OCC Issues Notice of Charges Against Five Former Senior Wells Fargo Bank Executives, Announces Settlement With Others

News Release 2020-6 | January 23, 2020

WASHINGTON – The Office of the Comptroller of the Currency (OCC) today issued a notice of charges against five former senior executives of Wells Fargo Bank, N.A., Sioux Falls, South Dakota, and announced settlements with the bank’s former Chief Executive Officer (CEO) and other members of the bank’s operating committee.

“The actions announced by the OCC today reinforce the agency’s expectations that management and employees of national banks and federal savings associations provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations,” stated Comptroller of the Currency Joseph Otting.

The charges stem from the executives’ role in the bank’s systemic sales practices misconduct. The executives and relief sought include:

The notice of charges alleges these executives failed to adequately perform their duties and responsibilities, which contributed to the bank’s systemic problems with sales practices misconduct from 2002 until October 2016. The misconduct of these individuals allowed the practices to continue for years, affecting millions of bank customers and thousands of lower level bank employees. Additionally, the notice states that Ms. Russ Anderson also made false and misleading statements to the OCC and actively obstructed the OCC’s examinations of the bank’s sales practices.

Based on the facts and circumstances of each individual’s actions, the relief sought may include a lifetime prohibition from participating in the banking industry, a personal cease and desist order, and/or CMP. A personal cease and desist order would require the individual to take certain affirmative actions or refrain from certain conduct in any future involvement in the banking industry. Pursuant to federal law, the respondents may request a hearing challenging the allegations and relief sought by the OCC.

The OCC also announced today the issuance by consent of a prohibition order and a $17,500,000 CMP against former bank Chairman and CEO John Stumpf; a personal cease and desist order and a $2,250,000 CMP against the bank’s former Chief Administrative Officer and Director of Corporate Human Resources Hope Hardison; and a personal cease and desist order and assessment of a $1,250,000 CMP against its former Chief Risk Officer Michael Loughlin for their roles in the bank’s sales practices misconduct.

In making the determination to file the notice of charges and enter into these settlements, the OCC considered, among other things, the culpability of these individuals and their financial resources, including compensation previously clawed back by the bank.

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Treasury Targets International Network Supporting Iran’s Petrochemical and Petroleum Industries

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against four international petrochemical and petroleum companies that have collectively transferred the equivalent of hundreds of millions of dollars’ worth of exports from the National Iranian Oil Company (NIOC), an entity instrumental in Iran’s petroleum and petrochemical industries, which helps to finance Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and its terrorist proxies. Iran’s petroleum and petrochemical industries are major sources of revenue for the Iranian regime and funds its malign activities throughout the Middle East. The entities targeted today facilitate Iran’s petrochemical and petroleum exports in contravention of U.S. economic sanctions.

“Iran’s petrochemical and petroleum sectors are primary sources of funding for the Iranian regime’s global terrorist activities and enable its persistent use of violence against its own people,” said Secretary Steven T. Mnuchin.

Today’s action follows on the heels of similar actions that have targeted key sources of funding for Iranian regional adventurism, including a recent action targeting the Iranian metals sector. Also, in June 2019, OFAC designated Iran’s largest petrochemical holding group, Persian Gulf Petrochemical Industries Company (PGPIC), for providing financial support to U.S.-designated Khatam al-Anbya Construction Headquarters, the engineering conglomerate of the Islamic Revolutionary Guard Corps (IRGC).  In addition to PGPIC, OFAC designated PGPIC’s vast network of 39 subsidiary petrochemical companies and foreign-based sales agents.  

Today’s action targets Triliance Petrochemical Co. Ltd. (Triliance), a Hong Kong-based broker with branches in Iran, United Arab Emirates, China, and Germany. 

In 2019, Triliance ordered the transfer of the equivalent of millions of dollars to NIOC as payment for Iranian petrochemicals, crude oil, and petroleum products shipped to the United Arab Emirates and China after the expiration of any applicable significant reduction exceptions.  In facilitating these shipments, Triliance worked to conceal the Iranian origin of these products.  Triliance has also facilitated the sale of millions of dollars’ worth of petroleum products involving Naftiran Intertrade Company, a subsidiary of NIOC, to companies in China. 

Additionally, Triliance Kish Petrochemical Company, which is the Iran-based branch of Triliance, recently changed its name and operates as Tiba Parsian Kish Petrochemical.  

Similarly, in 2019, Hong Kong-based Sage Energy HK Limited (Sage Energy) and Shanghai-based Peakview Industry Co. Limited (Peakview) each ordered the transfer of the equivalent of millions of dollars to NIOC for exports after the expiration of any applicable significant reduction exceptions. 

In 2019, Dubai-based Beneathco DMCC also ordered the transfer of the equivalent of several million dollars to NIOC.  In late 2018, Beneathco DMCC offered to assist NIOC in hiding the origin of Iranian products destined for the United Arab Emirates.

Triliance, Sage Energy, Peakview, and Beneathco DMCC are all designated pursuant to E.O 13846 for on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, NIOC, a person included on the List of Specially Designated Nationals and Blocked Persons whose property and interests in property are blocked pursuant to E.O. 13599.

Concurrently with the U.S. Department of Treasury’s designations, the U.S. Department of State designated several companies and senior executives pursuant to E.O. 13846 in connection with significant transactions for the transport of petrochemical products from Iran, on or after November 5, 2018.

Sanctions Implications 

All property and interests in property of these persons designated today subject to U.S. jurisdiction are blocked, and U.S persons are generally prohibited from engaging in transactions with them.  In addition, foreign financial institutions that knowingly facilitate significant transactions for, or persons that provide material or certain other support to, the persons designated today risk exposure to sanctions that could sever their access to the U.S. financial system or block their property and interests in property under U.S. jurisdiction.

For identifying information on the individuals and entities listed today.

 

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New FTC Data Shows that the FTC Received Nearly 1.7 Million Fraud Reports, and FTC Lawsuits Returned $232 Million to Consumers in 2019

New data released by the Federal Trade Commission shows that FTC actions led to more than $232 million in refunds to consumers across the country in 2019.

A core part of the FTC’s mission is to return money to consumers who are harmed by illegal business practices. Over the last four years, consumers have cashed more than $1 billion in FTC refund checks.

In addition to refunds, the newly released data also shows that the FTC received 3.2 million reports to its Consumer Sentinel Network in 2019. Reports from around the country about consumer protection issues are a key resource for FTC investigations that stop illegal activities and, when possible, provide refunds to consumers.

The most common type of fraud reported to the FTC in 2019 was imposter scams; government imposter scams, in particular, were the most frequently reported, and up more than 50 percent since 2018. Of all reports received, the top categories were identity theft, imposter scams, telephone and mobile services, online shopping, and credit bureaus.

Consumer Sentinel Infographic: there were 3.2 million reports in 2019 in which consumers reported losing more than $1.9 billion to fraud.

Refunds to Consumers

The FTC Act allows the FTC to seek refunds from companies whose actions harm consumers.

During 2019, more than 1.9 million consumers cashed FTC checks received as a result of law enforcement cases. When consumers don’t cash their refund checks, the FTC uses that money to send additional mailings to ensure the maximum amount of money is returned to consumers. Any remaining refund money is sent to the U.S. Treasury.  

For the first time, data about the FTC’s refund program will be available online in an interactive dashboard, including state-by-state and case-by-case breakdowns of the amount refunded to consumers. The dashboard is available at ftc.gov/exploredata.

 

Consumer Sentinel Network

Consumer Sentinel Infographic: there were 3.2 million reports in 2019 in which consumers reported losing more than $1.9 billion to fraud.

The FTC’s Consumer Sentinel Network is a database that receives reports directly from consumers, as well as from federal, state, and local law enforcement agencies and a number of private partners. The network received 3.2 million reports in 2019, including nearly 1.7 million fraud reports as well as identity theft and other reports.

Consumers reported losing more than $1.9 billion to fraud in 2019, with nearly $667 million lost to imposter scams alone. While scammers target consumers using every possible method of communication, phone calls were the most common. A small percentage of consumers who reported they encountered a fraud over the phone said they actually lost money. When they did, the median individual loss was more than $1,000.

The FTC uses the reports it receives through the Sentinel network as the starting point for most of its law enforcement investigations, and the agency also shares these reports with more than 2,500 law enforcement users around the country. While the FTC does not respond to individual complaints, Sentinel reports are a vital part of the agency’s law enforcement mission.

Global tax chiefs undertake unprecedented multi-country day of action to tackle international tax evasion

IR-2020-18, January 23, 2020

WASHINGTON — A globally coordinated day of action to put a stop to the suspected facilitation of offshore tax evasion has been undertaken this week across the United Kingdom (UK), United States (US), Canada, Australia and the Netherlands.

The action occurred as part of a series of investigations in multiple countries into an international financial institution located in Central America, whose products and services are believed to be facilitating money laundering and tax evasion for customers across the globe.

It is believed that through this institution a number of clients may be using a sophisticated system to conceal and transfer wealth anonymously to evade their tax obligations and launder the proceeds of crime.

The coordinated day of action involved evidence, intelligence and information collection activities such as search warrants, interviews and subpoenas. Significant information was obtained as a result and investigations are ongoing. It is expected that further criminal, civil and regulatory action will arise from these actions in each country.

This is the first major operational activity for the Joint Chiefs of Global Tax Enforcement, known as the J5, formed in mid-2018 to lead the fight against international tax crime and money laundering. This group brings together leaders of tax enforcement authorities from Australia, Canada, the UK, US and the Netherlands.

“This is the first coordinated set of enforcement actions undertaken on a global scale by the J5 – the first of many,” said Don Fort, US Chief, Internal Revenue Service Criminal Investigation.

“Working with the J5 countries who all have the same goal, we are able to broaden our reach, speed up our investigations and have an exponentially larger impact on global tax administration. Tax cheats in the US and abroad should be on notice that their days of non-compliance are over,” Fort said.

Australian Tax Office (ATO) Deputy Commissioner and Australia’s J5 Chief, Will Day, said that this operation shows that the collaboration between the J5 countries is working. “Today’s action shows the power of our combined efforts in tackling global tax crime, fraud and evasion.”

“This multi-agency, multi-country activity should degrade the confidence of anyone who was considering an offshore location as a way to evade tax or launder the proceeds of crime.”

The ATO has commenced investigations into Australian based clients of this institution who are suspected to have undeclared income. The Australian Criminal Intelligence Commission (ACIC) is playing a supportive intelligence role, and investigations into more clients may follow.

“Never before have criminals been at such risk of being detected as they are now. Our increased collaboration, data analytics and intelligence sharing mean there is no place worldwide you can hide your money to avoid contributing your obligations,” Day said.

Hans van der Vlist, Chief and General Director Fiscal Information and Investigation Service (FIOD), the Netherlands, said, “This is the first outcome of an operational collaboration between five countries on tackling professional enablers that facilitate offshore tax crime.

The international investigation started on information obtained by the Netherlands. By sharing this information and working together an international impact is created. Together as the J5 we will try to close the net on tax criminals.”

Canada Revenue Agency (CRA) Chief Eric Ferron said, “I am very pleased with the role the CRA is playing in what will be the first of many major operational activities for the J5. This coordinated operation shows that the collaboration between J5 countries is working. Tax evaders beware; today’s action shows that through our combined efforts we are making it increasingly difficult for taxpayers to hide their money and avoid paying their fair share.”

Simon York, Chief and Director of Her Majesty’s Revenue and Customs (HMRC)’s Fraud Investigation Service said, “Tax evasion is a global problem that needs a global response and that is what the J5 provides. This kind of international action shows that we can, and we will take on the most collaboration underlines our commitment to tackling these harmful, sophisticated and complex crimes and that we are committed to levelling the playing field for honest businesses and taxpayers.

“International tax evasion robs our public services of vital funds, undermines economies and, left unchecked, can enrich the dishonest at the expense of the honest majority.

Working together, HMRC and our J5 partners are closing the net on tax criminals, wherever they are, to ensure nobody is beyond our reach. The message to them is clear – the J5 are closing in.”

For more information about J5, please visit www.irs.gov/J5.

FTC Seeks Public Comment on Par Petroleum Corp.’s Application to Modify Agreement to Store Petroleum Products at Barbers Point Terminal in Hawaii

The Federal Trade Commission is currently accepting public comments on an application by Par Petroleum Corp. to modify the Amended Honolulu Terminal Agreement. Prior approval of the modification to the agreement is required under the FTC’s May 15, 2015 final order settling charges that Par’s $107 million acquisition of Koko’oha Investments, Inc.’s wholly-owned subsidiary Mid Pac Petroleum, LLC would likely be anticompetitive.

The Amended Honolulu Terminal Agreement between Par and Aloha Petroleum, Ltd restricts Par’s storage of petroleum products at Aloha’s Barbers Point Terminal. The FTC’s order sought to preserve the flexibility of importing Hawaii-grade gasoline blendstock, known as HIBOB.

According to Par’s application, Par’s competitor has shut down its refinery in Hawaii, and Par does not produce enough gasoline to meet demand in Hawaii. Par seeks to modify the Amended Honolulu Terminal Agreement to import and store HIBOB at Aloha’s Barbers Point Terminal.

The Commission will decide whether to approve the application after a 30-day public comment period, which expires on Feb. 24, 2020. Comments can be filed electronically through Regulations.gov, or sent to: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about how competition benefits consumers or file an antitrust complaint. Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

IRS: Don’t be victim to “ghost” tax return preparers

IR-2020-17, January 22, 2020

WASHINGTON — With the start of the 2020 tax filing season near, the Internal Revenue Service is reminding taxpayers to avoid unethical “ghost” tax return preparers.

According to the IRS, a ghost preparer does not sign a tax return they prepare. Unscrupulous ghost preparers will print the return and tell the taxpayer to sign and mail it to the IRS. For e-filed returns, the ghost will prepare but refuse to digitally sign as the paid preparer.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number, or PTIN. Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a fast buck by promising a big refund or charging fees based on the size of the refund.

Ghost tax return preparers may also:

  • Require payment in cash only and not provide a receipt.
  • Invent income to qualify their clients for tax credits.
  • Claim fake deductions to boost the size of the refund.
  • Direct refunds into their bank account, not the taxpayer’s account.

The IRS urges taxpayers to choose a tax return preparer wisely. The Choosing a Tax Professional page on IRS.gov has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification.

Free basic income tax return preparation with e-file is available to qualified individuals from IRS-certified volunteers at Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites across the country. For more information and to find the closest visit Free Tax Return Preparation for Qualifying Taxpayers on IRS.gov

No matter who prepares the return, the IRS urges taxpayers to review it carefully and ask questions about anything not clear before signing. Taxpayers should verify both their routing and bank account number on the completed tax return for any direct deposit refund. And taxpayers should watch out for ghost preparers inserting their bank account information onto the returns.

Taxpayers can report preparer misconduct to the IRS using IRS Form 14157, Complaint: Tax Return Preparer (PDF). If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit (PDF).

Peloton Interactive, Inc. Announces Second Quarter Fiscal 2020 Earnings Release Date, Conference Call and Webcast

NEW YORK, Jan. 21, 2020 (GLOBE NEWSWIRE) — Peloton Interactive, Inc. (Nasdaq: PTON) will release its second quarter fiscal 2020 results after the U.S. stock market closes on Wednesday, February 5, 2020. The Company will also hold a conference call to discuss results at 5:00 p.m. (Eastern Time) that day.

The U.S. toll free dial-in for the conference call is 1-877-667-0469 and the international dial-in number is 1-346-406-0807. The Conference ID is 8043337. A live webcast of the conference call will also be available on the investor relations page of the company’s website at https://investor.onepeloton.com.

For those unable to participate in the conference call, a replay will be available after the conclusion of the call on February 5, 2020 through February 12, 2020. The U.S. toll-free replay dial-in number is 1-855-859-2056, and the international replay dial-in number is 1-404-537-3406. The replay passcode is 8043337.

About Peloton

Peloton is the largest interactive fitness platform in the world with a loyal community of over 1.6 million Members. The company pioneered connected, technology-enabled fitness, and the streaming of immersive, instructor-led boutique classes for its Members anytime, anywhere. We make fitness entertaining, approachable, effective, and convenient, while fostering social connections that encourage our Members to be the best versions of themselves. An innovation company at the nexus of fitness, technology, and media, Peloton has reinvented the fitness industry, creating a product that its Members love. The brand’s immersive content is accessible through the Peloton Bike, Peloton Tread, and Peloton App, which provides a full slate of fitness offerings, anytime, anywhere, through iOS and Android as well as most tablets and computers.

Founded in 2012 and headquartered in New York City, Peloton has a growing number of retail showrooms across the US, UK, Canada and Germany. For more information, visit www.onepeloton.com.

Investor Relations Contact:
Peter Stabler, ICR
[email protected] 

Source: Peloton Interactive

OCC Fines Citibank More Than $17 Million for Violating the Flood Disaster Protection Act

News Release 2020-5 | January 21, 2020

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today announced a $17,998,510 civil money penalty against Citibank, N.A, of Sioux Falls, South Dakota, for violating the Flood Disaster Protection Act of 1973 (FDPA) and its implementing regulations.

The OCC found the bank engaged in a pattern or practice of violating 42 U.S.C. § 4012a(e) and 12 C.F.R. § 22.7(a). Specifically, the bank failed to purchase regulatory required flood insurance on behalf of borrowers with loans secured by buildings and mobile homes located in special flood hazard areas where flood insurance is available in a timely manner. The failure to purchase the required flood insurance in a timely manner resulted from Citibank’s deficient FDPA policies and procedures, which allowed the bank’s third-party service provider to extend the 45-day notification period after the initial borrower notification.

The bank paid the assessed penalty to the Federal Emergency Management Agency’s National Flood Insurance Program.

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Bryan Hubbard
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United States Government Continues Pressure on Former Maduro Regime

 

Washington – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) identified fifteen aircraft as blocked property of Petroleos de Venezuela, S.A. (PdVSA) pursuant to Executive Order (E.O.) 13884, which blocks the property and interests in property of the Government of Venezuela.  

Several PdVSA aircraft have been used to transport senior members of the former Maduro regime.  In late summer 2019, Venezuelan Oil Minister Manuel Salvador Quevedo Fernandez, who is also a Specially Designated National, attended an OPEC meeting in the United Arab Emirates and utilized the PdVSA aircraft Falcon 200EX (YV3360).  Falcon 200EX (YV3360) also was used throughout 2019 to transport senior members of the former Maduro regime in a continuation of the former Maduro regime’s misappropriation of PdVSA assets.  In 2018, individuals tied to the senior levels of the former Maduro regime traveled aboard PdVSA Dassault Falcon 900EX (YV2486).  

Additionally, several of these aircraft have been operated in an unsafe and unprofessional manner in proximity to U.S. military aircraft, while in international air space.  In the winter of 2019, PdVSA Learjet 45 (YV2734) flew in close proximity to a U.S. military aircraft over the Caribbean Sea.  In the spring of 2019, during a joint operation conducted by PdVSA and the Venezuelan Integrated Air Command, PdVSA’s Learjet 45XR (YV2567) attempted to interfere with a U.S. military aircraft in the northern Caribbean Sea. 

The following aircraft are property in which PdVSA has an interest.

 

  • YV3360, Make & Model: Dassault Falcon 200EX
  • YV2040, Make & Model: Dassault Falcon 900B
  • YV2726, Make & Model: Dassault Falcon 900
  • YV2485, Make & Model: Dassault Falcon 900EX
  • YV2486, Make & Model: Dassault Falcon 900EX
  • YV2565, Make & Model: Bombardier Learjet 45
  • YV2567, Make & Model: Bombardier Learjet 45
  • YV1118, Make & Model: Bombardier Learjet 45
  • YV2734, Make & Model: Bombardier Learjet 45
  • YV2716, Make & Model: Bombardier Learjet 45
  • YV2738, Make & Model: Bombardier Learjet 45
  • YV2739, Make & Model: Bombardier Learjet 45
  • YV2763, Make & Model: Beech 1900D
  • YV2762, Make & Model: Beech 1900D
  • YV2869, Make & Model: Beech 1900D

 

OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons.

Identifying information on the individual and entities identified today.

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Advertising Practices Associate Director Mary K. Engle Leaving the FTC

Federal Trade Commission Chairman Joseph J. Simons announced today that Mary K. Engle, currently the Associate Director of the Division of Advertising Practices, will be retiring from the Commission at the end of this month, after 30 years of service to the Commission and consumers.

“Consumers nationwide have benefited greatly from many important law enforcement actions and policy initiatives that Mary Engle has directed,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Mary has been an ideal colleague and an inspiring supervisor, and all of us who have had the privilege of working with her have benefited from her wisdom, judgment, kindness, and unfailing good humor.”

In 2001, FTC Chairman Timothy J. Muris appointed Engle as the Bureau of Consumer Protection’s Associate Director for the Division of Advertising Practices. As head of that Division for almost 19 years, Engle has overseen the Bureau’s work regarding national advertising policy and law enforcement, including claims made about food, dietary supplements, alcohol, tobacco, and broadband as well as digital technology marketing practices, such as native advertising and influencer marketing.

She has successfully led law enforcement actions of national significance, including POM Wonderful, Braswell, Eli Lilly (the FTC’s first privacy case), and Lord & Taylor (the agency’s first case involving social media influencers). She also spearheaded numerous advertising policy initiatives and ground-breaking studies that have transformed advertising industry practices.

Engle began her FTC career in 1990 as an attorney in the Division of Advertising Practices. She served in a range of other positions during her time with the agency, including Assistant to two Directors of the Bureau of Consumer Protection, Attorney Advisor in the office of Commissioner Roscoe B. Starek, and Assistant Director in both the Enforcement and Advertising Practices Divisions.

She has received numerous awards over the course of her federal government career, including the Meritorious Executive Rank Award from President Obama for sustained superior accomplishment in the management of U.S. government programs in 2012, and the FTC Chairman’s Award for the Commission’s 2000 Media Violence Study and Report.

Engle is a cum laude graduate of Harvard University and received her J.D. from the University of Virginia.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.