Compliance Insider

Issue 16 > Compliance Alerts

Former medical equipment supplier sentenced for Medicare fraud

The former owner of a medical equipment supply company has been sentenced to 97 months in prison for her role in a scheme that saw US$3.5 million fraudulently claimed from Medicare and Medi-Cal in the United States. California-based Sylvia Walter-Eze committed fraud using her durable medical equipment (DME) supply company Ezcor Medical Supply to bill Medicare and Medi-Cal for unnecessary DME. She also gave illegal kickbacks to patient recruiters in exchange for patient referrals.

Issue 16 > Compliance Alerts

Israeli government overrides antitrust authority

Israeli oil and gas shares have fallen by 3.3 percent following a vote by the cabinet of Israeli Prime Minister Benjamin Netanyahu to override the country’s antitrust authority. The vote to ignore objections by the authority to a contested policy for developing Israel’s largest natural gas field caused the Tel Aviv Oil and Gas Index to experience its most significant fall since February. It also led to thousands of demonstrators taking to the streets of Tel Aviv in protest.

Issue 16 > Compliance Alerts

China state auditor reveals massive bookkeeping hole

China’s state auditor has exposed major irregularities in bookkeeping, including a missing 366.4 billion yuan (US$59 billion) from land sales over the last six years. Commenting on the audit of the central government’s 2014 budget, National Audit Office head Liu Jiayi told lawmakers that the office had investigated more than 2,200 government officials for major fiscal fraud. Among its findings, he said, were millions of yuan spent on expensive alcohol at state-owned firms.

Issue 16 > Compliance Alerts

India cricket head accuses three players of bribery

The former commissioner of the Indian Premier League (IPL) has accused three of its cricket players of accepting bribes from a realty tycoon who is also reportedly a bookmaker. Lalit Modi has said that Baba Diwan provided benefits, such as apartments, to the players from the Chennai Super Kings. Modi claims that he sent a letter to International Cricket Council (ICC) CEO Dave Richardson back in 2013 in which he named Ravindra Jadeja, Suresh Raina and Dwayne Bravo as the three allegedly corrupt players.

Issue 16 > Compliance Alerts

Romanian lawmaker accused of frying pan bribery

A Romania lawmaker is facing a criminal inquiry for allegedly trying to secure the votes of Moldovans for Prime Minister Victor Ponta by bribing them with frying pans. Romania’s anti-graft prosecutors (DNA) announced that they are investigating Sebastian Ghita, who is a close ally of the Prime Minister as well as a lawmaker from the country’s ruling coalition. Ghita has denied any wrongdoing and has accused the prosecutors of abusing their power.

Issue 16 > Compliance Alerts

SEC working with hacked companies on insider trading probe

The United States Securities and Exchange Commission (SEC) has asked at least eight companies for information on their data breaches as it investigates a group of hackers that appear to have infiltrated corporate email threads. The hackers allegedly stole information in the emails, such as details on mergers and acquisitions, in order to gain commercially. The unusual request by the United States securities regulator suggests growing concerns about cyberattacks on United States companies and government agencies.

Issue 16 > Compliance Alerts

Former FIFA VP denies bribery but confirms vote swapping

A former FIFA and Brazilian powerbroker has denied that he took bribes in exchange for voting for Qatar to host the 2022 World Cup, but has admitted to trading votes. Former FIFA vice president Ricardo Teixeira said that Spain and Portugal’s joint bid to host the 2018 World Cup needed votes and so he organised meetings “and got some votes from Asia, thanks to Qatar”. In exchange, Teixeira supported Qatar’s bid for the 2022 tournament. FIFA president Sepp Blatter has previously admitted that some of the bidding process for the 2018 and 2022 World Cups had involved vote trading.

Issue 16 > Compliance Alerts

Italian prosecutors accuse Bank of China of money laundering

Italian prosecutors have alleged that the Milan branch of Bank of China was responsible for a money laundering scheme in which approximately €4.5 billion (US$5.1 billion) was transferred from Italy to China. Prosecutors in Florence want to indict the Chinese bank’s branch and almost 300 people over the scheme, the funds of which they say were earned through prostitution, counterfeiting, tax evasion and labour exploitation. Four of those facing possible prosecution are senior managers with Bank of China, according to Italian news agency ANSA.

Issue 16 > Compliance Alerts

New FIFA voting process will not eliminate corruption risk

Reforms to the way in which FIFA nominates a World Cup host nation will not eliminate the possibility of corruption but will make the process more transparent, according to the official spearheading the changes. Head of FIFA’s independent audit and compliance committee Domenico Scala is overseeing the implementation of changes that will see all 209 member nations openly vote for a tournament host, rather than the current process where the 24-member executive committee votes in a closed ballot.

Issue 16 > Compliance Alerts

KFC China attempts to manage the social media message

United States fast food company Yum! Brands is suing three Chinese firms that used social media to spread rumours that damaged the reputation of its fried chicken restaurant chain KFC. Among the more colourful rumours was one that suggested that KFC chickens were genetically modified to have eight legs and six wings. In a case in Shanghai, Yum! is seeking an apology and 1.5 million yuan (US$248,000) for damages caused. The three Chinese firms are Shanxi Weilukuang Technology, Taiyuan Zero Point Technology and Yingchenanzhi Success and Culture Communication.

Issue 16 > Compliance Alerts

PetroTiger voluntary disclosure leads to another sentenced executive

The former co-chief executive officer of oil and gas services company PetroTiger will be sentenced today after pleading guilty to conspiring to pay bribes to a foreign government official. Joseph Sigelman admitted in the District Court of New Jersey to conspiring with co-CEO Knut Hammarskjold, former general counsel Gregory Weisman and others in violation of the Foreign Corrupt Practices Act (FCPA). Sigelman is the third PetroTiger executive to plead guilty in a case where the company voluntarily disclosed the misconduct and subsequently avoided prosecution.

Issue 16 > Compliance Alerts

Hackers target German Chancellor after parliament breach

Media reports in Germany have stated that malware has been located on the parliamentary-office computer of Chancellor Angela Merkel. A spokesperson for Merkel’s Christian Democrats (CDU) refused to comment on the reports by newspaper Bild am Sonntag, which were not able to confirm whether the malware had successfully managed to compromise any information. The suspected breach follows the recent hacking of the computer system at Germany’s lower house of parliament, also known as the Bundestag.

Issue 16 > Compliance Alerts

Gold refiners urged to examine Ghanaian mines for child labour

Gold sourced from Ghana may have come from unlicensed gold mines that exploit child labour, according to a recent report by Human Rights Watch (HRW). The organisation said that “refiners should take immediate steps to eliminate child labour in their supply chains”. The report estimates that thousands of children, often between the ages of 15 and 17 but sometimes younger, work in hazardous conditions in Ghana’s unlicensed mines. Such conditions often violate Ghanaian and international law, with workers pulling gold ore out of shafts, carrying and crushing the ore, and then processing it with toxic mercury.

Issue 16 > Compliance Alerts

Cybersecurity specialists question government approach to breach notification

Cybersecurity specialists have questioned the wisdom of a decision by the United States Office of Personnel Management (OPM) to notify via email those affected by the recent massive data breach at the agency, which was disclosed last week. The OPM has started contacting the almost four million current and former employees warning them of the additional threats they now face, and will continue to do so until 19 June. However, specialists have warned of the likelihood of victims now being ‘phished’.

Issue 16 > Compliance Alerts

Former Croatian transport minister charged with corruption

A former transport minister in Croatia, together with 12 other people, has been charged with corruption and abusing public funds. Bozidar Kalmeta allegedly headed a scheme to illegally take funds from state road management companies HAC and HC between 2005 and 2010. Croatia’s police anti-corruption unit USKOK alleged that Kalmeta and the others secured up to US$4.47 million from the two companies. Two of the others charged are former senior officials in the companies.

Issue 16 > Compliance Alerts

KPMG role in FIFA scandal questioned

KPMG may have missed all evidence of corruption at FIFA despite assuming the role of external auditor to football’s world governing organisation. The Big Four accounting and consulting firm's Swiss member is not only responsible for auditing FIFA, but also a large sample of member associations around the world that receive annual funding by FIFA. KPMG also prepares a compilation of financial reports at the end of each four-year World Cup cycle.

Issue 16 > Compliance Alerts

First Lady extravagance upsets Nigerian voters

Nigeria’s First Lady has caused controversy by being photographed wearing an expensive watch at her husband’s inauguration. Aisha Buhari was pictured wearing a Cartier Baignoire Folle 18-carat white gold diamond timepiece, which reportedly costs approximately US$50,000, at the inauguration of President Muhammadu Buhari following his election in March. President Buhari has nurtured an image of himself as a ‘man of the people’ in part due to his strong anti-corruption stance, which was a central theme of his election campaign.

Issue 16 > Spotlights

Hotline review case study: BT

As part of our series covering the value of correctly set up and managed compliance hotlines, one aspect of particular importance is the continuous review and improvement of a programme. To provide a client view of the benefits of hotline reviews, Compliance Insider® spoke with BT Group Director of Ethics and Compliance Gareth Tipton about his team’s 2014 review of the company’s hotline programme. Compliance Insider® is very appreciative and would like to thank Gareth for his time and for the openness of his responses.