Securities Industry Commentator by Bill Singer Esq

June 15, 2018

State Attorneys General offices in Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia, and Wisconsin.announced a $100 million settlement with Citibank for fraudulent conduct involving U.S. Dollar (USD) LIBOR, a benchmark interest rate. READ the FULL TEXGT Settlement Agreement.
Citibank allegedly misrepresented the integrity of the LIBOR benchmark by concealing, misrepresenting, and failing to disclose that: 

(a) Citibank, at times, made USD LIBOR submissions to avoid negative publicity and protect the reputation of the bank; 
(b) Citibank's USD LIBOR submitters, on occasion, asked Citibank personnel in other units of the bank to avoid offering higher rates than Citibank's USD LIBOR submissions; and 
(c) Citibank expressed belief that other banks, at times, made USD LIBOR submissions that were inconsistent with their borrowing rates and contributed to inaccurate LIBORs.

United States of America v. Paul J. Manafort, Jr., and Konstantin Kilimnik, Defendants (Superseding Indictment, 17-CR-00201, United States District Court for the District of Columbia / June 8, 2018)
District Judge Amy Berman Jackson granted the government's motion, revoked Defendant Manafort's bail, and ordered him to jail over charges that he had tampered with witnesses while out on bail awaiting trial on federal conspiracy and money-laundering charges. As set forth in the Superseding Indictment under the heading "Introduction":

1. At all times relevant to this Superseding Indictment: 1. Defendant PAUL J. MANAFORT, JR. (MANAFORT) served for years as a political consultant and lobbyist. Between at least 2006 and 2015, MANAFORT, through companies he ran, acted as an unregistered agent of a foreign government and foreign political parties. Specifically, he represented the Government of Ukraine, the President of Ukraine (Victor Yanukovych, who was President from 2010 to 2014), the Party of Regions (a Ukrainian political party led by Yanukovych), and the Opposition Bloc (a successor to the Party of Regions after Yanukovych fled to Russia in 2014). 

2. MANAFORT generated tens of millions of dollars in income as a result of his Ukraine work. From approximately 2006 through 2017, MANAFORT, along with others including Richard W. Gates III (Gates), engaged in a scheme to hide the Ukraine income from United States authorities, while enjoying the use of the money. From approximately 2006 to 2015, when MANAFORT was generating tens of millions of dollars in income from his Ukraine activities, MANAFORT, with the assistance of Gates, avoided paying taxes by disguising tens of millions of dollars in income as alleged "loans" from nominee offshore corporate entities and by making millions of dollars in unreported payments from foreign accounts to bank accounts they controlled and United States vendors. MANAFORT also used the offshore accounts to purchase real estate in the United States, and MANAFORT used the undisclosed income to make improvements to and refinance his United States properties.

3. In furtherance of the scheme, MANAFORT, with the assistance of Gates, funneled millions of dollars in payments into numerous foreign nominee companies and bank accounts, opened by them and their accomplices in nominee names and in various foreign countries, including Cyprus, Saint Vincent & the Grenadines (Grenadines), and the Seychelles. MANAFORT concealed the existence and ownership of the foreign companies and bank accounts, falsely and repeatedly reporting to his tax preparers and to the United States that he had no foreign bank accounts. 

4. In furtherance of the scheme, MANAFORT, with the assistance of Gates, concealed from the United States his work as an agent of, and millions of dollars in payments from, Ukraine and its political parties and leaders. Because MANAFORT, among other things, participated in a campaign to lobby United States officials on behalf of the Government of Ukraine, the President of Ukraine, and the Party of Regions, he was required by law to report to the United States his work and fees. MANAFORT did not do so. Instead, when the Department of Justice sent inquiries to MANAFORT and Gates in 2016 about their activities, MANAFORT and Gates responded with a series of false and misleading statements. 

5. In furtherance of the scheme, MANAFORT used his hidden overseas wealth to enjoy a lavish lifestyle in the United States, without paying taxes on that income. MANAFORT, without reporting the income to his tax preparer or the United States, spent millions of dollars on luxury goods and services for himself and his extended family through payments wired from offshore nominee accounts to United States vendors. MANAFORT also used these offshore accounts to purchase multi-million dollar properties in the United States and to improve substantially another property owned by his family. 

6. In total, more than $75,000,000 flowed through these offshore accounts. MANAFORT, with the assistance of Gates, laundered more than $30,000,000, income that he concealed from the United States Department of the Treasury (Treasury), the Department of Justice, and others.

In response to reader comments and suggestions,
the Blog re-posts
the last two days' articles:

GUEST BLOG: A Suicide On Wall Street ( Blog)
Today's Blog presents a "Guest Blog" reprinted from an email, which was sent to us by an individual who prefers to maintain his anonymity and has asked to be known only as "A Former NASD Employee." It is a powerful and heart-wrenching story about a former regulator who became an industry compliance officer. Tomorrow, our publisher Bill Singer will offer his comments. For today, we let the email speak for itself.

The Human Factor On Wall Street ( Blog)
"A Former NASD Employee" shoves our faces in the toilet bowl and makes us hold our breath as we struggle. It's not a pretty picture. We have an industry where good people often find themselves at bad firms. Some say that's part of the problem. Good folks shouldn't work at bad firms. Good folks shouldn't rationalize how they are furthering fraud. Good folks shouldn't prop up dishonest firms and low-life stockbrokers.