Tag: insider

How did identity thieves get passport data? From passport agency contractor!

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Three women from Houston, Texas, stand accused of engaging in an identity theft scheme in which one of them, a contract employee of the Department of State Passport Agency, was in charge of stealing personally identifiable information of persons applying for a passport.

The information was then used to create counterfeit identification documents, which the other two women would use to successfully impersonate the affected individuals in order to fraudulently obtain commercial lines of credit and to purchase iPhones, iPads and other electronic merchandise.

This scheme went on for over five years.

There are no more details about how Chloe McClendon, the Passport Agency contractor, exfiltrated the personal data in question, but according to The Washington Post, the US Passport Agency has decided last month to ban both federal employees and private contractors from bringing devices equipped with a camera into the offices where they review and process requests for passports…

Technically, banning devices with cameras won’t stop determined insiders from stealing information.

No surprise. The majority of cases like this stem from a disgruntled employee or a plant.

Another problem in this particular case might be cost cutting. According to Rob Arnold, in the last few years the Passport Agency has been employing contractors to do jobs that used to be higher responsibility government posts.

Life with beancounters in charge of Congress produces exactly the most predictable result.

Guilty on all counts in insider-trading case

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Daylife/Reuters Pictures used by permission

Raj Rajaratnam, the hedge-fund tycoon and Galleon Group co-founder at the center of a U.S. insider-trading crackdown, was found guilty of all 14 counts against him in the largest illegal stock-tipping case in a generation.

A jury of eight women and four men in Manhattan returned its verdict today after hearing evidence that Rajaratnam, 53, engaged in a seven-year conspiracy to trade on inside information from corporate executives, bankers, consultants, traders and directors of public companies including Goldman Sachs Group. He gained $63.8 million, prosecutors said.

The trial came as Manhattan U.S. Attorney Preet Bharara promised to crack down on “rampant” illegal trading on Wall Street. Rajaratnam was convicted on five counts of conspiracy and nine counts of securities fraud. Prosecutors today said he faces 15 1/2 years to 19 1/2 years in prison at his July 29 sentencing.

“Rajaratnam, once a high-flying billionaire and hedge fund manager, is now a convicted felon, 14 times over,” Bharara said in a statement after the verdict. “Rajaratnam was among the best and the brightest — one of the most educated, successful and privileged professionals in the country. Yet, like so many others recently, he let greed and corruption cause his undoing…”

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Nvidia contractor charged with selling data to hedge funds

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U.S. prosecutors in Manhattan filed new charges as part of a national probe of insider trading, accusing a California consultant for an expert-networking firm with selling inside information to two unidentified hedge funds.

Winifred Jiau, arrested in Fremont, was accused of selling data on Nvidia Corp. and Marvell Technology Group Ltd., makers of computer components, through the networking firm, according to a filing today in Manhattan federal court. The hedge funds paid her $200,000 through the firm, prosecutors alleged…

The evidence against Jiau is “strong,” Assistant U.S. Attorney Wilson Leung told the judge, adding that there is a “cooperating witness and audio recordings.” When asked by Vadas if she understood the charges, Jiau said “I not have a chance to know until now.” Barry Portman, her assigned public defender, said the complaint is a “lengthy document.” She didn’t enter a plea to the charges.

Her arrest follows charges earlier this month against three technology company workers who allegedly sold secrets about Apple Inc., Dell Inc. and Advanced Micro Devices Inc. The men, who worked at AMD, Flextronics International Ltd. and Taiwan Semiconductor Manufacturing Co., were arrested on securities fraud and conspiracy charges for a scheme that Manhattan U.S. Attorney Preet Bharara said operated from 2008 to early 2010.

Also arrested at the time was James Fleishman, a sales manager at Primary Global Research LLC, the expert-networking firm where the three worked as consultants. If convicted, all four face as long as 20 years in prison…

Santa Clara, California-based Marvell, which makes chips for the BlackBerry phone, declined to comment. Bob Sherbin, a spokesman for Nvidia, also based in Santa Clara, said Jiau was a contractor who left the company about a year ago…

It grows deeper and deeper.

If this keeps up, we may even experience a shock epidemic of honesty in business.

FBI arrests at tech firms for insider trading

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U.S. Attorney Preet Bahrara

Four people who worked at technology companies were arrested by agents of the Federal Bureau of Investigation as part of a long-term insider trading probe. A fifth person has pleaded guilty.

James Fleishman, an executive for Primary Global Research, an expert-networking firm, was arrested this morning on charges of wire fraud and conspiracy for allegedly trying to give non- public information to the firm’s clients, including hedge funds, according to a statement by U.S. Attorney Preet Bharara in Manhattan.

Also arrested were Mark Anthony Longoria, who worked at Advanced Micro Devices Inc.; Walter Shimoon, who worked at Flextronics International Ltd.; and Manosha Karunatilaka, who was employed at Taiwan Semiconductor Manufacturing Co., on charges of wire fraud and conspiracy to commit securities fraud and wire fraud, the statement said. The charges were unsealed today in Manhattan federal court.

“A corrupt network of insiders at some of the world’s leading technology companies served as so-called consultants who sold out their employers by stealing and then peddling their valuable inside information,” said Bharara in a statement.

A fifth man, Daniel DeVore, formerly a supply manager at Dell Inc., was arrested in the same probe and pleaded guilty Dec. 10 to wire fraud and conspiracy to commit securities and wire fraud, according to the statement.

Hey, look! The SEC is actually out on the streets doing what they get paid for.

Billionaire head of hedge fund arrested for fraud, insider trading

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Daylife/Reuters Pictures used by permission

By all appearances, Raj Rajaratnam was a self-made billionaire, having built Galleon Group into a giant hedge fund with a specialty in technology companies.

But prosecutors said on Friday that he had profited not from his trading genius but from his Rolodex, and they arrested him on charges of conspiracy and securities fraud in what they called the biggest insider trading scheme ever involving a hedge fund.

In all, six people were arrested, accused by prosecutors and the Securities and Exchange Commission of earning more than $20 million from illegal trading in companies like Google, Akamai and Hilton Hotels over nearly three years.

Mr. Rajaratnam is accused of tapping a vast network of informants across a swath of corporate America: a senior official at I.B.M. considered a contender for the top job at that firm; executives of Intel and the consulting firm McKinsey & Company; two former Bear Stearns employees who had moved to a hedge fund, New Castle Partners; and an analyst at Moody’s Investors Service.

While trading secrets, though, one crucial piece of information was not shared — several of the phones were tapped.

The wiretaps were made with the help of an unnamed cooperating witness, a former Galleon employee who was said to ply Mr. Rajaratnam with information originally to land a job. The witness, who began cooperating in November 2007, has agreed to plead guilty in the hopes of receiving a lesser sentence.

“This case should serve as a wake-up call for Wall Street,” Preet Bharara, the United States attorney for the Southern District of New York, said at a news conference on Friday. He added that the investigation was continuing.

Wake-up call my Sweet Aunt Josephine’s rosy cheeks! RTFA. It’s like cleaning out the White House and leaving behind a thoroughly corrupt Congress.

The SEC was pressed into dumping a few bad apples like Madoff – and now Rajaratnam – who sit in the midst of a network of corruption and deceit that remains without thoroughgoing regulation or oversight.

Chief thug at Countrywide Financial charged with fraud

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Daylife/Reuters Pictures used by permission

One of America’s top mortgage tycoons, Angelo Mozilo, has been charged with fraud and insider dealing for allegedly lying to investors about a toxic build-up of billions of dollars in reckless loans at his Countrywide Financial homeloans empire.

The Securities and Exchange Commission launched a civil prosecution against Mozilo for making $140m in profit by selling Countrywide stock in 2006 and 2007 while concealing a looming deterioration in the business’s prospects from shareholders.

At the peak of America’s property boom, Countrywide was the nation’s biggest mortgage provider, servicing one in seven US homeloans. But the firm suffered catastrophic losses in the credit crunch and was rescued from possible bankruptcy by Bank of America last year…

“Countrywide portrayed itself as underwriting mainly prime quality mortgages using high underwriting standards,” said Robert Khuzami. “But concealed from shareholders was the true Countrywide, an increasingly reckless lender assuming greater and greater risk…”

The charges are the most prominent government prosecution to date arising from America’s meltdown in sub-prime mortgages. Mozilo has been widely vilified as the “sub-prime king”, accused by unions and politicians of exploiting customers with predatory mortgages. Charles Schumer, a prominent Democratic senator for New York, recently suggested that Mozilo should be “boiled in oil – figuratively”.

I wouldn’t suggest anything as mean as boiling in oil. Now, the guillotine – that’s a different story.

As good a time as any to reiterate what I saw leading up to this meltdown. State and federal governments abdicated their responsibility for oversight – allowing unlicensed, unregulated mortgages to be sold from storefronts.

Yes, the big banks and financial firms jumped on top of sub-prime mortgages with their own special greed; but, none of this could have happened without the collusion of sleazy politicians at every level of American governance.