Ex-Detroit Pension Trustee Gets 11 Years in Prison
Jeffrey Beazley, a former treasurer of the city of Detroit, Michigan, has been sentenced to 11 years behind bars for getting kickbacks and bribes from businessmen who received hundreds of millions of dollars from two of the city’s pension systems. Beasley, a former fraternity brother of ex-Detroit Mayor Kwame Kilpatrick, was treasurer of the city from 2006 until September 2008. He was in charge of both pension systems and served as trustee for the city’s Police and Fire Retirement System and General Retirement System.
The two pension systems serve over 30,000 pensioners, city employees, and beneficiaries. The kickbacks and bribes were part of a wider corruption scam involving Kilpatrick and others and cost the pensions over $97 million. The former mayor is serving 28-years behind bars for his role. A jury found Beasley guilty of bribery, extortion, and fraud conspiracy.
The Bill and Melinda Gates Foundation Trust Sues Petrobras and Its Auditor
The Bill and Melinda Gates Foundation Trust, which is the trust that oversees the $41 billion endowment of the couple’s foundation, has filed a lawsuit accusing Brazil’s Petróleo Brasileiro SA (Petrobras) and its auditor of involvement in a widespread corruption scam. The trust claims they lost millions of dollars because of the scheme. WGI Emerging Markets Fund, LLC, which managed investments for the Gates trust, is a co-plaintiff.
While other plaintiffs have also sued Petrobras, the oil company remains adamant that it was the victim of bribery and a bid rigging plot involving a few company insider and suppliers. Among US investors that have filed over a dozen complaints are those that purchased Petrobras-sold American depositary receipts. These plaintiffs include the Rhode Island city of Providence, public pension funds in Hawaii and Idaho, and the Attorney General of Ohio.
The Gates Trust believes that the scheme impacted over $80 billion in contracts. This year, Standard & Poor’s and Moody’s Investors Service downgraded Petrobras’s credit rating to junk status.
First Bank of Utah to Pay $5M Related to Alleged Retirement Fund Fraud
The First Bank of Utah and its insurer, Everest National Insurance Co., will pay over $5 million to resolve claims related to its purported handling of funds from the American Pension Services of Riverton. The owner of APS has been accused of taking $24 million from retirement accounts.
The Securities and Exchange Commission sued APS and owner Curtis DeYoung in 2014, contending that the latter took the money from the accounts of individuals with 401(k) retirement accounts and self-directed IRAs. Federal law prohibited DeYoung from offering investment advice or directing the funds to investments without getting instructions in writing from the owners. He settled with the regulator, admitting to appropriating over $19 million. The money had gone into loans, investments with friends, DeYoung’s own salary and his wife’s salary.
First Bank of Utah was the custodian of the APS funds custodian. It is accused of negligent oversight of DeYoung. While the bank has denied liability it agreed to settle in the wake of lengthy mediation and negotiations. It will pay $2 million to the court-appointed trustee now in charge of American Pension Funds. Insurer Everest National Insurance Co. will pay $3 million. A district judge still has to approve the settlement.
Kwame Kilpatrick pal gets 11-year prison stint for corruption convictions, MLive.com, September 22, 2015
Bank, insurer to pay $5m in case of missing Utah retirement funds, The Salt Lake Tribune, September 24, 2015
Bill and Melinda Gates Foundation Trust Sues Petrobras, Auditor for Fraud, The Wall Street Journal, September 27, 2015