Two Pennsylvania judges pleaded guilty yesterday to charges of taking kickbacks in exchange for sending juvenile offenders to private detention facilities. Mark Ciavarella and Michael Conahan allegedly took $2.6 million in bribes and may have tainted the convictions of thousands of juvenile offenders. One 17-year-old girl who faced Ciavarella was given three months in a center for making a mock website that made fun of an assistant principal at her school. (Associated Press, New York Times)
On Monday prominent Mississippi attorney Richard Scruggs pleaded guilty to charges of bribery. In the same cause, the Mississippi county circuit judge who was the target of Scruggs’ bribery pleaded not guilty to bribery yesterday, saying that his decisions were not influenced by a promise that former Sen. Trent Lott (R-MS) would help him get appointed to the federal bench. Judge Bobby DeLaughter had presided over a case argued by Scruggs over the awarding of millions of dollars in fees from asbestos litigation. (law.com)
Foundations that invested with Bernard Madoff may face tax fines for exercising poor judgment in handling their money. The fines could be assessed under an obscure law designed by the IRS to penalize foundations for not vetting managers properly, not diversifying prudently, or taking on too much risk that could threaten their survival. The fine would likely apply only to those foundations which invested exclusively with Madoff. (New York Times)
Investigators from three federal agencies are currently investigating a possible fraud in Houston, Texas. Two former brokers filed a wrongful termination suit against Stanford Financial, alleging that the company overstated the asset value of individuals in order to mislead potential investors. The firm has long attracted scrutiny for posting results that were twice the national average. R. Allen Stanford, the head of the company, has denied any wrongdoing. (New York Times)
Britain’s Serious Fraud Office has launched a probe into possible criminal misconduct by a British subsidiary of AIG. Authorities with the SFO have yet to describe any charges that may be filed against AIG Financial Products, describing the probe as a preliminary inquiry into suspected irregularities at the company. The investigation is the third inquiry AIG Financial Products currently faces and the second by a British investigative group. AIG was essentially taken over by the U.S. government last fall. (CNN Money)
A 2007 research paper regarding unprecedented concentrations of lead in the Washington, D.C. water supply and assuring residents that they had not been harmed by the contaminants is under scrutiny because of concerns that it was only published after final approval was given by the city’s water authority. The author, Tee Guidotti, was a paid consultant to the city’s water authority and failed to disclose that he had to get the authority’s approval of any research he publishes about the utility. Editors at the National Institutes of Health journal found that the conclusion, that residents had not been harmed, had in been published even though they asked Guidotti to remove it. Experts reviewing the paper rejected that finding as scientifically dubious. (Washington Post)
