Bribery and Corruption

Wal-Mart beats shareholder appeal in Mexico bribery lawsuit

A federal appeals court has rejected shareholder claims that executives and directors of Wal-Mart Stores Inc allowed and then covered up bribery by officials at its Mexico unit.

Following a unanimous vote, the 8th U.S. Circuit Court of Appeals in St. Louis upheld a lower court dismissal of a federal lawsuit accusing the defendants, including former chief executives Mike Duke and Lee Scott, of breaching their duties in failing to stop alleged bribery at Wal-Mart de Mexico.

The decision could mean the end of derivative litigation, where shareholders seek to hold company officials liable for damages.

Reuters, 22 July 2016

LATAM Airlines to pay $22 million over Argentine bribes case

LATAM Airlines Group SA has agreed to pay over $22 million in civil and criminal fines relating to an Argentine bribery case dating back to 2006.

According to the U.S. Securities and Exchange Commission, the fine of LATAM unit LAN related to "improper payments it authorized during a dispute between the airline and its union employees in Argentina". LAN deployed an Argentine consultant to negotiate with unions on the company's behalf and paid the consultant via a sham contract that passed funds to corrupt union officials.

The U.S. Justice Department said the scheme had violated the accounting provisions of the Foreign Corrupt Practices Act and the airline agreed to pay a $12.75 million criminal penalty. It will pay a further $9.4 million, including interest, to settle the SEC's charges of inadequate accounting controls.

In February, Ignacio Cueto, now LAN's chief executive, was ordered to pay a $75,000 fine regarding the same case. Cueto was a member of the airline's controlling Cueto family and he was LAN chief operating officer at the time.

Reuters, 25 July 2016

Fraud

U.S. charges three in $1 billion Medicare fraud case

The U.S. Department of Justice has charged Philip Esformes, the owner of a chain of Miami based nursing and assisted living facilities, and two others for allegedly carrying out a $1 billion Medicare scam.

Esformes allegedly conspired with two other people to defraud Medicare by providing medically unnecessary services to people. Esformes and his co-conspirators are also alleged to have received kickbacks in order to steer these beneficiaries to other health care providers. “In order to hide the kickbacks from law enforcement, these kickbacks were often paid in cash, or were disguised as payments to charitable donations, payments for services and sham lease payments”, the Justice Department said.

Bloomberg, 22 July 2016

Health and Safety

Tata Steel Fined

Tata Steel has been fined £1.98 million after two workers suffered injuries to their hands in two separate incidents involving machinery.

An investigation by the Health and Safety Executive into the incidents found that there was a failure to appropriately guard and manage the risks arising from dangerous parts of these items of machinery.

SHP, 28 July 2016

Bosworth Water Park Death

Police have confirmed that two people arrested over the death of a five-year-old boy in a suspected drowning at a water park in Bosworth, Leicestershire were held on suspicion of manslaughter by gross negligence.

Police declined to give any further details about the pair but the man and woman are believed to be Charlie's mother and stepfather. They have been released on bail whilst the investigation continues.

BBC News, 25 July 2016

Star Wars firm admits charges

A production company behind Star Wars has pleaded guilty to two criminal charges after Han Solo actor Harrison Ford broke his leg on set. The 74-year-old was hit by a hydraulic metal door and pinned to the ground on the Pinewood set of the Millennium Falcon in June 2014.

Foodles Production (UK) Ltd, a subsidiary of Disney, admitted two of four criminal charges at will be sentenced on 22 August 2016.

BBC News, 26 July 2016

M&D's Rollercoaster Crash

A safety inspector has been banned from working after he issued a safety certificate for a rollercoaster 16 days before it crashed injuring nine people.

The HSE has now issued a prohibition notice banning the inspector from carrying out inspections of fairground rides and also recommended new checks are carried out on rides that the man had previously certified as safe.

BBC News, 18 July 2016

Money Laundering

U.S. sides with HSBC to block release of money laundering report

It is reported that the U.S. government has asked a federal appeals court to block the release of a report detailing how HSBC Holdings Plc is working to improve its money laundering controls after the British bank was fined $1.92 billion.

In a government court filing, the U.S. Department of Justice sought to overturn an order issued earlier this year by a U.S. District Judge to make public a report by the bank's external monitor.

It said in the filing that "public disclosure of the monitor's report, even in redacted form, would hinder the monitor's ability to supervise HSBC,"

Reuters, 22 July 2016

Sanctions 

Treasury Sanctions Supporters of the Syrian Government

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has designated eight individuals and seven entities for providing support or services to the Syrian government, aiding Syria’s weapons of mass destruction program, or supporting designated individuals and entities. 

The action was taken by OFAC in response to continuing violence by the Assad regime against its citizens.

U.S. Treasury, 21 July 2016