Hosam Maher Husein Smadi pleaded guilty today before U.S. District Judge Barbara M. G. Lynn to a felony offense related to his attempted bombing of a downtown Dallas skyscraper in September 2009, announced David Kris, Assistant Attorney General for National Security, U.S. Attorney James T. Jacks of the Northern District of Texas, and Robert E. Casey Jr., Special Agent in Charge of the FBI Dallas Field Division.

Smadi, 19, pleaded guilty to one count of attempted use of a weapon of mass destruction. He faces a maximum statutory sentence of life in prison and a $250,000 fine. Under the terms of the plea agreement, however, Smadi faces a sentence of 30 years in prison, if the court accepts the plea. Judge Lynn has set a sentencing date of Aug. 20, 2010.

"Today's guilty plea underscores the continuing threat we face from lone actors who, although not members of any international terrorist organization, are willing to carry out acts of violence in this country to further the terrorist cause. I applaud the many agents, analysts and prosecutors responsible for this successful investigation and prosecution," said Assistant Attorney General Kris.

"I commend the FBI, the lawyers and support staff in the U.S. Attorney's Office, and the Counterterrorism section at the Department of Justice for their excellent work in bringing this case closer to a successful conclusion," said U.S. Attorney Jacks.

"The facts disclosed today and Smadi's plea make it clear his intention was to kill American citizens. I want to commend the work of the FBI's North Texas Joint Terrorism Task Force investigators and the prosecutors in the U.S. Attorney's Office for the Northern District of Texas, who worked countless hours to bring this investigation closer to its conclusion and to protect the community in their execution of the FBI's Counterterrorism strategy to detect, penetrate, and disrupt acts of terrorism in the United States," said FBI Special Agent in Charge Casey.

According to documents filed, on Sept. 24, 2009, Smadi knowingly took possession of a truck that contained a weapon of mass destruction, specifically a destructive device or bomb. The truck with the bomb inside was a vehicle borne improvised explosive device. Smadi believed that this was an active weapon of mass destruction, and while it was inert when Smadi took possession of it, it was a readily-convertible weapon of mass destruction.

Smadi knowingly drove the truck containing the bomb to Fountain Place, a 60-story public office building located at 1445 Ross Avenue in Dallas, and parked it in the public parking garage under the building. After parking the truck, Smadi activated a timer connected to the device, locked the truck and walked away. Smadi walked out of the parking garage, crossed the street and got into a car with an undercover law enforcement agent. They drove a safe distance away and prepared to watch the explosion. Smadi, who believed the bomb would explode and cause extensive damage, used a cell phone to remotely activate the device.

The case is being investigated by the FBI in conjunction with members of the FBI-sponsored North Texas Joint Terrorism Task Force. Assistant U.S. Attorney Dayle Elieson and Deputy Criminal Chief Assistant U.S. Attorney Jerri Sims are prosecuting.

SOURCE U.S. Department of Justice

The April 20, 2010 oil rig explosion in the Gulf of Mexico killed 11 workers and injured more than 100 after suffering a catastrophic blowout. The owner of the rig, Transocean Ltd, is already attempting to limit its liability for the blast by filing a petition in the Southern District of Texas seeking to limit its overall liability to just over $26 million.

"There are limited circumstances when vessel owners are able to limit liability under the Act.  We don't expect that any of those circumstances will apply here," said Ryan Zehl, who is currently representing several workers who were injured in the Transocean explosion.

For the limitation to work, Transocean must prove that it did not have prior knowledge of the explosion's cause and, as a result, could not have prevented it.  If they show this, Transocean's total liability could be limited to the value of the Deepwater Horizon after it exploded and sunk to the bottom of the ocean, which--according to its filings with the court--is $26,764,083.00, well below its pre-accident value of $650 million.

"The Act was passed before insurance covered against disasters, said Zehl. Because vessels, like the Deepwater Horizon, are now insured, the vessel's owner can--and in this case would if the limitation applies--collect more in insurance proceeds than it has to pay out in damages.  Today, it's just an antiquated remedy that gives companies like Transocean a way to escape responsibility."

Transocean deliberately waited to file the limitation until after the Congressional hearings to avoid criticism for taking such insensitive actions in response to a terrible tragedy," said Zehl. "It appears that the company is more concerned about its bottom line than the lives of its employees and their families."

Fitts Zehl LLP is a national maritime and personal injury law firm that focuses on representing workers who were injured or lost their lives in offshore and other work place explosions.  The firm is currently representing several workers who were injured during the Transocean Deepwater Horizon explosion, and has recovered millions in damages on behalf of injured offshore and refinery workers in connection with 3 of the largest work place explosions since 2005: the BP Texas City explosion, and both the Imperial Sugar refinery explosion and the International Paper explosion in 2008.

In a ground-breaking decision that altered US copyright law, the United States Court of Appeals for the Second Circuit today overturned a lower court ruling that had barred publication of 60 Years Later -- Coming Through the Rye. The case will now return to Judge Deborah A. Batts of the US District Court for the Southern District of New York. Judge Batts, who had barred the book on July 1, 2009, must now apply a new legal standard to the case.

Attorneys for the author, Fredrik Colting, and his US distributor, SCB Distributors Inc., had argued that publication of 60 Years Later -- a thoughtful literary critique on The Catcher in the Rye and J.D. Salinger - would not harm J.D. Salinger's copyright in Catcher. But the lower court did not require Mr. Salinger to show that he would be irreparably harmed if the book is published. Under the appeals court decision today, the lower court must now require Mr. Salinger's representatives to prove actual harm to his copyright in Catcher before a book ban can issue. The lower court also must consider the interests of the public in having the book published.

"We are pleased that the injunction barring the publication of 60 Years Later has been vacated," said Edward H. Rosenthal of Frankfurt Kurnit. "We are confident that when the district court applies the new analysis required by the appeals court, the book will not be enjoined."

For a copy of the decision, visit http://www.fkks.com/jdsalinger.asp.

SOURCE Frankfurt Kurnit Klein & Selz

Preet Bharara, the U.S. Attorney for the Southern District of New York, and George Venizelos, the Special Agent-in-Charge of the New York Office of the FBI, announced today the unsealing of an indictment against fourteen members and associates of the Gambino Organized Crime Family of La Cosa Nostra (the Gambino Family) charging racketeering, murder, sex trafficking, sex trafficking of a minor, jury tampering, extortion, assault, narcotics trafficking, wire fraud, loansharking and illegal gambling.

The 14 defendants charged today are Daniel Marino, Thomas Orefice, Onofrio Modica, Dominick Difiore, Anthony Manzella, Michael Scotto, Michael Scarpaci, Thomas Scarpaci, David Eisler, Salvatore Borgia, Steve Maiurro, Keith Dellitalia, Suzanne Porcelli and  Anthony Vecchione.  Modica was arrested on April 16, 2010.  Twelve defendants were arrested early this morning by the FBI, and Maiurro remains at large.  The arrested defendants are expected to be presented in Manhattan federal court later today before U.S. Magistrate Judge Michael H. Dolinger.  The case is assigned to U.S. District Judge Lewis A. Kaplan.  The initial conference before Judge Kaplan is scheduled for April 21, 2010, at 11 a.m.

As alleged in the indictment unsealed today in Manhattan federal court, as well as the government's motion for detention filed today:

Daniel Marino is a longtime member and is currently a boss of the Gambino Family.  In that capacity, Marino has over 200 fully-inducted or "made" mafia members under his command, as well as hundreds of associates who commit crimes with and for the mafia.  Thomas Orefice and Onofrio Modica are currently soldiers of the Gambino Family acting under Marino's supervision.  Orefice and Modica each supervise crews that include Dominick Difiore, Anthony Manzella, Michael Scotto, Michael Scarpaci, Thomas Scarpaci, David Eisler and Salvatore Borgia, all of whom are charged with racketeering and racketeering conspiracy.  The indictment also charges other individuals who committed crimes with and for the Gambino Family, including Steve Maiurro, Keith Dellitalia, Suzanne Porcelli and Anthony Vecchione.  

In addition to the racketeering charges, the defendants are charged with the following crimes:

Murder of Thomas Spinelli

Marino is charged with the 1989 murder of Thomas Spinelli, a made member of the Gambino Family.  In the months leading up to Spinelli's death, concern arose in the Gambino Family about his testimony in a federal grand jury about many of the mafia's members and activities.  As a result, Marino, working with various co-conspirators, including John J. Gotti (who was then Boss of the Gambino Family) and Salvatore Gravano (who was then Underboss) set out to kill Spinelli to prevent him from further testifying.  Marino and his co-conspirators lured Spinelli to a window company in Brooklyn, where he was shot in the head and killed.  Marino then helped to dispose of Spinelli's body, which has never been found.

Murder of Frank Hydell

Marino is also charged for the 1998 murder of Frank Hydell.  In 1997, suspicion arose within the Gambino Family that Hydell, Marino's nephew, was cooperating with law enforcement which, in fact, was the case.  Based on these suspicions, various Gambino Family members and associates plotted to kill Hydell and sought Marino's approval for the hit.  Upon Marino's authorization to kill Hydell, the Gambino Family members and associates lured Hydell to a strip club in Staten Island where he was shot three times in the face and back.  He died in the strip club's parking lot.

Murder of James DiGuglielmo and Richard Sbarra

Modica is charged with the double murder of James DiGuglielmo and Richard Sbarra.  Modica and DiGuglielmo became involved in a drug-related dispute.  As a result, on Aug. 22, 1987, Modica drove his motorcycle with a shooter riding on the back to a crowded parking lot where the shooter opened fire at DiGuglielmo.  DiGuglielmo and Sbarra, an innocent bystander, were killed in the drive-by shooting.

Sex Trafficking and Sex Trafficking of A Minor

Orefice, Difiore, Manzella, Scotto, Eisler, Maiurro and Porcelli are charged with sex trafficking and sex trafficking of a minor.  From 2008 to 2009, the defendants operated a prostitution business where young women and girls -- including an underage girl who was 15 years old at the time -- were exploited and sold for sex.  The defendants first recruited various young women and girls -- ages 15 through 19 -- to work as prostitutes.  The defendants then advertised the prostitution business on Craigslist and other websites.  The defendants drove the women to appointments in Manhattan, Brooklyn, New Jersey and Staten Island to have sex with clients.  The defendants then took approximately 50 percent of the money paid to the young women.  The defendants also made the women available for sex to gamblers at a weekly, high-stakes poker games that Orefice and his crew ran.

Jury Tampering

In 1992, then-Boss John J. Gotti was on trial for federal racketeering and murder charges in the Eastern District of New York.  Modica, along with various other Gambino Family members, took part in a plot to locate the anonymous, sequestered jurors sitting on that trial.  Modica and the others eventually penetrated various security measures, and located the jury at the hotel where it was sequestered.  The plan to tamper with the jury was called off, however, when Gotti came to believe that the jury would not convict him, even without outside interference.

Extortions and Assaults

Marino is charged with extorting broad swaths of the construction industry in and around New York from at least the 1980s to the present.  Through the use of violence and threats, Marino and the Gambino Family have extorted millions of dollars annually from unions, contractors, developers and suppliers.  

Orefice, Difiore, Manzella, Scotto, Michael Scarpaci, Thomas Scarpaci, Dellitalia, Eisler and Vecchione are charged with extorting payments from various businesses and individuals through the use of violence and threats.  The defendants targeted businesses in the home heating oil industry and the financial services industry, as well as various individuals in and around New York City.

Several of the extortions resulted in serious beatings.  For example:

• In December 2005, after an extortion victim failed to make a payment, Orefice, Difiore and Dellitalia punched and used a baseball bat to beat the victim.
• In 2008, Orefice and Difiore tracked down another extortion victim who failed to make a payment, beat him viciously, and left him on the street.
• In the summer of 2009, members of Orefice's crew went to the office of a business owner in an attempt to shake him down, demanded to see their extortion victim, and, when refused, threatened the business owner's office staff.

Wire Fraud

Orefice and Manzella are charged with defrauding various high-end restaurants in New York City by inflating invoices for meat orders placed with Manzella's company and paying kickbacks to the chefs responsible for ordering the meat.  The invoices were sometimes inflated by as much as 40 percent of actual costs.  To ensure that the chefs at the restaurants would continue ordering meat from Manzella's company, and to encourage them to turn a blind eye to the scam, Orefice and Manzella kicked back about five percent of the proceeds back to them.

Narcotics Trafficking

Orefice, Difiore and Borgia are charged with trafficking in narcotics -- including cocaine, oxycontin, and marijuana -- for and on behalf of the Gambino Family.  

Loansharking

Marino, Orefice, Difiore, Scotto, Michael Scarpaci and Thomas Scarpaci are charged with making and collecting extortionate extensions of credit -- commonly known as "loansharking."  When debtors became unable to keep up their repayment obligations, the defendants threatened them.  In one series of consensually-recorded discussions about the loansharking operation, a loanshark victim was said to have been "roughed up" and put in the trunk of a car.  The participants then agreed that, if necessary, firearms, including AK-47s and AR-14s, could be obtained to help ensure repayment from debtors.  

Gambling

Marino, Orefice, Modica, Difiore, Manzella, Michael Scarpaci, Thomas Scarpaci, Eisler, Borgia and Dellitalia are charged with running illegal gambling operations for the Gambino Family.  These operations included an internet-based sports betting, or "bookmaking," operation, and a regular, high-stakes card game.

The indictment also seeks forfeiture of the proceeds of the alleged crimes, including of $20 million as to counts one and two.

U.S. Attorney Preet Bharara stated: "As today's case demonstrates, the mafia is not dead.  It is alive and kicking.  Modern mobsters may be less colorful, less flamboyant, and less glamorous than some of their predecessors, but they are still terrorizing businesses, using baseball bats, and putting people in the hospital.  Today, the Gambino Family has lost one of its leaders, and many of its rising stars have now fallen.  We will continue to work with our partners at the FBI to eradicate the mafia, and to keep organized crime from victimizing the businesses, and the people, of this City."

FBI Special Agent-in-Charge George Venizelos stated: "In some ways, this is not the Gambino family of John J. Gotti.  But while the leadership may maintain a lower profile, this case shows that it's still about making money illegally, by whatever means.  No crime seemed too depraved to be exploited if it was a money-maker, including the sexual exploitation of a 15-year-old.  In truth, despite the popular fascination, it was never really about the thousand-dollar suits.  It was -- and is -- about murder, mayhem and money."

Mr. Bharara praised the outstanding investigative work of the FBI.  Mr. Bharara also noted that the investigation is continuing.

Assistant U.S. Attorneys Elie Honig, Steve Kwok and Jason Hernandez are in charge of the prosecution.  The case is being handled by the Office's Organized Crime Unit.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

SOURCE U.S. Department of Justice

Detroit-area resident Emma King pleaded guilty today to engaging in a fraudulent medical testing scheme, announced the Departments of Justice and Health and Human Services (HHS).

King, 61, pleaded guilty today to one count of conspiracy to commit health care fraud before U.S. District Court Judge Patrick J. Duggan in the Eastern District of Michigan.  King faces a maximum penalty of 10 years in prison and a $250,000 fine.  A sentencing date has not yet been scheduled.

According to the plea documents, beginning in approximately September 2007, King began recruiting and transporting patients to a clinic called Ritecare LLC.  Ritecare, was owned and operated by co-conspirators and had locations in Detroit and Livonia, Mich.  King admitted that she and a co-conspirator paid kickbacks to Medicare beneficiaries that she recruited and transported to Ritecare.  According to the plea documents, the owners and operators of Ritecare were the source of the funds used by King to pay the Medicare beneficiaries she recruited.  King admitted that she would keep part of the funds she received from the owners and operators of Ritecare to secure patients as a kickback for referring the Medicare beneficiaries she recruited.  Typically, the owners of Ritecare would provide $100-$150 per patient King recruited, with King retaining $50-$75 of that amount for the referral.  

According to the plea documents, the patients King recruited had to subject themselves to medically unnecessary tests to receive the money.  Per instructions from the owners and operators of Ritecare, King admitted that she instructed the patients to claim they had certain symptoms to trigger medically unnecessary tests.  Consequently, the patients' medical records contained false symptoms allowing Ritecare to deceive Medicare as to the legitimacy and medical necessity of the tests it performed.  

King admitted that she was responsible for recruiting at least 269 patients to Ritecare.  Through her recruitment efforts, King caused the submission of approximately $940,760 in false or fraudulent billings by Ritecare.  Medicare paid approximately $533,643 on those claims.

Today's guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI's Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General's (OIG) Chicago Regional Office.

The case was prosecuted by Senior Trial Attorney John K. Neal and Trial Attorney Gejaa T. Gobena of the Criminal Division's Fraud Section.  The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Eastern District of Michigan.  

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for approximately $1.1 billion.  In addition, HHS's Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

SOURCE U.S. Department of Justice

Thomas Joseph Petters, age 52, of Wayzata, Minn., has been sentenced to 50 years in federal prison for orchestrating a $3.7 billion Ponzi scheme. The sentence, imposed by U.S. District Court Judge Richard H. Kyle earlier this morning in St. Paul, Minn., represents the longest term of imprisonment ever ordered in a financial fraud case in Minnesota history. In ordering the prison term, Judge Kyle said, "I'm not satisfied that if he were released early, he wouldn't re-offend."

Following a month-long trial, Petters was convicted on Dec. 2, 2009, of 10 counts of wire fraud, three counts of mail fraud, one count of conspiracy to commit mail and wire fraud, one count of conspiracy to commit money laundering, and five counts of money laundering. Today, while referring to the lack of believability in Petters' trial testimony, Judge Kyle said, "It just didn't pass the smell test."

After the sentencing, U.S. Attorney B. Todd Jones said, "For years Tom Petters built his life on the shattered dreams of others. Minnesotans need to be reminded there are thousands of entrepreneurs in our state who are grounded in community values, give generously to charity, act as true mentors to other business people, are ethical stewards of investors and grow good jobs. They are not Tom Petters. Tom Petters is a fraud, and now he will pay a huge price for his self-enrichment and his deceit. The sentence imposed today by the court and the tremendous efforts made by an outstanding prosecution team in presenting this case to a jury should send a strong message to others that we in the Department of Justice are committed to investigating and vigorously prosecuting those who commit financial crimes, particularly during these tough economic times."

Ralph S. Boelter, Special Agent in Charge of the Minneapolis field office of the Federal Bureau of Investigation, added, "It is my hope that this day will mark the start of a recovery process of sorts for all those victimized by Tom Petters, and that his sentence, appropriate for the crimes committed, will serve an effective deterrent to those similarly inclined."

According to the evidence presented at trial, Petters, assisted by others, defrauded and obtained billions of dollars in money and property by inducing investors to provide Petters Company, Inc., (PCI) funds to purchase merchandise that was to be resold to retailers at a profit. However, no such purchases were made. Instead, the defendants and co-conspirators diverted the funds for other purposes, such as making lulling payments to investors, paying off those who assisted in the fraud scheme, funding businesses owned or controlled by the defendants and financing Tom Petters' extravagant lifestyle.

"In simplest terms, promoters of Ponzi schemes prey upon trusting investors and then steal their hared-earned money," said Julio LaRosa, Special Agent in Charge of the Internal Revenue Service (IRS) - Criminal Investigation Division. "This case was a blatant example of this type of fraud, and the IRS - Criminal Investigation Division, along with its law enforcement partners, worked diligently to get to the facts behind the facade and ensure that those responsible face the punishment they brought on themselves for the devastation they caused in the lives of so many."

The investigation of this case began on Sept. 8, 2008, when co-conspirator Deanna Coleman and her attorney reported to authorities that she had been assisting Petters in executing a multi-billion-dollar Ponzi scheme over the previous 10 years. Coleman claimed she, Petters and co-conspirator Robert White had fabricated business documents to entice investors into lending Petters money purportedly to buy electronic goods to be sold to big-box retailers, such as Costco and Sam's Club.

Coleman subsequently agreed to work with law enforcement. She wore a recording device to tape conversations with Petters and others to substantiate her claims as well as White and Petters' involvement in the fraud. Within the first few hours of Coleman's recorded conversations, Petters was heard admitting that purchase orders were "fake" and claiming "divine intervention" was the only explanation for how he and his co-conspirators "could have got away with this for so long." Those recorded conversations chronicled the history of the scheme as well as the conspirators' efforts to maintain it by obtaining new investor funds and lulling long-term investors. The recordings also detailed how the conspirators planned to avoid responsibility if the fraud was discovered.

On September 24, 2008, agents from the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation Division; and the U.S. Postal Inspection Service executed search warrants at Petters' headquarters, Petters' home, and other locations. They recovered numerous documents and evidence. Within days, PCI filed for bankruptcy. On October 3, Petters was arrested and detained after authorities learned he had been discussing fleeing the jurisdiction. He has been in custody since that time. His indictment on these charges occurred in December of 2008.

Shawn S. Tiller, Postal Inspector in Charge of the Denver Division, which includes the Twin Cities, said, "The sentencing today of Tom Petters in this $3.7 billion Ponzi scheme is reassurance that the U.S. Attorney's Office and the U.S. Postal Inspection Service will remain at the forefront of investigating cases like these, where the trust and confidence of the American public has been violated through the criminal misuse of the U.S. mail. As long as there are individuals such as Petters and those associated with his company, PCI, who continue to misuse the U.S. mail to steal the hard-earned money of investors and ruin their hopes and dreams of a secure financial future, postal inspectors will be there to ensure that justice is served."

Through Petters' scam, potential investors were provided fabricated documents that listed goods purportedly purchased by PCI from various vendors and then sold to retailers. In some instances, investors also were provided false records indicating that PCI had wired its own funds to vendors, thus giving the appearance that PCI had money invested in the deals too. In addition, investors frequently received false PCI financial statements showing the company was owed billions of dollars from retailers. To induce investors further, Petters often signed promissory notes and provided his personal guarantee for the funds received. Those who invested, however, were not paid through profits from actual transactions. Rather, they were paid with money obtained from subsequent investors and, sometimes, even their own money. PCI, which was formed in 1994, was solely owned by Petters and was used for fraudulent purposes from the start. Petters inflated and falsified purchase orders in an effort to obtain more money from investors, which, in turn, he used to pay other investors as well as his increasingly lavish personal lifestyle. When Petters could not pay an investor on time, he employed delay and evasion tactics, such as promising payment in the near future, making up excuses about slow payments from retailers, or providing checks that bounced. As the scheme progressed, Coleman, who was hired by Petters as an office manager in 1993, began fabricating PCI purchase orders and transferring funds between investors. In 1999, Petters wanted to give investors false bank statements to "verify" PCI's purported bank transactions with retailers. Therefore, Petters turned to White, his friend, who agreed to prepare the fraudulent documents. Afterward, Petters hired White and gave him the title of chief financial officer of PCI. Among other things, White was responsible for fabricating retailer purchase orders and PCI financial records. To further his scheme, Petters recruited purported vendors to assist him. In 2001, he asked business associates Larry Reynolds and Michael Catain to launder billions of dollars of investor funds through their business accounts and back to Petters and PCI. Reynolds operated Nationwide International Resources, Inc. (NIR) and previously had conducted deals involving shoes and clothing with retailers, including Petters. In 2001, Petters asked Reynolds to allow him to wire money through Reynolds's bank accounts in exchange for a percentage of the funds in "commission." Petters made a similar agreement with Catain. As a result, in early 2002, Catain created a sham company, Enchanted Family Buying Co. (EFBC), and opened a business bank account. He then directed funds from Petters through that business account and back to Petters and PCI, less a commission. EFBC did no real business. In fact, its headquarters was above Catain's car wash, just a few miles from Petters' headquarters. Between January 2003 and September 2008, approximately $12 billion flowed through the NIR account into the PCI account. During that same time period, roughly the same amount flowed through the EFBC account into PCI. Although each company was purportedly a vendor, selling hundreds of millions of dollars in merchandise, bank records revealed no vendor income from those transactions. Instead, money only flowed one way - from the companies to PCI. In April of 2001, PCI opened a new bank account that only Petters and Coleman were authorized to use. From January 2003 to September 2008, approximately $35 billion was wired into that account from investors, NIR, and EFBC. Although PCI supposedly was selling merchandise to retailers, none of the deposits into the account came from retailers. Moreover, while some funds in the account went to pay investors, other money from the account was used for bonuses for Petters' employees, most of whom did not even work for PCI. In addition, hundreds of millions of dollars went to fund Petters' companies, including Petters Warehouse Direct and RedTag. Petters also used PCI funds to employ family members, purchase real estate for family members, and fund businesses for them. Finally, millions went to Coleman and White, while Petters himself received tens of millions in account dollars. Petters continued to purchase and operate companies in an effort to maintain the facade of a successful businessman and create a false air of legitimacy that would lure new investors. The companies he bought were purchased with proceeds of the PCI fraud, and they included Fingerhut, Polaroid, and Sun Country Airlines, which, collectively, became known as Petters Group Worldwide, or PGW. Each year PCI wrote off millions of dollars in losses based on the losses it incurred from funding these other companies. However, the companies provided Petters the appearance he needed to keep the scam going. By the end of 2007, the conspirators were struggling to find new investors, and PCI was slow to pay hundreds of millions of dollars in promissory notes held by Lancelot Investment Management, which was operated by Greg Bell. Petters told Bell the slow payments were due to his retailers, who were late in paying him. As a result, Bell agreed to an extension on the payments so the notes would not go into default. In February 2008, Bell and Petters agreed Bell would receive replacement purchase orders from other retailers for the purported purchase orders held by Lancelot. Bell suggested they also exchange money so it would appear that PCI was paying its notes. Between late February 2008 and the date of the search warrants, Bell and Petters engaged in more than 80 "round trip" financial transactions intended to give the false impression that PCI was paying its obligations when due. Petters continued to lull investors even after law enforcement executed search warrants on September 24, 2008. Furthermore, on October 1, 2008, Petters suggested to White and Reynolds that they flee prior to prosecution. Coleman, White, Reynolds, Catain, and Bell already have pleaded guilty for their roles in the scheme. Sentencing dates for them, however, have not been scheduled. James Wemhoff, Petters' personal and business accountant, has pled guilty to criminal charges not related to the PCI Ponzi scheme. He has not been sentenced either. This case was the result of an investigation by the Federal Bureau of Investigation, the IRS-Criminal Investigation Division, and the U.S. Postal Inspection Service. It was prosecuted by Assistant U.S. Attorneys Joseph T. Dixon, John R. Marti, Timothy C. Rank, and John F. Docherty.

The following statement was issued today by the law firm of Barroway Topaz Kessler Meltzer & Check, LLP:

Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Western District of Washington on behalf of purchasers of the securities of Cell Therapeutics, Inc. (Nasdaq: CTIC) ("Cell Therapeutics" or the "Company"), who purchased or otherwise acquired Cell Therapeutics' securities between May 5, 2009 and March 19, 2010, inclusive (the "Class Period"), including purchasers of the securities issued pursuant or traceable to the Company's public offering on or about July 23, 2009.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Barroway Topaz Kessler Meltzer & Check, LLP (Darren J. Check, Esq. or David M. Promisloff, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@btkmc.com.

The Complaint charges Cell Therapeutics and certain of its officers and directors with violations of the Securities Act of 1933 and Securities Exchange Act of 1934. Cell Therapeutics is a biopharmaceutical company focused on developing and commercializing novel agents that seek to improve the safety and efficacy of existing standard-of-care chemotherapies, and those that may have unique, new mechanisms to kill cancer cells. During the Class Period, defendants misled investors concerning the results of a Phase III clinical study ("PIX-301") of a drug the Company was developing called pixantrone for the treatment of Non-Hodgkin's Lymphoma ("NHL"), as well as other cancers.

More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) the Company's Special Protocol Assessment for pixantrone was invalidated by the fact that the study was terminated before fully enrolled and a planned interim analysis was not conducted; (2) the FDA had not approved the early termination of Study PIX-301 or the statistical analysis defendants intended to apply to the results of the study; (3) the Company enrolled large numbers of patients who didn't suffer aggressive NHL as the study protocol required; and (4) patients taking pixantrone in Study PIX-301 suffered more deaths, serious adverse events, and grade 3-4 adverse events than patients taking the comparator drug, including three deaths from heart failure in the pixantrone group compared to one in the comparator group.

Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Barroway Topaz Kessler Meltzer & Check which prosecutes class actions in both state and federal courts throughout the country.  Barroway Topaz Kessler Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.

For more information about Barroway Topaz Kessler Meltzer & Check, or for additional information about participating in this action, please visit www.btkmc.com.

If you are a member of the class described above, you may, not later than May 11, 2010, move the Court to serve as lead plaintiff of the class, if you so choose.  A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation.  In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class.  Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.  Any member of the purported class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. 

No on 17 intentionally trying to mislead voters. 'Parade of Horribles' Listed by Opponents in their Ballot Statements are Result of Current Auto Insurance Regulations, Not Prop. 17

Yes on 17, Californians for Fair Auto Insurance Rates, a coalition of consumers, businesses, senior organizations, taxpayer advocates and insurers, filed a lawsuit today in Sacramento Superior Court to force Proposition 17 opponents to make changes to their ballot arguments and ballot rebuttals and correct the patently false and misleading statements contained therein.

Proposition 17 on the June 8, 2010, California statewide ballot simply makes an existing persistency or "continuous coverage" discount portable, allowing customers to take it with them if they change insurance companies. Prop. 17 will mean more competition and choice in the auto insurance marketplace and will result in lower rates for drivers.

Prop 17 does not create a new discount. Thus any reductions in premiums or increases for those who are uninsured and do not maintain coverage are the result of current auto insurance regulations, not Prop 17.

Despite this, opponents of Prop 17 are intentionally misleading voters by repeatedly stating Proposition 17 creates new penalties. Statements to this effect appear throughout opponents' ballot arguments and rebuttals and are false and misleading. The "parade of horribles" cited in No on 17's ballot arguments are, in fact, already happening today, and exist under current regulations.

Ballot arguments and rebuttals appear in the Official Voter Information Guide compiled by the California Secretary of State and are distributed to every voter in California. Election law (Elec. Code Section 9092, Gov. Code  Section 88006) states that information in the voter guide must not contain "false and misleading" statements.

Opponents' ballot arguments and ballot rebuttals are available on the Secretary of State's website at www.sos.ca.gov.

"Proposition 17 simply allows responsible drivers who already qualify for a continuous coverage discount to take that discount with them if they change insurance companies. It does not create a new discount," said Kirk West, former president of the California Chamber of Commerce and co-chair of Californians for Fair Insurance rates (Cal-FAIR). 

West continued: "Throughout this campaign, opponents have misled and attempted to confuse voters. Their ballot arguments and rebuttals are more of the same statements. As authors of Proposition 103, they understand that the so-called "penalties" they speak of are attributable to current law and not to Prop. 17. Yet they are hiding behind false and misleading statements because they are afraid to acknowledge taking an anti-consumer position on Prop. 17 by opposing a measure that will result in more competition and more choice for more than 80% of California drivers who would benefit under Prop. 17."

Today, more than 80% of drivers maintain auto insurance and qualify for the persistency or continuous coverage discount, but can only get that discount from their current insurer. Thus, if a driver wants to switch to a new insurance company, he or she loses the discount and has to pay more.

Opponents' primary allegation against Prop. 17, made in a variety of ways in the ballot arguments and rebuttals, is that if Prop. 17 is passed and the continuous coverage discount is made portable, drivers seeking insurance who do not continuously maintain insurance coverage will pay more.

In fact, because the persistency or continuous coverage discount is being offered today, drivers who do not maintain continuous insurance coverage are today paying more to offset price reductions for those who do get the discount.

In other words, any reductions in premiums for drivers who qualify for the persistency discount, or the increase in premium for those who do not maintain continuous coverage, are products of existing regulations - not Proposition 17. 

Moreover, Proposition 17 adds new provisions to existing law that require insurers to offer the persistency discount even after lapses of coverage for up to 90 days for any reason other than nonpayment and for military service overseas; and Proposition 17 expressly does not limit an insurer's ability to offer additional grace periods for lapses. Current law offers none of these protections. As a result, repeated statements in the ballot arguments by opponents that Proposition 17 will increase rates for motorists are false and misleading. Any such increases are the result of existing law, not Proposition 17.

March 15, 2010, is the statutory deadline by which all June 2010 ballot argument challenges must be resolved. Prior to the deadline, Yes on 17 and No on 17 will meet in Sacramento Superior Court for oral argument in front of the judge assigned to this case. Since the suit was filed today no court date or judge has been assigned. There will be no ruling prior to oral argument. In past cases, the presiding judge has ruled from the bench immediately after oral arguments.

Background on ballot arguments and rebuttals in California

In ballot proposition campaigns in California, both the Yes side and No campaigns submit ballot arguments and ballot rebuttals for publication in the Official Voter Information Guide prepared by the California Secretary of State's Office.

Ballot arguments are submitted first. The Secretary of State then exchanges the arguments so each side can prepare a rebuttal to the main arguments for and against the proposition.

Rebuttals are in turn submitted, and then made available for public review along with the rest of the Official Voter Information Guide.

Proponents and opponents review ballot arguments and rebuttals and decide if they meet the California standard. If they do not meet the standard and contain false and misleading statements, lawsuits are permitted to ensure voters are not misled.

Ballot argument/rebuttal submission and litigation takes place months in advance of Election Day to allow time for potential litigation, printing and mailing the Voter Guide.

SOURCE Californians for Fair Auto Insurance Rates

United Security Bancshares, Inc. (Nasdaq: USBI) today announced that, along with its banking subsidiary First United Security Bank and Acceptance Loan Company, Inc., a finance company operated by the bank (collectively referred to as the "USB Companies"), it has entered into a settlement agreement to resolve all claims alleged against the defendants named in the lawsuit styled Acceptance Loan Company Inc., First United Security Bank and United Security Bancshares, Inc. v. The Cincinnati Insurance Company, et al., filed in the Circuit Court of Clarke County, Alabama on December 18, 2009, Case No. 16-CV-2009-900168.00.

The USB Companies filed the lawsuit to seek recovery under a fidelity insurance policy and bond issued by The Cincinnati Insurance Company, which policy provides coverage for losses due to the dishonest or fraudulent conduct of employees of the USB Companies.  Acceptance Loan Company, Inc. originally submitted a claim under the policy in connection with the loan irregularities discovered during the second quarter of 2007 resulting from the fraudulent conduct of certain ALC employees.

Pursuant to the settlement agreement, The Cincinnati Insurance Company agreed to pay to the USB Companies the sum of $4,150,000.  In exchange, the USB Companies agreed to dismiss, with prejudice, each of the defendants from the lawsuit and to release the defendants from all claims asserted or that may have been asserted against the defendants in the lawsuit.  The parties will be responsible for their own attorneys' fees and costs arising from the lawsuit, with the costs of mediation in the proceeding to be shared equally by the USB Companies and The Cincinnati Insurance Company.

"We are very pleased with the settlement agreement that was reached with the insurance company," said Terry Phillips, President and Chief Executive Officer of United Security Bancshares, Inc.  "USBI has been very aggressive in pursuing all available recovery in connection with the ALC losses and thus far has been successful in doing so."

The settlement agreement concludes the lawsuit.  The USB Companies entered into the settlement agreement to avoid the expense and uncertainty of future litigation of the claims alleged in the lawsuit.

United Security Bancshares, Inc. is bank holding company that operates nineteen banking offices in Alabama through First United Security Bank.  In addition, the Company's operations include Acceptance Loan Company, Inc., a consumer loan company, and FUSB Reinsurance, Inc., an underwriter of credit life and credit accident and health insurance policies sold to the bank's and ALC's consumer loan customers.  The Company's stock is traded on the Nasdaq Capital Market under the symbol "USBI."

SOURCE United Security Bancshares, Inc.

The law firm of McCuneWright, LLP has filed for a preliminary injunction in United States District Court, Central District of California seeking an immediate order requiring Toyota to expand the Sudden Unintended Acceleration recalls.  

McCuneWright, which filed the first and leading class action lawsuit against Toyota to force the automaker to remedy the sudden unintended acceleration defects in all affected makes and models, is asking the court to issue a specific order requiring Toyota to provide a brake over-ride system on all Toyota models equipped with Electronic Throttle Control System -- intelligent ("ETCS-i") that have experienced significant numbers of sudden acceleration events.

The brake override system is a failsafe system that enables the onboard computer to detect when both the throttle and the brake are being activated simultaneously, recognize that there is an error in the signals it is receiving, and immediately return the throttle to idle.  It is an important failsafe system used by other vehicle manufacturers to keep a sudden unintended acceleration event from turning into a runaway vehicle with resulting crashes, injuries, and deaths.

Toyota has recently announced that it will install this important safety device on all new Toyota and Lexus vehicles.  In its November 26, 2009, recall, Toyota also announced that it would retroactively install this important safety device on just six existing models and further limited the recall to only recent model years -- 2007 -- 2010 Toyota Camry, 2005 -- 2010 Toyota Avalon, 2007 -- 2010 Lexus ES 350, 2007 2010 Lexus GS 350, 2006 -- 2010 Lexus IS 250, and 2006 2010 Lexus IS 350.

The preliminary injunction motion asserts that by limiting this brake over-ride system recall to recent model years for just six vehicle models, Toyota has left more than 75 percent of the affected models and model years out of this important recall.

"Toyota cannot justify limiting this important recall to models and model years that include less than 25 percent of the reported sudden acceleration problems," says Richard McCune, a partner at McCuneWright, LLP. "Toyota has identified an important solution to this problem and it has a duty to its customers and to public safety the apply it to all the Toyota vehicles. Toyota shouldn't wait until there's another deadly crash."

On November 5, 2009, McCuneWright filed the first and leading class action on sudden unintended acceleration, Choi, et. al. v. Toyota Motor Company, et. al. CV 09-08143 AHM (FMOx), in United States District Court, Central District of California.  The preliminary injunction and supporting exhibits can be found on the Court's website or is available at www.mccunewright.com/toyota.

SOURCE McCuneWright, LLP