Neil Barofsky, the special inspector-general assigned to oversee the deployment of TARP funds, will begin to investigate more forcefully whether banks manipulated their books to receive more government assistance. Barofsky told the Financial Times, “I hope we don’t find a single bank that’s cooked their books to try to get money but I don’t think that’s going to be the case.” At a congressional hearing earlier this month, Barofsky said that his office was involved in up to a dozen investigations into potential wrongdoing. He told the Financial Times that the system for deploying bailout funds was easily manipulated. “Indictments can serve as great deterrents,” he said. (Financial Times)
Deputy U.S. Marshall John Ambrose will be tried for allegedly informing Chicago mobsters about the information that one of their members provided to prosecutors. Ambrose is accused with stealing information related to Nicholas Calabrese, a key witness in Chicago’s 2007 “Family Secrets” trial targeting top mob officials, and giving the information to John “No Nose” DiFronzo, a reported mob boss. Chicago mob expert John Binder said that the police department will “see this as the worst sort of treachery.” If convicted, Ambrose will face years in prison. (AP)
Victims of Bernard Madoff’s multi-billion dollar Ponzi scheme can seek repayment by pushing Madoff into bankruptcy, a federal judge ruled Friday. In his opinion, judge Louis Stanton said that the U.S. bankruptcy code is the best way to approach the claims on Madoff’s assets. Using the bankruptcy code, he wrote, would help “avoid fraudulent transfers and preserve or increase the value of the assets through investment or sale.” Federal prosecutors, the SEC and the trustee assigned to liquidate Madoff’s estate have all opposed the bankruptcy option, saying that it will only confuse the case against Madoff. (Reuters)
A federal judge ordered the U.S. government to pay $600,000 in fines after federal prosecutors employed a “win-at-all-cost” strategy to investigate a doctor in south Florida. Judge Alan Gold said that after prosecutors charged Dr. Ali Shaygan with 141 counts of illegally prescribing painkillers, they took the prosecution too far by asking key witnesses to record phone conversations with Shaygan’s lawyers and concealing evidence of the recordings. In the harshly worded ruling finding Shaygan not guilty on all counts, Gold called the prosecution’s actions “profoundly disturbing”. (LA Times)
Many legal U.S. citizens are locked up with people suspected of immigrating illegally, an AP report released recently found. The report investigated 55 cases in which citizens were detained for periods ranging from one day to five years. Though it is illegal to detain U.S. citizens for immigration violations, a former immigration enforcement official said that citizens are often arrested because the agency is overwhelmed. The nonprofit Vera Institute for Justice found that 322 people with citizenship claims were arrested in 2007, more than double the number from the year before. (AP)
The most recent election fraud scheme in Kentucky points up a larger problem in the county’s economic distress, the AP reports. Some attribute the rise in public corruption with the county’s 14.3 percent unemployment rate and a culture in which officials will seek funds at any cost. In late March, eight Clay County officials were charged with rigging an election, and acting as political bosses to appoint friends to election positions and bribe citizens to vote in their favor. A 60 year-old disabled coal miner told the AP that “politics in Clay County have been crookeder than a barrel of fish hooks.” (AP)
