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New York seeks probe of Wal-Mart for surveillance
Business Law Info | 2007/04/11 16:01

New York City is seeking a probe of Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) over the retailer's reported surveillance of shareholders who submitted proxy petitions that could potentially disrupt the company's annual meeting. New York City Comptroller William C. Thompson Jr. sent letters to the U.S. Attorney General's office and the Securities and Exchange Commission, asking for an investigation into the world's largest retailer for what he called "ill-considered and possibly illegal surveillance operations."

"As New York City's Chief Financial Officer and the Chief Investment Advisor to the City's Pension Funds, I am particularly troubled by reports that Wal-Mart engaged in chilling and truly outrageous surveillance activities," Thompson wrote. Copies of the letters were posted on the comptroller's Web site.

Wal-Mart could not immediately comment on the story. The SEC declined to comment.

Last week, a report in The Wall Street Journal said an internal Wal-Mart security group was asked to investigate the potential threat of those submitting proposals to its June shareholder meeting.

Following the article's publication, Tom Hyde, Wal-Mart's top legal officer, sent a letter to shareholder proponents saying that while the article implied that the company had initiated an intrusive "threat assessment" of shareholders who submitted proposals for inclusion in Wal-Mart's annual proxy statement, that was not true.

"In spite of a January 2007 memo referenced in the article, there were no inquiries made with respect to the proponents of shareholder proposals," he wrote in the letter, a copy of which Wal-Mart provided. "Given the nature of the matters proposed and our familiarity with the individual proponents, the request contained in the memo was not acted upon."

The New York City Pension Funds represent nearly 600,000 active members, beneficiaries and retirees and are valued at nearly $100 billion, according the Web site.

Wal-Mart shares fell 24 cents to $47.70 in morning New York Stock Exchange trade.



Man pleads guilty in massive mortgage fraud scheme
Court Feed News | 2007/04/11 15:56

A man accused of stealing the identities of children, the homeless and people in drug rehab as part of a massive mortgage fraud scheme pleaded guilty to federal charges in three states Tuesday. Matthew Cox, 37, faces up to 54 years in prison and $2 million in fines at his Aug. 22 sentencing, but will likely not receive that stiff a punishment.

As part of a deal Cox struck with the government, prosecutors have agreed to recommend that U.S. District Judge Timothy Batten sentence Cox at the low end of federal guidelines. The exact range has not been determined.

Cox pleaded guilty to six charges that were leveled in Georgia, Florida and Tennessee: bank fraud, identity theft, passport fraud, two counts of mortgage fraud conspiracy, and violating his probation for a previous mortgage fraud conviction.

Forty-one other counts against him in Georgia will be dropped as part of his plea agreement.

Prosecutors say Cox and Rebecca Marie Hauck rented properties, fraudulently erased mortgage liens on the properties and then stole the owners’ identities and fraudulently took out multiple new mortgage loans.

They also used stolen identities to obtain driver’s licenses, purchase vehicles, lease mail drops, rent apartments and open bank accounts to receive proceeds from their schemes in Georgia, Florida, Alabama, South Carolina and North Carolina, authorities said.



California diocese threatened with contempt
Lawyer Blog News | 2007/04/11 15:54

A federal bankruptcy judge is threatening the Roman Catholic Diocese of San Diego with contempt for allegedly attempting to hide assets to avoid payment to clergy sexual abuse victims. Judge Louise DeCarl Adler ordered the diocese's lead attorney into court Wednesday to explain why she and her colleagues should not be sanctioned. Adler cited a March 29 letter sent by a diocese parish organization to pastors urging them to get new taxpayer identification numbers and transfer funds to new accounts. The threat Monday came six weeks after the diocese sought bankruptcy protection amid lawsuits by more than 140 people who accuse priests of sexual abuse.

The judge said any post-bankruptcy transfers between the diocese and parishes outside of normal cash operations violate her ruling against shifting the diocese's assets while the bankruptcy case is pending. She said any transfers require court approval.

In a sternly worded order, Adler said attorneys Susan Boswell, Jeffry Davis and Victor Vilaplana appear to have "conspired with parishes" to create new bank accounts separate from the diocese.

Boswell wrote in court documents Tuesday that no intentional misrepresentations or misstatements had been made. She said the diocese has "no access or control" over money in more than 770 bank accounts opened by parishes and parochial schools under the diocese's taxpayer identification number.

Davis wrote in court papers that he thought comments Adler made in an earlier hearing suggested that parishes should obtain their own taxpayer identification numbers for clarity in the bankruptcy case.

Attorneys for the alleged victims have repeatedly accused the church of trying to hide assets to reduce the overall sum available for potential settlements. They estimate that a fair settlement would total about $200 million.

In March, the diocese proposed a $95 million settlement schedule for victims that would offer plaintiffs anywhere from $10,000 to $800,000.

San Diego was the fifth U.S. diocese to file for bankruptcy. The other dioceses that have filed for bankruptcy protection are Davenport, Iowa; Portland, Ore.; Spokane, Wash.; and Tucson, Ariz. Tucson has emerged from bankruptcy protection, while proposed settlements are awaiting final approval in Portland and Spokane.



Sunderland man found guilty of killing eagle
Court Feed News | 2007/04/11 11:56

The owner of a Sunderland trout hatchery, who pleaded guilty last month to killing herons and ospreys that were feeding at his fish pools, also was convicted on Tuesday of killing a bald eagle. U.S. District Judge Michael Ponsor in a nonjury trial found Michael Zak, 59, guilty of one count of shooting and killing an eagle, and one count of violating the Migratory Bird Treaty Act, which provides protection for migratory birds through international cooperation and treaties.

Zak, owner of the Mohawk Trout Hatchery, had pleaded guilty on March 26 to two counts of violating the Migratory Bird Treaty Act and one count of conspiracy.

His attorney, Vincent Bongiorni, said then his client was not willing to accept a guilty plea for the eagle charge.

"There was a factual basis to support those two counts and our claim is that it doesn't support the bald eagle count," he said.

Zak's employee, Timothy Lloyd, 30, of Easthampton, pleaded guilty March 23 to two counts of violating the migratory bird act and one count of conspiracy.

Federal investigators said they found more than 250 great blue heron carcasses, as well as carcasses of ospreys and a bald eagle on hatchery property. Tests showed the birds were killed by gunshots.

U.S. Fish and Wildlife Service agents say they staked out the hatchery periodically and saw Zak shoot at a heron with a scoped rifle and Lloyd shoot and kill an osprey.

The men are to be sentenced on June 27. Zak faces up to three years in prison and Lloyd faces up to 18 months.



Gonzales gets subpoena in US firings
Lawyer Blog News | 2007/04/11 06:19

The US House Judiciary Committee issued a subpoena to US Attorney General Alberto Gonzales Tuesday for US Justice Department documents relating to the firings of eight US Attorneys. In a letter accompanying the subpoena, committee Chairman John Conyers, Jr. (D-MI) noted that the DOJ's "incomplete response" to the committee's request for documents "falls far short of what is needed for the Subcommittee and Committee to effectively exercise their oversight responsibilities in ascertaining the truth behind the very serious concerns that have been raised regarding this matter."

The subpoena comes the day after four senators on the Senate Judiciary Committee sent a letter to Gonzales, requesting additional undisclosed documents in that committee's investigation of the firings and claiming the DOJ failed to turn over relevant documents despite repeated calls from the Senate Judiciary Committee. The letter from US Senators Arlen Specter (R-PA), Patrick Leahy (D-VT), Charles Schumer (D-NY), and Dianne Feinstein (D-CA) suggests that the DOJ has been less than forthright in disclosing documents:

We are concerned that additional documents relevant to the Committees' investigations are missing or have been withheld.... Given that this was a process that extended over more than two years and involved staff from both the Department of Justice and the White House, and involved consideration of a number of U.S. Attorneys, there would seem to be other documents that would comment upon the reasons some U.S. Attorneys were chosen for removal and others were not. For example, there are press reports that the former U.S. Attorney in San Francisco had multiple evaluations and was the subject of significant discussions. Documents reflecting those multiple evaluations and significant discussions have not been produced to date. This raises a question about whether we have seen all similar documents about others selected for replacement or left in place.

In addition, the letter identifies specific undisclosed documents such as a chart provided by former Gonzales aide Monica Goodling to former chief of staff Kyle Sampson, who both resigned in the wake of the scandal, that was described in an e-mail that was turned over to the committee. The letter also outlines several document requests and poses questions from the committee concerning its disclosure procedures.

Last Thursday, Leahy sent a letter to White House counsel Fred Fielding seeking undisclosed documents relating to the firings from President George W. Bush. Last Monday, Leahy rejected attempts by the Bush administration to move up the date that Gonzales is scheduled to testify. In March, Sampson told the Senate Judiciary Committee that the prosecutors were fired for political reasons rather than for poor performance as the DOJ has claimed.



Two former TYC employees indicted in sex abuse case
Court Feed News | 2007/04/11 06:14

Two former administrators at a Texas juvenile prison were arrested Tuesday on 13 charges of improper sexual conduct with six students. Former West Texas State School principal John Paul Hernandez and former assistant superintendent Ray E. Brookins each resigned in 2005 as an investigation by Texas Rangers; the case has only recently moved forward as Texas Attorney General Greg Abbott has taken over the case from a local prosecutor who declined to pursue most cases relating to the school from 2005-2006. The investigating Rangers alleged that they presented their findings to the state and US Attorney offices as well as the Department of Justice, but that no office showed interest in prosecution. Hernandez was charged with nine counts of improper sexual activity with a person in custody and nine counts of improper relationship with a student. Brookins faces up to 20 years in prison for charges of an improper relationship with a student and two years in prison for improper sexual activity with a person in custody.

A 2006 US Department of Justice report said that sexual violence in US prisons, perpetrated by both inmates and prison staff, often goes unreported because abused inmates fear a reprisal. Last month, Texas Gov. Rick Perry appointed a commission to review the records of approximately 90 percent of the state's juvenile inmates following allegations by families and community activists that prison officials extended sentences in retaliation for inmates filing grievances. Staff-initiated sexual misconduct constituted 38 percent of allegations. The authors of the report also warned against placing juvenile inmates with the adult prison population, finding that the incidents of rape and abuse are five times higher against juveniles. The report, which was the second in an annual series required by the Prison Rape Elimination Act of 2003, showed a marked improvement over staff sexual misconduct and harassment since the initial 2004 study.



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