Legal Newswire Blog

Archive for the ‘Banking and Finance’ Category

Studio City resident, Steven Krell, a 61 year old ex-accountant and Los Angeles lawyer, who pleaded no contest to state grand theft charges in 2008, was sentenced on Monday to probation and house arrest. Krell was sentenced for filing federal false tax returns after embezzling nearly $1.5 million from two of his clients, including an elderly woman with dementia.

Krell, a former partner in the Los Angeles firm of Green, Hasson and Janks, pleaded guilty in June. He told U.S. District Judge Percy Anderson he used the stolen money for his own use and lied to the government.

Krell admitted in his plea agreement that he embezzled $1,476,900 from the elderly woman, her trust and a physician starting in 1997 and continuing through 2003, says Michael Moriarty of the Internal Revenue Service.

The Daily News Wire reports that to accomplish his scheme, Krell had signature authority over bank accounts belonging to the trust and the woman, facilitating withdrawals, according to court papers. In the second case, Krell falsely told the doctor he was investing his funds.

Anderson sentenced Krell on Monday in downtown Los Angeles to three years of probation, including 30 hours of community service per month and eight months of house arrest, Assistant U.S. Attorney Paul Rochmes said.

Krell’s attorney, Michael Proctor, told the court his client had already paid about $500,000 in restitution.

In February 2008, Krell was sentenced in Los Angeles Superior Court to seven years and four months behind bars for the same underlying conduct – grand theft.

The judge stayed the prison term on the condition that Krell comply with the terms of his probation and continue long-term psychiatric treatment after he made “significant” restitution payments, according to the District Attorney’s Office. Krell also served less than a year in county jail and was placed on supervised release for seven years.

In the state case, Krell, who was also once a licensed attorney, admitted helping himself to nearly $1 million from the trust of a 90-year-old woman, who was mentally incapacitated, and looting about $400,000 from the physician’s account he was managing.

As part of his plea, Krell agreed to file amended tax returns, reflecting $514,125 in illegally obtained proceeds, Moriarty said. In addition to the tax due, Krell is liable for the fraud penalty, which amounts to 75 percent of the tax due on the proceeds he embezzled.

The thefts were discovered in 2003 after a business manager became suspicious when he learned Krell was staying in expensive suites in Las Vegas and gambling at high-roller tables.

Rochmes said Monday’s sentence would have no effect on Krell’s stayed sentence for grand theft since those crimes were addressed in 2008, and the current federal case involves a separate issue.

The Daily News Wire contributed to ths story.

Related searches:
Tax Attorneys

Nicolas Cage Owes IRS $6M

The IRS has filed liens against Nicolas Cage for more than $6 million in back taxes and he is now forced to sell off major assets and investments to try and pay off his back tax liabilities.

Cage has filed a lawsuit in L.A. County Superior Court against his former business manager, Samuel Levin. The lawsuit claims that over a period of seven years, “Levin placed Cage in numerous highly speculative and risky real estate investments, resulting in Cage suffering catastrophic losses.”  View lawsuit docs.

Cage also claims Levin failed to pay taxes when they were due. Cage claims it was only this year, after firing Levin, he learned “the gravity of his financial condition.”

Lawyer, Marty Singer, claims in the lawsuit that Levin never advised him of his financial situation and is guilty of “over-extending [Cage's] line of credit with banks and financial institutions.” The suit claims Levin concealed Cage’s “true financial condition prior to investments and assets being acquired by [Cage].”

Forbes reports that Cage earned $40 milion between June 2008 and June 2009.

Cage is asking for a minimum of $20 million.

TMZ contributed to this story.

Marc Dreier

Marc Dreier has been sentenced to 20 years in prison for his $700M hedge fund swindle. Dreier pleaded guilty to swindling hedge fund investors out of $700 million by claiming he was authorized to sell promissory notes issued by Manhattan real estate developer Sheldon Solow.

Prosecutors had asked for a 145-year sentence, likened to the 150-year sentence U.S. District Judge Denny Chin handed down to Bernie Madoff. Dreier’s attorney sought no more than 12-and-a-half years.

Manhattan Federal Judge Jed Rakoff asked, “Is the government serious about asking for 145 years?”

“To me, for the government to ask for 145 years is to demean the sentence Judge [Denny] Chin imposed on Mr. Madoff.

“It says the government is not sensitive to the need to be fact-specific. … He [Dreier] is not going to get any sympathy from this court, [but] he is no Mr. Madoff under any analysis.”

“I am sorry, deeply sorry for the harm and sadness I have caused so many people,” said Dreier, as he addressed the court. “At this point, all I can do is express my shame and remorse.”

In a letter to the court last week, Dreier, a graduate of Yale College and Harvard Law School, said his crimes in part grew out of his finding himself in great debt several years after starting the law firm, the collapse of his 15-year marriage and a crushing sense of underachievement.

”All of this left me feeling overwhelmed – by my debt, by a disappointing career, by a failed marriage. And so, incomprehensibly, in 2002 I started stealing,” Dreier said. ”First, I invaded some settlement proceeds due a client. Then I arranged a few bogus investments with some individuals. And soon I stumbled upon the brazen idea of arranging fictitious loans from hedge funds, ostensibly to my principal client – the real estate developer referenced in the indictment – and diverting the loan proceeds to myself.”

“To me, the most appalling fact is the betrayal of trust,” Rakoff said.

The judge ordered Dreier to receive treatment for his alcoholism while locked up. Dreier’s attorney, Gerald Shargel, asked that Dreier serve his term at a federal prison in Allenwood, Pa.

Locate A Lawyer is an attorney directory where one can find a lawyer by practice and location. Here you can find criminal defense attorneys by city and state.

Bernie Madoff

Procsecutors asked for 150 years and they got it.  There will be no parole or light of day for Bernard Madoff.  Bernnie Madoff has finally been sentenced to 150 years as the mastermind of a multibillion dollar Ponzi scheme perpetrating Wall Street’s biggest investment fraud. Although his victims asked for the maximum and got it, their lives have been virtually destroyed.

Judge Denny Chin said the sentence was a symbolic one for a crime that showed “extraordinary evil” and “took a staggering human tool.” Madoff , addressing the court in a dark suit for about six minutes, said that when he started the scam, he thought he’d be able to “work my way out.” He said he lives in a tormented stated and expressed regret of leaving a “legacy of shame” to his family and grandchildren.” Madoff said his wife Ruth will make a statement later today. He maintained that he acted alone, saying, “How do you excuse lying to brother and sons? How do you excuse lying and deceiving a wife who stood by you for 50 years and still stands by you? There is no excuse for that and I don’t ask for forgiveness.” He then faced his victims in court and said, “I’m sorry.”   Madoff expressed regret before he received the maximum sentence for his crimes.

Watch Bernie Madoff Sentencing Video

Prosecutors continue to look into charges against Madoff’s wife and family.

Locate A Lawyer is an attorney directory where one can find a lawyer by practice and location. Here you can find criminal defense lawyers.

What would happen if we as average citizens issued IOU’s to cover our debt or to pay our taxes? You can imagine. Yet California is doing just that. Why don’t they start by cutting the jobs of the legislators who got us into this mess in the first place?

Reuters reports California’s controller, John Chiang, said on yesterday that he would have to issue IOUs in a week if lawmakers can’t quickly solve a $24 billion budget deficit, and the state’s treasurer plans to tap a reserve fund to meet debt service costs.

The legislature is gridlocked and has failed to pass a proposed $11 billion in cuts.

“Next Wednesday we start a fiscal year with a massively unbalanced spending plan and a cash shortfall not seen since the Great Depression,” Controller John Chiang said in a statement announcing that he would be forced to use IOUs to pay the state’s bills beginning on July 2.

“The state’s $2.8 billion cash shortage in July grows to $6.5 billion in September and after that we see a double digit freefall,” Chiang said. “Unfortunately, the state’s inability to balance its checkbook will now mean short-changing taxpayers, local governments and small businesses.”

State Treasurer Bill Lockyer, meanwhile, is planning to draw on reserves for economic recovery sales tax bonds, according to a spokesman.

Rating agency Standard & Poor’s warned it may downgrade the bonds, given the problems California is likely to face in replenishing its emergency funds.

The state is expecting to file a material event notice on Thursday to alert bondholders to the move that comes in response to plunging sales tax receipts, said spokesman Tom Dresslar.

“The senior coverage account will be drawn on and debt service on all economic recovery bonds will be paid in full on July 1,” Dresslar said.

California has been in crisis since the housing slump and credit crunch caused a severe decline in revenues. The state has seen its unemployment rate climb steadily to 11.5 percent in May from 6.8 percent a year earlier, according to labor department data.

Legislature Rejects Proposed Cuts

The government dipped into the same reserve fund in December to make a principal payment on economic recovery bonds, but was able to top the reserve back up within days.

The California Legislature on Wednesday voted down $11 billion in proposed cuts to state services, sending members seeking a budget deal back to the drawing board.

The vote failed largely along party lines in both houses, with the Republicans saying it falls short of the savings needed and amounted to posturing by Democrats.

Standard & Poor’s said it will review its economic recovery bond, or ERB ratings “after further evaluation of state projections as to the size and timing of potential draws on the ERBs’ reserves.”

The bonds, which were approved by voters in 2004 to help the state through another fiscal crisis, are secured by a sales tax and a general obligation pledge of the state.

California has about $8.6 billion of the bonds outstanding, although some have credit support and will not be affected by any rating change, S&P analyst David Hitchcock said.

S&P rates the bonds at A-plus, or fifth-highest investment grade and six notches above speculative, or “junk” status.

That’s one notch above the A rating assigned to California’s $57 billion of general obligation debt, the lowest rating of any U.S. state.

S&P has the GO debt on alert for a downgrade.

Moody’s also has the state on review and has warned of a potential multi-notch downgrade.

Draws on debt service reserve funds are rare and will likely make waves in the bond market, said Dick Larkin, director of credit analysis at the Iselin, New Jersey, office of broker Herbert J. Sims & Co.

“I am not aware of a situation where an issuer has drawn on a debt reserve for sales tax bonds,” he said in emailed comments.

“I am also not aware of a situation where a unit needed to draw on a formal debt reserve fund to pay normal debt service on general obligation bonds,” he said.

Larkin said the latest developments reflect the strain on California’s cash flow and may signal a situation that leads to a temporary disruption of normal debt service payments.

“In the end, though, I still believe that California debt holders would be paid in full, even if there is a temporary disruption because of this financial crisis,” he said.

Locate A Lawyer is an attorney directory where one can find a lawyer by practice and location.  Find California attorneys and lawyers.

June 17, 2009 – Famous clothing retailer, Eddie Bauer Holdings Inc., has filed Chapter 11 bankruptcy protection in the United States Bankruptcy Court of the District of Delaware. It reported a $44.5 million loss for the first quarter.

Eddie Bauer is based in bellevue Washington. The Wall Street Journal reported that the company is likely to be acquired by private-equity company CCMP Capital Advisors.

Find bankruptcy attorneys at LocateaLawyer.com

Hank Greenberg

The following is a report from The Associated Press

New York – a lawyer for AIG told jurors Monday at the start of the AIG civil trial, that former CEO Hank Greenberg of AIG plundered an AIG retirement program of billions of dollars because he was angry at being forced out of the company.

Attorney Theodore Wells told the jury in Manhattan that former AIG Chief Executive Officer Maurice “Hank” Greenberg improperly took $4.3 billion in stock from the company in 2005, after he was ousted by the company amid investigations of accounting irregularities.

“Hank Greenberg was mad. He was angry,” Wells said in U.S. District Court of the emotional state of the man who, over a 35-year-career, built AIG from a small company into the world’s largest insurance company.

Wells said that Greenberg, within weeks of being forced out in mid-2005, gave the go-ahead for tens of millions of shares to be sold from a trust fund. The fund was set up to provide incentive bonuses to a select group of AIG management and highly compensated employees that they would receive upon their retirement.

Greenberg, 84, has contended through his lawyers that he had the right to sell the shares because they were owned by Starr International, a privately held company he controlled.

Starr International was named after Cornelius Vander Starr, who created a worldwide network of insurance companies in the early 1900s.

AIG maintains that Starr and Greenberg, his protege and successor, decided in the late 1960s to organize the various companies under one holding company, AIG.

Starr International remained a private company and its shareholders decided in 1970 that the amount that its shares of AIG were worth above book value of about $110 million should be used to compensate AIG employees, AIG has said.

The embattled insurer is trying to reclaim the money from Starr it says was wrongly pocketed through stock sales by Greenberg.

Locate A Lawyer is an attorney and lawyer directory where one can find a lawyer by practice and location.

Republican leaders are looking forward to the 2010 midterm congressional elections. Their case is that Obama is spending recklessly. It is true that George W. Bush and democratic congress contributed to our economic mess by excessive borrowing and expansion of entitlement, but at what point do the fiscal choices and excessive spending now become Obama’s responsibility?

“The reckless fiscal policies of the past have left us in a very deep hole,” Obama said last week. “And digging our way out of it will take time, patience and some tough choices.”

If the previous administration’s fiscal policies were reckless, then why is Obama’s spending policies (which are magnified from the previous administration) not being viewed as reckless? How do you dig one’s way out of the mess by doing more of the same?

During a town hall forum in New Mexico last month, Obama acknowledged that the “long-term deficit and debt that we have accumulated is unsustainable.” The statement followed several fiscal reform initiatives, including changes in defense procurement policy, that advisers say will save tens of billions of dollars a year.

Other measures proposed appear have an air of desperation. In April, he publicly instructed his Cabinet secretaries to find $100 million in savings, a fraction of the more than $3 trillion annual budget.

“Everything that the White House does concerning this deep recession contains an element of gambling because no one has been here before,” said Robert B. Reich, labor secretary under President Bill Clinton and a professor of public policy at the University of California at Berkeley. “There’s no formula that can be applied, and that’s why the president’s popularity and credibility are vitally important.”

Reich noted, “Very soon we’ll be in the gravitational pull of the midterm elections, and it seems clear that Republicans want to challenge Obama on the economy and will run on tax cuts, deficit reduction, and a much more scaled-down and privatized health-care plan.”

“If they can get their act together and come up with something that is halfway respectable, and if the public begins to lose patience by Election Day, Democrats could have some real problems,” he said. “And those problems, of course, could possibly extend through 2012.”

Obama’s spending plans reflects a fiscal philosophy that differs from that of the last Democratic administration.

I fear we are gambling with our country’s future. Nowhere in history has spending of this magnitude been a solution to long term economic expansion.

Locate A Lawyer is an attorney directory where one can find a lawyer by practice and location.  Here you can find business lawyers , economic, political and legal news.

DETROIT — The decline of General Motors may be putting thousands of auto workers and managers out of work, but it will be putting a lot of lawyers to work.

In part, that is because so many top lawyers are already running up lots of billable hours working on the Chrysler bankruptcy case, while others have been hired by the government, which is financing the way through bankruptcy for Chrysler and, presumably, G.M. Read the story here:

High powered, Houston criminal defense attorney, Dick DeGuerin, is adamantly defending his client R. Allen Stanford, against the Securities and Exchange Commission (SEC). The SEC is accusing Stanford of conducting a “massive Ponzi scheme,” in which he and Davis allegedly skimmed $1.6 billion in cash through personal loans to Stanford.

“This is not a Ponzi scheme,” DeGuerin said of R. Allen Stanford, who is accused of orchestrating an $8 billion investment fraud along with his chief financial officer, James M. Davis, and chief investment officer, Laura Pendergest-Holt.

“The SEC has cremated the Stanford companies and Stanford, partly to get over the embarrassment at their lack of oversight in the Madoff case,” DeGuerin told Bloomberg’s Laurel Brubaker Calkins. “This is not a Madoff situation, this was not a Ponzi scheme at all,” DeGuerin told the Houston Chronicle. “There were hard assets for every dollar invested.” And in an exchange with TPMuckraker’s Zachary Roth, DeGuerin compared the SEC to “a bunch of Storm Troopers” who raided Stanford’s offices last month, causing investors to panic.

Davis, who initially invoked his Fifth Amendment right against self-incrimination, met yesterday with investigators in the case. Afterward, his lawyer depicted him as a “whistleblower”, according to Bloomberg.

“Jim is fully and actively cooperating, and trying to get investors who lost their money some help,” said David Finn. “He’s absolutely devastated, because he knows a lot of good people got hurt.”

Stanford and Davis haven’t yet been criminally charged, but Pendergest-Holt was arrested Feb. 26 on charges of obstructing the probe. She is now free on bail.

Read more at the Houston Chronicle blog post about this case.

Find Houston Criminal Defense Attorneys at LocateALawyer.com.