The IRS has challenged a set of offshore tax deals set up by the now-infamous AIG Financial Products, according to court records. AIG essentially helped U.S. companies benefit from foreign tax laws for isolated tax payments through offshore banks it owned. Last year, AIG paid $61 million in disputed taxes to the government but now requests a refund, according to the lawsuit. Some of the same companies also made credit default swaps with AIG. IRS Commissioner Douglas Shulman said that the tax transaction “really perverts the foreign tax credit.” (Wall Street Journal)
Bad news for Allen Stanford. The CFO of Stanford Financial Group will cooperate fully in the government’s criminal and civil investigations of Allen Stanford and his company, which have been accused of orchestrating an $8 billion Ponzi scheme. Like Stanford, James M. Davis initially asserted his Fifth Amendment right against self-incrimination. But after Davis agreed to cooperate, his lawyer said that Stanford’s scam “has hurt a lot of good people.” The lawsuit named another Stanford Financial executive, Laura Pendergest-Holt on criminal charges for lying to investigators, but she denies any wrongdoing and has not yet agreed to cooperate with investigators. (Wall Street Journal)
Hiram Monserrate, a Democratic state Senator from New York, was indicted on six counts of domestic abuse including second-degree felony assault and third-degree misdemeanor assault, prosecutors said Monday. The police report alleges that Monserrate cut his girlfriend Karla Giraldo’s face at his home on December 19 because he thought she was having an affair with a police officer. Monserrate took his state Senate seat in January amidst accusations of domestic abuse and requests from women’s rights groups that the criminal case conclude before Monserrate be seated. Both Monserrate and Giraldo said the 25-stitch injury occurred after Monserrate tripped while holding a glass, but the police report cites video surveillance as evidence that the injury stemmed from a heated argument. (Associated Press)
Former Chicago streets and sanitation commissioner Al Sanchez was convicted Monday on four counts of mail fraud. Sanchez engaged in the fraud to cover up the fact that he funneled jobs to Chicago’s Hispanic Democratic Organization. In the trial, former Sanchez aides said that he did not even consider applicants without political connections. Prosecutors said that Sanchez, an ex-aide to former Chicago Mayor Richard Daley, used department jobs “as currency” to build the pro-Daley HDO in return for votes. (Chicago Tribune)
William Brandt, an Illinois-based official with the US Department of Veterans Affairs, pleaded guilty Monday along with his wife and company, Pronto Staffing Inc., to conspiring to commit wire fraud. William and Esperanza Brandt created Pronto in 2000 to link pharmacists to the Outpatient Pharmacy, which sends more than 90,000 prescriptions each day to veterans. As part of the plea agreement, the Brandts said they allowed another company to masquerade as Pronto to profit from small business association benefits for women-owned and minority-owned businesses. William Brandt could serve 25 years in prison and be ordered to pay $500,000 in fines. (USDOJ)
Indiana Judge Douglas Webber ordered Marcus Schrenker to pay more than $500,000 in restitution and state fines related to Schrenker’s attempt to fake his death to dodge criminal fraud investigations. Months before he intentionally crashed his airplane in Florida, Judge Webber revoked Schrenker’s insurance license for scamming investors out of hundreds of thousands of dollars. It seems that this isn’t the end of Schrenker’s legal woes, as he has been indicted for fraud and faces a forthcoming trial.(Associated Press)
