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Archive for May 12th, 2014

Seeking Tough Justice in Probes into Financial Institutions, But Settling for Empty Promises

Atty. Gen. Holder/doj file photo

By Jesse Eisinger 
ProPublica 

Don’t get too excited about bank indictments.

The Justice Department is talking tough. In an unusually frank video statement, Attorney General Eric H. Holder Jr. proclaimed that he was personally overseeing major financial investigations and that his department was poised to bring charges against several large institutions. The United States attorney in Manhattan, Preet Bharara, gave a rousing speech several weeks ago, declaring that the era of “too big to jail” is over.

The Justice Department is readying charges against Credit Suisse and BNP Paribas, two overseas banks under scrutiny for violations of United States law. Leave aside the appearance that prosecutors can only go after doggone foreigners. After all of this hype, it will be an enormous embarrassment if Justice ends up settling for a fine and some kind of deferred prosecution agreement.

In an article in ProPublica and The New York Times Magazine last week, I argued that federal prosecutors have rendered themselves incapable of meaningfully sanctioning the largest companies or bringing charges against top executives.

Any charges against large financial institutions carry symbolic power. But the more crucial questions are which entities are held accountable, whether the culture that led to criminal conduct is changed and whether any individuals are ultimately brought to justice.

As part of its investigation of the rigging of global benchmark interest rates, the Justice Department obtained guilty pleas. But the contrite parties were obscure Japanese subsidiaries of UBS and the Royal Bank of Scotland. Was this likely to deter future bad behavior by executives at those companies or their competitors? Many were skeptical.

Despite Mr. Holder’s tough-sounding video appearance, it is clear that prosecutors are twisting themselves into awkward yoga poses to minimize the damage any charges against companies might inflict on the larger economy. That’s prudent, of course, but it also suggests that the companies still have considerable leverage in preserving their essential profit centers.

Read more »

TSA Supervisor Charged on Accusations of Paying Underage Girls for Sex in Dominican Republic

Steve Neavling
ticklethewire.com

A TSA supervisor is accused of paying two 15-year-old girls to have sex with him in the Dominican Republic, The New York Daily News reports.

Vernon Lythcott, who was arrested at Kennedy Airport as he planned to board a flight to the Dominican Republic, was charged Friday for having sex with the two underage girls.

The 48-year-old Brooklyn man allegedly paid $80 to have sex with the girls.

“The victims also reported that during the course of that night they had used Vernon Lythcott’s cellular telephone to check their Facebook accounts and had also ‘friended’ Lythcott on Facebook,” Homeland Security special agent Karine Stewart stated in the criminal complaint.

OTHER STORIES OF INTEREST

New DEA Head of Houston Division Brings Plethora of Border Experience

Steve Neavling
ticklethewire.com

Joseph Arabit, the new head of the Houston Division of the DEA, arrives with a plethora of border experience that authorities hope will help crack down on drug cartel activity between the Texas-Mexico border, KHOU.com reports.

Arabit previously was in charge of the DEA office in El Paso at a time of intense activity from rival drug cartels crossing the border into the U.S.

“The murder rate in Juarez started to climb in 2008,” said Arabit recalling his first few months as special-agent-in-charge in El Paso.

Despite the violence across the border of El Paso, the U.S. city remained relatively safe because of Arabit’s actions to work with local, state and other federal agencies to clamp down.

“Once we had those individuals identified we did all that we could to link them to a U.S. crime they had committed in the past and then took it a step further,” Arabit said.

Seeking Tough Justice in Probes of Financial Institutions, But Settling for Empty Promises

Atty. Gen. Holder/doj file photo

By Jesse Eisinger 
ProPublica 

Don’t get too excited about bank indictments.

The Justice Department is talking tough. In an unusually frank video statement, Attorney General Eric H. Holder Jr. proclaimed that he was personally overseeing major financial investigations and that his department was poised to bring charges against several large institutions. The United States attorney in Manhattan, Preet Bharara, gave a rousing speech several weeks ago, declaring that the era of “too big to jail” is over.

The Justice Department is readying charges against Credit Suisse and BNP Paribas, two overseas banks under scrutiny for violations of United States law. Leave aside the appearance that prosecutors can only go after doggone foreigners. After all of this hype, it will be an enormous embarrassment if Justice ends up settling for a fine and some kind of deferred prosecution agreement.

In an article in ProPublica and The New York Times Magazine last week, I argued that federal prosecutors have rendered themselves incapable of meaningfully sanctioning the largest companies or bringing charges against top executives.

Any charges against large financial institutions carry symbolic power. But the more crucial questions are which entities are held accountable, whether the culture that led to criminal conduct is changed and whether any individuals are ultimately brought to justice.

As part of its investigation of the rigging of global benchmark interest rates, the Justice Department obtained guilty pleas. But the contrite parties were obscure Japanese subsidiaries of UBS and the Royal Bank of Scotland. Was this likely to deter future bad behavior by executives at those companies or their competitors? Many were skeptical.

Despite Mr. Holder’s tough-sounding video appearance, it is clear that prosecutors are twisting themselves into awkward yoga poses to minimize the damage any charges against companies might inflict on the larger economy. That’s prudent, of course, but it also suggests that the companies still have considerable leverage in preserving their essential profit centers.

Read more »

FBI Agent Arrested in Pakistan Faces Formal Charges Soon for Trying to Bring Ammunition, Knife on Plane

Steve Neavling
ticklethewire.com

Police are expected to file formal charges soon against the FBI agent who was arrested in Pakistan after authorities said he tried to carry ammunition and a knife onto a plane in Karachi.

The Associated Press reports that a judge on Saturday urged police to file the charges by May 19, the Associated Press reports.

FBI Agent Joel Cox of the Miami Field Office is expected to be back in court on that date. He is free of jail on a $9,800 bail.

Pakistani officials have said there appeared to be no criminal intent in trying to bring the ammunition and knife.

U.S. officials said Cox forgot to remove the weapons from his carry-on luggage.

Former Israeli Ambassador: FBI Never Scolded Foreign Diplomats for Widespread Spying Since 9/11

Steve Neavling
ticklethewire.com

Trying to combat published reports that the FBI has scolded Israeli diplomats dozens of times for spying on American intelligence since 9/11, the former Israeli ambassador to the U.S. said the allegations were baseless.

The Jerusalem Post reported that the former ambassador, Michael Oren, insisted the relationship between the two countries has been solid and was never compromised by unfounded claims of rampant Israeli spying.

Newsweek magazine published reports last week that Israeli officials were frequently spying on the U.S. and were summoned by the FBI dozens of times to knock it off.

“Beginning in the mid-1990s, well after Israel promised to stop spying in the US in the wake of the Pollard affair, the FBI regularly felt compelled to summon Israeli diplomats in DC for a scolding, two former top counterintelligence officials told ‘Newsweek.’ During the decade following 9/11, one said, the Israelis were summoned ‘dozens’ of times and told to ‘cut the shit,’ as one, a former top FBI official, put it. But as an ‘ally,’ the Israelis almost always got off with only a warning.”

Justice Department Seeks Permission to Hack, Search Remote Computers

Steve Neavling
ticklethewire.com

It used to be the bad guys who hacked computers.

But now law enforcement is resorting to the same trickery to search remote computers for investigations.

The IDG News Service reports that the Justice Department is seeking permission to hack computers to investigate complex criminal schemes that often utilize millions of machines nationwide.

The request has worried digital rights groups who said the hacking is intrusive and may violate the Fourth Amendment protecting against unreasonable searches and seizures.

“By expanding federal law enforcement’s power to secretly exploit ‘zero-day’ vulnerabilities in software and Internet platforms, the proposal threatens to weaken Internet security for all of us,” Nathan Freed Wessler, a staff attorney with the American Civil Liberties Union, said by email.

Arizona Republic Editorial: Border Patrol Has Reckless Accountability That Should Worry Everyone

By The Arizona Republic
Editorial 

The Border Patrol’s opaque approach to law enforcement and its reckless lack of accountability does not just affect undocumented border crossers.

It’s your problem, too.

The latest example of how bad things are comes from the American Immigration Council, which examined 809 complaints of abuse filed against the Border Patrol. It found 13 that resulted in any action by Border Patrol’s parent agency, Customs and Border Protection.

Thirteen. Out of 809. Forty percent were still pending investigation.

Some people think this doesn’t matter because of who is involved. People who cross the border without documents are lawbreakers who deserve no sympathy, according to this argument.

There are at least four big holes in that excuse.

To read more click here.