and claims that a conspiracy between the companies has led to the artificially inflated natural gas prices.
If you feel you qualify for damages or remedies that might be awarded in this class action please click the link below to submit your complaint.
BP & Reliant - Guilty of Price Fixing
In yet another settlement over the California Energy Crisis, BP & Reliant admit guilt and settle with the State of California.
Source: TheTip, 2003-07-21
Candidate: Enron
Naturally, the settlement does nothing to compensate the hundreds of thousands of people whose jobs and lives were ruined by the FERC-Caused California Recession.
BP Energy agreed to contribute $3 million to fund low-income home energy assistance programs in California and Arizona to settle a case in which federal energy regulators said that they found apparent evidence of power price manipulation.
In March, staff members of the Federal Energy Regulatory Commission issued a report on the 2000-01 energy crisis in the West. It said it found evidence indicating Reliant Resources and BP Energy, both based in Houston, appeared to have engaged in coordinated efforts to manipulate power prices at a trading hub in Arizona.
Both companies were ordered to demonstrate why their authority to sell power on unregulated wholesale markets shouldn't be revoked.
BP Energy doesn't lose that ability under the settlement. But for six months, BP Energy's electricity sales in the West will be subject to review by the FERC with the possibility of refunds.
Mid America Energy Inc.,
The Securities and Exchange Commission said today that it had filed a civil complaint against Gary M. Milby and his company, Mid-America Energy Inc., asserting that they bilked several hundred investors of more than $19 million in what the commission described as "a fraudulent oil-and-gas investment scheme."
SEC charges four more former Nortel execs
Allegations the men manipulated reserves to change Nortel earnings
The Associated Press
Updated: 6:36 a.m. PT Sept 13, 2007
TORONTO - The U.S. Securities and Exchange Commission has charged four more former Nortel Networks Corp. executives with accounting fraud, alleging they manipulated reserves to change Nortel’s earnings statements on the orders of more senior officers of the Canadian networking equipment maker.
Sept. 21, 2007
ENERGY Edison Is Hit Hard For Fraud On Survey
Category: Lexis Nexis - AC, CG News & Updates, Acc News & Updates, A/F News & Updates, ET News & Updates, PG News & Updates, Main AC RSS Feed, AC - Whats New
BY: LOS ANGELES TIMES – Oct. 2, 2007
ELIZABETH DOUGLASS, TIMES STAFF WRITER
There is "overwhelming" evidence that senior managers at Southern California Edison knew about a seven-year fraud at the Rosemead utility to collect millions of dollars in customer-funded incentives, according to a judge's decision released Monday by the California Public Utilities Commission.
The opinion, written by Administrative Law Judge Robert Barnett, makes official the $200-million cost to Edison that he outlined Thursday in an unusual oral preview of his conclusions. The decision required Edison to lose $160 million in performance bonuses and to pay a $40-million fine -- among the largest ever assessed by the commission.
Waste Management Pays For Executives' Fraud
Washington (Aug. 30, 2005) - Looking to avoid the publicity of a trial, the country's largest trash hauler will pay $26.8 million to cover most of the costs of a settlement between former executives and the Securities and Exchange Commission.
The settlement by Waste Management Inc. was approved in U.S. District Court in Chicago. Originally filed in 2002, the SEC suit had accused Waste Management's founder and former chair, Dean Buntrock, and three other former executives of failing to report expenses, postponing costs and filing false financial statements, in order to meet earnings targets between 1992 and 1997.
A new chief executive of the company ordered a review of the company's accounting practices in late 1997, eventually uncovering the problems and leading to a restatement of $1.7 billion in earnings. At the time, the restatement was the largest in the country's history.
In 2001, Waste Management agreed to pay $457 million to settle a class-action lawsuit alleging securities-law violations, and received about $20 million in a related settlement with now-defunct auditor Arthur Andersen LLP. At the time of that settlement, Buntrock reportedly agreed to pay a $2.3 million fine, and Andersen later paid another $7 million to settle with the SEC.
Conviction upheld in Cendant case
A federal appeals court upheld the conviction of former Cendant Corp. Chairman Walter Forbes on Monday for leading an accounting fraud.
The 2nd U.S. Circuit Court of Appeals in New York upheld Forbes' conviction on conspiracy to commit securities fraud and two counts of making false statements. Forbes was sentenced to 12 years and seven months in prison and ordered to pay more than $3 billion in restitution. Forbes, 64, reported to prison Aug. 7. 2007.