Credit Suisse, Madoff, Alcoa, GE, Exelon in Court News
Credit Suisse Group AG (CSGN), the second-
biggest Swiss bank, was sued in New York state court by Dutch
pension fund Stichting Pensioenfonds ABP (ADPZ) over losses on
investments in mortgage securities.
Credit Suisse sold securities that were backed by low-
quality loans and turned out to be “far riskier” than
promised, ABP said in a complaint filed Dec. 29 in Manhattan.
The pension fund said Zurich-based Credit Suisse knew of
“the wholesale and systematic abandonment” of underwriting
guidelines by loan originators, leading to high default and
delinquency rates by borrowers.
ABP said it has suffered “substantial losses” on the
securities and that it’s increasingly probable that it would not
obtain the full payments it expected. A lawyer for ABP couldn’t
be reached for comment about the amount of securities at issue
in the lawsuit.
Steven Vames, a spokesman for Credit Suisse, declined to
immediately comment.
The case is Stichting Pensioenfonds ABP v. Credit Suisse
Group AG (CS), 653665-2011, New York State Supreme Court (Manhattan).
For the latest new suits news, click here. For copies of recent
civil complaints, click here.
Lawsuits/Pretrial
Madoff Trustee Revises Fictitious Statements to $52 Billion
The liquidator of Bernard Madoff’s brokerage revised the
con man’s fictitious customer statements to $52 billion from
about $65 billion as claims were withdrawn from the liquidation
proceeding.
The new number appears on the website of trustee Irving
Picard. Picard so far has paid $325.5 million to investors who
lost money in the Ponzi scheme holding approved claims of $7.3
billion, according to madofftrustee.com. The Securities Investor
Protection Corp. has committed $797.8 million to Madoff
investors, it said. The $65 billion was calculated on Nov. 30,
2008, before Madoff’s arrest.
In the three years since his appointment, Picard has raised
about $8.7 billion to pay claims, mostly through settlements
with investors whom he sued, accusing them of participating in
the fraud. About $6 billion of that amount is tied up in court
challenges, including $5 billion from Jeffry Picower’s estate
and $1 billion from Tremont Group Holdings Inc., according to
the website.
Picard spent $434 million liquidating the estate through
September, including fees for himself and his law firm of more
than $200 million.
Picard, who has filed 1,000 lawsuits seeking $100 billion
from banks such as HSBC Holdings Plc (HSBA) and JPMorgan Chase Co. (JPM),
has seen more than $28 billion of his claims tossed by district
judges. He is currently appealing the rulings. His $59 billion
suit against UniCredit SpA (UCG) and Bank Medici AG founder Sonja Kohn
is being reviewed by U.S. District Judge Jed Rakoff.
Madoff, 73, who pleaded guilty to charges of masterminding
the biggest Ponzi scheme in history, is serving a 150-year term
in a federal prison in North Carolina.
The main case is Securities Investor Protection Corp. v.
Bernard L. Madoff Investment Securities LLC, 08-ap-1789, U.S.
Bankruptcy Court, Southern District of New York (Manhattan).
Alcoa Accused of Bribing Alba Officials in Aluminum Scheme
Alcoa Inc. (AA) was accused of using a middleman to bribe
officials at Bahrain’s state-owned aluminum producer to reap
more than $400 million in illegal profit, according to new
claims filed in a racketeering lawsuit.
Alcoa, the largest U.S. aluminum producer, made tens of
millions of dollars in illegal payments through an intermediary
to an official at Aluminium Bahrain BSC, known as Alba, and the
government of Bahrain, according to papers filed Dec. 28 in
federal court in Pittsburgh. The company also paid more than $5
million in bribes to former Alba Chief Executive Officer Bruce
Hall, according to the filing.
Alba sued Alcoa in February 2008 claiming the New York-
based company caused it to pay inflated prices for alumina, the
principal raw material in aluminum. The case was closed after
the U.S. Justice Department said it was investigating whether
Alcoa made corrupt payments in Bahrain. It was reopened in
November after a judge ruled that Alba could file an amended
complaint and a statement laying out its racketeering case.
Mike Belwood, a spokesman for Alcoa, said the claims in
Alba’s case are “not supported by the facts.”
“Alba’s statement is yet another recitation of the alleged
misdeed of Victor Dahdaleh and Bahraini officials in an attempt
to try and construct a claim and survive Alcoa’s upcoming motion
to dismiss.”
Alcoa asked to reopen the case in November and sought
permission to file a motion seeking its dismissal because
racketeering law “does not apply to the extraterritorial
conduct,” alleged by Alba, according to court papers.
Hall couldn’t immediately be reached for comment on the
filing.
The case is Aluminium Bahrain BSC (ALBH) v. Alcoa Inc., 08-
cv-00299, U.S. District Court, Western District of Pennsylvania
(Pittsburgh).
For more, click here.
For the latest lawsuits news, click here.For the latest trial
and appeals news, click here.
Verdicts/Settlements
GE Healthcare Pays $30 Million to Settle Medicare Fraud Case
General Electric Co. (GE)’s health-care unit will pay more than
$30 million to settle claims that a company it bought in 2004
provided false information to Medicare to pad billings for a
drug used to diagnose heart disease, the U.S. Justice Department
said.
The fraud settlement announced Jan. 29 involving the drug
Myoview sold by Amersham Health Inc. resolves claims filed under
the False Claims Act. The law allows whistle-blowers to pursue
fraud claims on behalf of the federal government and then share
in any recovery.
“It’s important for drug manufacturers to provide accurate
pricing information to Medicare so that taxpayers aren’t
overcharged for medicines purchased with their dollars,”
Assistant Attorney General Tony West, who heads the department’s
civil division, said in a statement.
The Justice Department has recovered more than $8.7 billion
under the False Claims Act since January 2009, the largest-ever
three-year total, West said at a Dec. 19 briefing for reporters.
James Wagel, the whistle-blower in the suit against GE
Healthcare Inc., will receive $5.1 million from the government’s
recovery.
“GE Healthcare is pleased to have reached a resolution in
this long-standing case,” said Aleisia Gibson, a company
spokeswoman.
Dupree Is Convicted in $21 Million New York Bank-Fraud Case
A Wharton business school graduate and former University of
North Carolina basketball player who ran a New York holding
company was convicted by a jury in a $21 million bank-fraud
case.
Courtney Dupree was found guilty Dec. 30 in federal court
in Brooklyn, New York. He was accused of lying about receivables
to New York-based Amalgamated Bank to get and maintain the
credit line for his Long Island City-based holding company GDC
Acquisitions LLC, which owned lighting and furniture dealers.
The trial began Dec. 6. Amalgamated realized $16 million in
losses because of the crime, according to the government. Dupree
was chief executive officer of GDC.
“This is a case about lying to a bank to get money,”
Assistant U.S. Attorney David Woll told jurors during the trial.
“It is about telling lies over and over again in order to grab
millions of dollars of the bank’s money.”
Thomas Foley, a lawyer in Hoboken, New Jersey, who was the
company’s outside counsel until he became its chief operating
officer, was acquitted Dec. 30 of conspiracy, bank fraud and
making a false statement.
Dupree was found guilty on four counts including conspiracy
to commit bank fraud, bank fraud and two counts of making a
false statement.
The case is U.S. v. Dupree, 10-cr-627, U.S. District Court,
Eastern District of New York (Brooklyn).
For the latest verdict and settlement news, click here.
Litigation Departments
NFL’s Kyle Orton Sues Chicago Law Firm Over Investment Advice
Kyle Orton, the National Football League player, sued a
Chicago law firm alleging he and other investors suffered
millions of dollars from partnerships that failed to provide
anticipated tax benefits.
Orton, in a complaint filed Dec. 29 in state court in
Chicago, accuses Chuhak Tecson PC of misrepresentation and
negligence over advice on investments in oil and gas
partnerships that were designed to grant tax credits. He and a
co-plaintiff seek to represent other investors in a class-action
lawsuit.
The firm didn’t warn Orton and other investors that there
was a possibility they wouldn’t receive the anticipated tax
credits because the partnerships, set up to sell biomass gas
from landfills to generate electricity, didn’t meet the
statutory requirements for the credits.
Andrew Tecson, president of Chuhak Tecson, didn’t return
an e-mail and call seeking comment on the lawsuit.
Orton, 29, has started the past two games for Kansas City
after being claimed by the Chiefs off waivers on Nov. 23. The
quarterback began the season with Denver, then was replaced by
Tim Tebow as the Broncos’ starter.
The case is Orton v. Chuhak Tecson, 11CH44662, Cook
County Circuit Court (Chicago).
German Corruption Lawyer Rejoins Prosecutor
Wolfgang Schaupensteiner will return to the Frankfurt
prosecutor’s office in April after leaving in 2007 to work as an
anti-corruption officer for Deutsche Bahn AG, Financial Times
Deutschland said, citing him.
There are no positions free in the anti-corruption
department and the prosecutor’s office doesn’t yet know which
job it will give Schaupensteiner, the German newspaper reported,
citing an unidentified spokeswoman for the office.
As a prosecutor, Schaupensteiner exposed “millions” of
euros of bribes related to the construction of Frankfurt
airport’s second terminal in the 1990s and conducted 15
corruption cases with 200 defendants against Deutsche Bahn,
according to the newspaper.
For the latest litigation department news, click here.
Court Filings
Exelon Settlement with Government Most Popular on Bloomberg
The Exelon Corp. (EXC) settlement with the U.S. Justice
Department over its acquisition of Constellation Energy Group
Inc. (CEG), was the most-read litigation docket on the Bloomberg Law
system last week.
The U.S. Justice Department agreed to let Exelon carry out
the $7.9 billion acquisition on condition that the company sell
three electricity-generating plants in Maryland.
The department announced the agreement Dec. 21, shortly
after it filed a lawsuit in U.S. District Court in Washington
alleging the takeover would eliminate competition and lead to an
increase in wholesale electricity prices for consumers in Mid-
Atlantic states.
The case is U.S. v. Exelon Corp., 11-cv-02276, U.S.
District Court, District of Columbia (Washington).
For more, click here.
To contact the reporter on this story:
Elizabeth Amon in Brooklyn, New York, at
eamon2@bloomberg.net.
To contact the editor responsible for this story:
Michael Hytha at
mhytha@bloomberg.net.
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Article source: http://www.bloomberg.com/news/2012-01-03/credit-suisse-madoff-alcoa-ge-exelon-in-court-news.html
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