On November 9, 2012, Anand Sekaran, President and Director of Wasson Capital, Ltd. (“Wasson”) entered a plea of guilty to charges that he engaged in a $2.3 Million fraudulent scheme to defraud Wasson’s investors. He settled civil charges with the SEC that same day. In its announcement of the guilty plea, DOJ characterized Mr. Sekaran’s actions as constituting a “classic Ponzi scheme.” In its news release regarding the civil charges, the SEC asserted that Sekaran concealed trading losses and diverted funds for personal use, including an allegation that he fabricated documents showing illusory profits after his trading strategy became unprofitable in 2008 and produced substantial losses to clients.
According to the government, Sekaran originally formed Wasson in 1997 as an asset management firm that would invest client money primarily in the U.S. options market. The government claims that as a result of both substantial losses he incurred and several redemption requests, Sekaran then engaged in a scheme to defraud investors, divert investor funds and perpetrate a “Ponzi” scheme through two methods from 2009 through June 2011. The government explained that first Sekaran misrepresented to existing and potential investors, the firm’s investment value and past performance, the way investor funds were being used and the source of the funds distributed to investors who had requested redemptions. The government alleged that Sekaran also distributed fraudulent statements to investors in order to forestall redemption requests, induce new investors to contribute to Wasson and induce existing investors to provide additional contributions.
Sekaran entered a plea of guilty to one count of securities fraud and one count of mail fraud, agreeing to $2.3 million in restitution. As part of his settlement with the SEC, Sekaran also consented to an Order by the SEC, barring him from the securities industry and from penny-stock investing. Read More
Marc S. Raspanti along with Ken Gormley, Dean and Professor of Law at Duquesne University School of Law, will present, “Reflecting on Whitewater: Lessons in the Art of Negotiating Proffer Agreements Through the Prism of a Presidential Crisis” at the PACDL’s White Collar Practice conference held on November 9-10, 2012 in Philadelphia. James W. Kraus will be moderating the program.
2012 White Collar Practice
(12 credit hours)
Ritz Carlton Hotel
10 Avenue of the Arts
Philadelphia, PA
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MoneyGram International, Inc. has entered into a Deferred Prosecution Agreement (DPA) with DOJ in which it admits to criminally aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program. As part of the agreement, a criminal information was filed in the U.S. District Court for the Middle District of Pennsylvania. The DPA calls for MoneyGram to forfeit $100 million.
MoneyGram International, Inc., which is headquartered in Dallas, operates a global money business, providing electronic money transfers. According to the government, MoneyGram processed thousands of transactions from MoneyGram agents known to be involved in an international scheme to defraud members of the public. MoneyGram profited by collecting fees and other revenue from the fraudulent transactions. Apparently, the scams included posing as victims, relatives in urgent need of money and falsely promising victims large cash prizes. The government alleged that in each of the cases, the perpetrators required the victims to send them funds through MoneyGram’s money transfer system. MoneyGram acknowledged that, despite the complaints of thousands of victims, it failed to terminate the agents involved in the scams.
The government further alleged that MoneyGram’s involvement in the fraud scheme resulted from a failure to meet its Anti-Money Laundering (AML) obligations under the Bank Secrecy Act (BSA), 31 U.S.C. §§ 5311 et seq., including failure to implement policies governing the termination of agents involved in fraud; failure to implement policies or procedures to file the required Suspicious Activity Reports (SARs); failure to conduct effective AML audits of its agents and outlets; failure to conduct adequate due diligence on prospective and existing MoneyGram agents; and failure to sufficiently resource and staff its AML program. Most of the requirements noted above were either added to the BSA or strengthened as part of the USA Patriot Act of 2001.
As part of the DPA, MoneyGram is also required for the next five years to retain a corporate monitor who will report regularly to DOJ. Read More
Michael A. Morse will participate on the panel, “Leading Qui Tam Counsel,” at the Thirteenth Annual Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum at the Grand Hyatt in Washington, DC on November 6, 2012.
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Pietragallo Gordon Alfano Bosick & Raspanti, LLP is pleased to announce the election of its newest partner, Douglas K. Rosenblum, in its Philadelphia office. Mr. Rosenblum, a former prosecutor and certified fraud examiner, is an accomplished attorney with experience in all aspects of White Collar Criminal Defense and Federal and State Qui Tam Litigation.
Mr. Rosenblum serves as Co-Chair of the ABA White Collar Crime Committee’s Philadelphia Young Lawyers’ Steering Committee.
Community involvement and charitable work is of great importance to Mr. Rosenblum. He volunteers as an attorney for abused and neglected children through the Montgomery Child Advocacy Project. Mr. Rosenblum is the Founder of the Hedda L. Komins Fund for Breast Cancer Research and Prevention at Fox Chase Cancer Center.
Mr. Rosenblum received his B.S. in Accountancy, magna cum laude, with a minor in Spanish, from Villanova University. He received his J.D. from Villanova University School of Law, where he was a member of the Environmental Law Journal and National Mock Trial Team and received the David E. Worby Scholarship for Trial Advocacy. Read More
Background Facts of Case
On October 20, 2006, Dr. Jack Rabin was a professor employed by the Pennsylvania State University. Sandra Rabin later pursued a fatal workers’ compensation claim petition alleging Dr. Rabin’s November 13, 2006 death resulted from work-related injuries incurred on October 20, 2006. At that time, Dr. Rabin already had several serious systemic conditions, including lymphadema, lower extremity cellulitis, uncontrolled diabetes, hypertension, breathing difficulties, cardiac problems, kidney function deficits, and infections.
Theodore Wachhaus testified in support of the fatal claim petition. He was preparing to defend his doctoral thesis before a dissertation committee, of which Dr. Rabin was the chairman. Mr. Wachhaus had worked closely with Dr. Rabin in crafting his dissertation. Mr. Wachhaus had regularly met with Dr. Rabin off-campus, for their mutual convenience, in order to discuss his doctorate, because he was teaching at Penn State during the day, while Dr. Rabin was teaching there during evenings.
On October 20, 2006, Mr. Wachhaus and Dr. Rabin met at a restaurant to discuss Mr. Wachhaus’s dissertation. They arrived at the restaurant at noon and worked on the dissertation for over an hour. Then they served themselves their lunches at the restaurant’s salad bar. While at the salad bar, Dr. Rabin fell, fracturing and dislocating a shoulder, and fracturing his humerus. Mr. Wachhaus testified that their meeting that day was expected to last until 3:00 p.m., and they planned to continue discussing scholarly topics relating to their profession after having served themselves from the salad bar.
On the day of injury, surgery for both the shoulder and arm fractures was performed. Complications, however, developed, including cardiac and respiratory distress. Dr. Rabin died November 13, 2006, and according to Dr. Acri, his treating physician, he expired due to multiple medical problems stemming from his upper extremity injuries. Dr. Acri explained that the injuries caused Dr. Read More
Speaking at IBC Legal’s World Bribery & Corruption Forum in London on October 23, 2012, Lanny A. Breuer, Assistant Attorney General for the Criminal Division, reviewed DOJ’s anti-corruption efforts during his nearly 3½ year tenure in the Criminal Division. He brought to light the Kleptocracy Asset Recovery Initiative wherein DOJ has brought civil actions against the proceeds of foreign officials who engage in corruption. According to Breuer, “Our theory is simple: even if we cannot pursue you criminally in the United States – because we lack criminal jurisdiction, for example – corrupt leaders should not be permitted to use the United States as a safe haven for the proceeds of their corrupt activities.”
As examples, he cited DOJ’s success in obtaining a restraining order against more than $3 million in corruption proceeds related to James Onanefe Ibori, the former governor of the oil producing Delta State in Nigeria, as well as restraints against an additional $4 million in Ibori assets, including the proceeds from the sale of a penthouse unit at the Ritz-Carlton in Washington, DC. He took the opportunity to review both FCPA-related and non-FCPA-related enforcement efforts, discussing resolution of a case against Credit Suisse, which included a forfeiture of $536 million in connection with violations relating to transactions conducted by the bank on behalf of customers from Iran, Sudan and other sanctioned countries.
Breuer also revisited a theme that he has emphasized in prior speeches, outlining the benefits of non-prosecution agreements (“NPAs”) and deferred prosecution agreements (“DPAs”) as important components of criminal law enforcement. He indicated that these enforcement options allow prosecutors to move beyond what 20 years ago may have been a stark choice; “either indict or walk away.” Breuer explained that over the past 20 years, the government has moved beyond that stark choice by “agreeing to deferred prosecution against a corporation in exchange for an admission of wrongdoing; cooperation with the government’s investigation, including against individual employees; payment of monetary penalties; and concrete steps to improve the company’s behavior.” Read More
The United States Supreme Court began its 2012-2013 term earlier this month. There are several cases involving employment related issues before the Court:
SCOPE OF SUPERVISOR LIABILITY UNDER TITLE VII:
In Vance v. Ball State University, No. 11-556, Vance sued her employer for violation of Title VII alleging hostile work environment and retaliation among other claims. The trial court granted the employer’s motion for summary judgment, and the Seventh Circuit affirmed. The Seventh Circuit concluded that the employer conducted investigations of Vance’s complaints, demonstrating that there was no basis for employer liability on her hostile work environment claim. As for conduct allegedly committed by a “supervisor,” the Seventh Circuit held, “we have not joined other circuits in holding that the authority to direct an employee’s daily activities establishes supervisory status under Title VII.”
Thus, the Supreme Court will be reviewing a Seventh Circuit decision on an issue that divides various federal appellate courts. The issue being whether an employer can be held vicariously liable for severe or pervasive workplace harassment by (a) supervisors who are generally authorized to oversee the victim’s daily work (Second, Fourth and Ninth Circuits support liability on this basis); or, (b) only those supervisors who have the specific power to hire, fire, demote, promote, transfer or discipline their victim (First, Seventh and Eighth Circuit limit such liability). The case is set for argument on November 26, 2012.
MOOTNESS OF FLSA § 216(b) COLLECTIVE ACTION:
In Genesis Healthcare Corp. v. Symczyk, No. 11-1059, the Supreme Court will be reviewing a Third Circuit (Philadelphia) decision that considers whether members of a FLSA putative class action “die on the vine” when the employer offers to satisfy all of the claims of the lead plaintiff. The Third Circuit held that an offer of judgment did not moot the plaintiff’s claim. The focus will likely be whether or not federal courts maintain their jurisdiction over the other members’ FLSA claims when the lead plaintiff’s claims are satisfied through settlement. Read More
MARC S. RASPANTI, partner of Pietragallo Gordon Alfano Bosick & Raspanti, LLP, has become a Fellow of the American College of Trial Lawyers, one of the premier legal associations in America.
The induction ceremony at which Mr. Raspanti became a Fellow took place recently before an audience of approximately 1,070 persons during the recent 2012 Annual Meeting of the College at the Waldorf Astoria Hotel in New York, New York.
Founded in 1950, the College is composed of the best of the trial bar from the United States and Canada. Fellowship in the College is extended by invitation only and only after careful investigation, to those experienced trial lawyers who have mastered the art of advocacy and whose professional careers have been marked by the highest standards of ethical conduct, professionalism, civility and collegiality. Lawyers must have a minimum of fifteen years trial experience before they can be considered for Fellowship.
Membership in the College cannot exceed one percent of the total lawyer population of any state or province. There are currently approximately 5,838 members in the United States and Canada, including active Fellows, Emeritus Fellows, Judicial Fellows (those who ascended to the bench after their induction) and Honorary Fellows. The College strives to improve and elevate the standards of trial practice, the administration of justice and the ethics of the trial profession. Qualified lawyers are called to Fellowship in the College from all branches of trial practice. They are carefully selected from among those who customarily represent plaintiffs in civil cases and those who customarily represent defendants, those who prosecute accused of crime and those who defend them. The College is thus able to speak with a balanced voice on important issues affecting the legal profession and the administration of justice.
Mr. Raspanti has been practicing civil and criminal law in Philadelphia for over 28 years. Read More
Pennsylvania products liability law remains unsettled and a recent decision from the Third Circuit Court of Appeals only highlights the confused state of the law and the divergent standards that may be applied in the state and federal courts. With its decision in Sikkelee, et al. v. Precision Airmotive Corporation, et al., 12-8081, — F.Supp.2d — (3d Cir. Oct. 17, 2012), the Circuit reaffirmed its two prior opinions that federal courts sitting in diversity should look to sections 1 and 2 of the Restatement (Third) of Torts: Products Liability as the standard for defining whether a product is defect. In contrast, the Supreme Court has yet to definitively address the applicability of the Restatement (Third), and most recently noted in Beard v. Johnson & Johnson, Inc., 41 A.3d 823, 839 (Pa. 2012) that section 402A of the Restatement (Second) is the current law of Pennsylvania. What this split means in practice is that products cases in Pennsylvania may have markedly different outcomes depending upon whether they proceed in state or federal court, as the federal courts shift away from Pennsylvania’s traditional standard may allow for broader consideration of conduct related evidence.
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