Ex-NYC union chief loses bribery appeal; hedge fund exec wins resentencing

By Jonathan Stempel

NEW YORK (Reuters) – A federal appeals court on Tuesday upheld the bribery conviction of Norman Seabrook, the once-powerful head of New York City’s correction officers’ union, and ordered the re-sentencing of a former hedge fund executive on a related guilty plea.

Seabrook, who led the Correction Officers’ Benevolent Association, was appealing his August 2018 conviction and 58-month sentence for steering $20 million of union members’ money to the hedge fund firm Platinum Partners, which prosecutors said he knew was risky, in exchange for a $60,000 cash bribe delivered in a Salvatore Ferragamo bag.

The 2nd U.S. Circuit Court of Appeals in Manhattan rejected Seabrook’s arguments that it was too prejudicial for jurors to have been told the union lost money on its investment, and that U.S. District Judge Alvin Hellerstein, who oversaw Seabrook’s trial, appeared biased toward prosecutors.

Platinum’s main hedge funds went bankrupt in 2016 and the union, which said it has about 18,000 active and retired members, lost $19 million of its investment.

In a related ruling, the appeals court set aside the 2-1/2 year prison term for Platinum co-founder Murray Huberfeld, who pleaded guilty to a conspiracy charge, and reversed an order that he pay $19 million in restitution to the union.

The court said Hellerstein mistakenly took into account an uncharged bribery scheme the government dropped in exchange for the guilty plea, and that it was not “confident” Huberfeld would get the same sentence again.

It also said the union was not a “victim” of Huberfeld’s criminal conduct because it invested with Platinum before that conduct occurred, and therefore did not qualify for restitution.

Lawyers for Seabrook and Huberfeld declined to comment. The union and a spokesman for Acting U.S. Attorney Audrey Strauss in Manhattan did not immediately respond to requests for comment.

The cases are U.S. v. Seabrook et al, 2nd U.S. Circuit Court of Appeals, Nos. 19-436, 19-472, 20-1918.

(Reporting by Jonathan Stempel in New York; Editing by Richard Chang)

GM asks judge to reinstate racketeering case against rival Fiat Chrysler

By Nick Carey and Sanjana Shivdas

(Reuters) – General Motors Co. on Monday asked a U.S. federal judge to reinstate a racketeering lawsuit against Fiat Chrysler Automobiles NV (FCA), saying it has new information on foreign accounts used in an alleged bribery scheme involving its smaller rival and union leaders.

In its filing to U.S. District Judge Paul Borman, GM says the scheme, which it alleges occurred between FCA executives and former United Auto Workers (UAW) leaders, “is much broader and deeper than previously suspected or revealed as it involved FCA Group apparently using various accounts in foreign countries … to control corrupt individuals by compensating and corrupting those centrally involved in the scheme to harm GM.”

Last month, Borman threw out the racketeering lawsuit, saying the No. 1 U.S. automaker’s alleged injuries were not caused by FCA’s alleged violations.

GM alleged FCA bribed UAW officials over many years to corrupt the bargaining process and gain advantages, costing GM billions of dollars. GM was seeking “substantial damages” that one analyst said could have totaled at least $6 billion.

“These new facts warrant amending the court’s prior judgment, so we are respectfully asking the court to reinstate the case,” GM said in a statement.

“FCA will continue to defend itself vigorously and pursue all available remedies in response to GM’s attempts to resurrect this groundless lawsuit,” FCA said in a statement.

In affidavits accompanying GM’s filing, attorneys for the automaker said “reliable information concerning the existence of foreign bank accounts” used in the alleged scheme had only come to light recently.

“The UAW is unaware of any allegations regarding illicit off-shore accounts as claimed,” by GM, the UAW said in a statement. “If GM actually has substantive information supporting its allegations, we ask that they provide it to us so we can take all appropriate actions.”

(Reporting by Sanjana Shivdas in Bengaluru; Editing by Shailesh Kuber, Aurora Ellis and Steve Orlofsky)

Netanyahu charged in corruption cases, deepening Israeli political disarray

By Jeffrey Heller and Dan Williams

JERUSALEM (Reuters) – Israeli Prime Minister Benjamin Netanyahu was indicted on corruption charges on Thursday, heightening uncertainty over who will ultimately lead a country deep in political disarray after two inconclusive elections this year.

The decision announced by Attorney General Avichai Mandelblit was the first of its kind against a serving Israeli prime minister and represented Netanyahu’s gravest crisis of his lengthy political career.

He was charged with breach of trust and fraud in all three corruption cases against him, as well as bribery in one of the investigations, according to a charge sheet released by the Justice Ministry.

Netanyahu, in power since 2009, has dominated Israeli politics for a generation and is the country’s longest-serving leader. He has denied wrongdoing in the three corruption cases, saying he is the victim of a political witch hunt.

He is under no legal obligation to resign after being charged. The opening of a trial could be delayed for months by a new election and any moves by the right-wing prime minister to seek parliamentary immunity from prosecution.

Netanyahu, 70, was due to make a statement from his official residence at 2030 GMT.

Earlier, during one of the most unusual days in Israeli political history, the country’s president told lawmakers to name a candidate to form a new government after right-winger Netanyahu and centrist challenger Benny Gantz both failed, a development that probably sets the stage for a third election within a year.

“These are harsh dark days in the annals of the State of Israel,” President Reuven Rivlin said as he announced that Gantz had not mustered enough support for a stable coalition.

Police recommended in February that Mandelblit file criminal charges against Netanyahu in the long-running investigations dubbed Cases 1000, 2000 and 4000.

Netanyahu is suspected of wrongfully accepting $264,000 worth of gifts, which prosecutors said included cigars and champagne, from tycoons and of dispensing favors in alleged bids for improved coverage by Israel’s biggest selling newspaper, Yedioth Ahronoth, and the Walla website.

Netanyahu could face up to 10 years in prison if convicted of bribery and a maximum 3-year term for fraud and breach of trust.

Even though he was under suspicion, that was not enough to dissuade most of his traditional allies from sticking with him in coalition negotiations, effectively blocking Gantz’s path to the premiership.

But the two elections that neither Netanyahu nor Gantz won exposed a rare political vulnerability in the prime minister after a decade in office.

The prolonged political stalemate comes at a tricky time for Israel and its most prominent statesman on the domestic and international fronts.

Its conflict with arch-foe Iran has deepened – Israeli warplanes hit Iranian targets in Syria on Wednesday after rockets were fired toward Israel – while fighting with Palestinian militants in Gaza flared last week.

The introduction of criminal charges could further complicate the eventual rollout of the U.S. administration’s long-delayed Middle East peace plan by imperiling the political future of one of the key players whose support is needed.

(Editing by Stephen Farrell and Giles Elgood)

Students tied to U.S. college admissions scandal could face expulsion

FILE PHOTO: A sign is pictured on the grounds of University of Southern California in Los Angeles, California, U.S., March 13, 2019. REUTERS/Mario Anzuoni

By Gabriella Borter

(Reuters) – The University of Southern California said it may expel students linked to the largest college-admissions cheating scandal in U.S. history after it completes a review of their records.

The school said on Monday night that it has already “placed holds on the accounts of students who may be associated with the alleged admissions scheme,” preventing them from registering for classes or acquiring transcripts.

“Following the review, we will take the proper action related to their status, up to revoking admission or expulsion,” the college said in a tweet on Monday night.

The move would affect the daughters of “Full House” actress Lori Loughlin and fashion designer Mossimo Giannulli. The parents were among 50 people charged last week with participation in what federal prosecutors called a $25 million bribery and fraud scam.

The mastermind of the scheme last week pleaded guilty to racketeering charges for bribing coaches, cheating on standardized tests and fabricating athletic profiles to help children of wealthy families gain admission to top universities including Yale, Stanford and Georgetown.

A spokesman for Georgetown on Tuesday said the school would not comment on disciplinary action against individual students linked to the scandal but added that it is “reviewing the details of the indictment, examining our records, and will be taking appropriate action.”

Yale, UCLA, and the University of Texas said last week that any students found to have misrepresented any part of their applications may have their admission rescinded. Stanford said it is “working to better understand the circumstances around” one of its students linked to the scheme.

Wake Forest’s president said in a statement last week, “We have no reason to believe the student was aware of the alleged financial transaction.”

Prosecutors said some students involved in the scandal were not aware that their parents had made the alleged arrangements, although in other cases they knowingly took part. None of the children were charged.

Several celebrities and corporate executives charged in the scandal have already felt career consequences.

The Hallmark cable channel last week cut ties with Loughlin for her alleged role in the fraud.

(Reporting by Gabriella Borter in New York; Editing by Jeffrey Benkoe and Steve Orlofsky)

Amazon investigating claims of employees leaking data for bribes

FILE PHOTO: The logo of the web service Amazon is pictured in this June 8, 2017 illustration photo. REUTERS/Carlos Jasso/Illustration/File Photo

(Reuters) – Amazon.com Inc said on Monday it was investigating suspected internal leaks of confidential information by its employees for bribes to remove fake reviews and other seller scams from its website.

Amazon employees are offering internal data and other classified information through intermediaries, to independent merchants selling their products on the site to help them boost sales in return for payments, the Wall Street Journal reported on Sunday, citing sources.

The practice, which is a violation of the company’s policy, is particularly strong in China, the report added, as the number of sellers there are soaring.

“We hold our employees to a high ethical standard and anyone in violation of our code faces discipline, including termination and potential legal and criminal penalties,” a company spokesperson told Reuters.

Brokers for Amazon employees in Shenzhen are offering internalĀ salesĀ metrics and reviewers’ email addresses, as well as a service to delete negative reviews and restore banned Amazon accounts in exchange for payments ranging from about $80 to more than $2,000, the WSJ report said.

The e-commerce giant is also investigating a number of cases involving employees, including some in the U.S., suspected of accepting these bribes, according to the Journal report.

(Reporting by Arjun Panchadar in Bengaluru; Editing by Shounak Dasgupta)

‘Makes me shake with rage’: Japan probe shows university cut women’s test scores

Tetsuo Yukioka (L), Managing Director of Tokyo Medical University and Keisuke Miyazawa, Vice-President of Tokyo Medical University, bow as they attend a news conference in Tokyo, Japan August 7, 2018. REUTERS/Toru Hanai

By Elaine Lies

TOKYO (Reuters) – A Japanese medical school deliberately cut women’s entrance test scores for at least a decade, an investigation panel said on Tuesday, calling it a “very serious” instance of discrimination, but school officials denied having known of the manipulations.

Prime Minister Shinzo Abe has made a priority of creating a society “where women can shine”, but women in Japan still face an uphill battle in employment and face hurdles returning to work after childbirth, a factor behind a falling birthrate.

The alterations were uncovered in an internal investigation of a graft accusation this spring regarding the entrance exam for Tokyo Medical University, sparking protests and anger.

Lawyers investigating bribery accusations in the admission of the son of a senior education ministry official said they concluded that his score, and those of several other men, were boosted “unfairly” – by as much as 49 points, in one case.

They also concluded that scores were manipulated to give men more points than women and thus hold down the number of women admitted since school officials felt they were more likely to quit the profession after having children, or for other reasons.

“This incident is really regrettable – by deceptive recruitment procedures, they sought to delude the test takers, their families, school officials and society as a whole,” lawyer Kenji Nakai told a news conference.

“Factors suggesting very serious discrimination against women was also part of it,” added Nakai, one of the external lawyers the university hired to investigate the incident.

The investigation showed that the scores of men, including those reappearing after failing once or twice, were raised, while those of all women, and men who had failed the test at least three times, were not.

The lawyers said they did not know how many women had been affected, but it appeared that women’s test scores had been affected going back at least a decade.

At a news conference, senior school officials bowed and apologized, pledging to “sincerely” consider their response, such as possible compensation. However, they said they had been unaware of the manipulation.

“Society is changing rapidly and we need to respond to that and any organization that fails to utilize women will grow weak,” said Tetsuo Yukioka, the school’s executive regent and chair of its diversity promotion panel.

“I guess that thinking had not been absorbed.”

No immediate comment was available from the government or the education ministry official who figures in the case.

Entrance exam discrimination against women was “absolutely unacceptable”, Education Minister Yoshimasa Hayashi told reporters last week.

Reports of the incident set off a furor in which women recounted their own experiences of discrimination on social media with the hashtag, “It’s okay to be angry about sexism.”

Some referred to the potential costs exacted in a rapidly aging society.

“I’m 29 and will probably never get married,” said one poster.

“Women are pitied if they don’t, but Japanese women who are married and working and have kids end up sleeping less than anybody in the world. To now hear that even our skills are suppressed makes me shake with rage.”

Another said, “I ignored my parents, who said women don’t belong in academia, and got into the best university in Japan. But in job interviews, I’m told ‘If you were a man, we’d hire you right away.’

“My enemy wasn’t my parents, but all society itself.”

(Reporting by Elaine Lies, additional reporting by Tim Kelly; Editing by Clarence Fernandez)

Venezuela’s Maduro defies foreign censure, offers ‘prize’ to voters

Venezuela's President Nicolas Maduro speaks during a campaign rally in La Guaira, Venezuela May 2, 2018. REUTERS/Carlos Garcia Rawlins

By Vivian Sequera and Andrew Cawthorne

CARACAS (Reuters) – President Nicolas Maduro scoffed at international criticism of Venezuela’s upcoming May 20 vote in which he is seeking re-election and offered a prize for those who vote with a state-issued card.

Venezuela’s mainstream opposition is boycotting the election on the grounds it is rigged in favor of the 55-year-old socialist incumbent. The United States, European Union and various Latin American neighbors have also slammed it as unfair.

“So they’re not going to recognize Maduro around the world. What the hell do I care?” Maduro said at an election rally in La Guaira, on the coast outside Caracas, late on Wednesday. “What the hell do I care what Europe and Washington say?”

Maduro, who is casting his re-election campaign as a battle against imperialist powers bent on seizing Venezuela’s oil wealth, has only one serious rival: Henri Falcon, 56, a former state governor. Falcon has broken with the opposition coalition’s boycott of the vote, believing anger at a economic crisis will win him votes.

OPEC member Venezuela is in a fifth year of punishing recession, inflation is the highest in the world, oil production is at a three-decade low, shortages of food and medicines are widespread, and millions are skipping meals.

Some polls show Falcon more popular than Maduro, who narrowly won election to replace Hugo Chavez in 2013.

But the opposition abstention campaign, presence of Maduro loyalists in key institutions including the election board, and vote-winning power of state welfare programs like housing and food giveaways makes a Falcon victory look a tall order.

In his speech, Maduro told supporters that all those who vote showing a government-issued “Fatherland Card,” which is needed to access certain welfare programs, probably would receive “a really good prize.”

He did not give details but critics say that, and other pre-election cash and other bonuses via the card, is akin to vote bribery. Voting in Venezuela is secret but state workers say they are constantly pressured to support the government.

FALCON SEEKS ALLIES

Falcon, a former soldier, has been largely shunned by Venezuela’s best-known opposition leaders but this week received the support of at least one high-profile leader, Enrique Marquez, who is vice president of A New Time party.

He also has been wooing twice-presidential candidate Henrique Capriles to join his campaign but without success so far. Capriles, and another popular opposition leader, Leopoldo Lopez, are both barred from standing in the election.

Maduro says Venezuela’s election system is the cleanest in the world but even the official operator of the voting platform, UK-based Smartmatic, denounced fraud in an election last August. Little is known about the Argentine company that has replaced it for this month’s election.

If Maduro does win re-election, attention will turn immediately to whether he plans to use the political breathing space to deepen an internal purge of rivals, and if the United States will carry out a threat to impose oil sanctions.

President Donald Trump’s administration already has imposed some financial and individual sanctions on Maduro’s government, accusing senior officials of rights abuses and corruption.

Pro-boycott opposition activists have been stepping up their campaign in recent days with scattered protests around the country. Numbers, however, have been thin – a far cry from the mass anti-Maduro protests of 2017.

“Those who participate with Maduro in the May 20 farce, including Henri Falcon and (evangelical pastor) Javier Bertucci, have split with Venezuelan patriots and democrats,” an opposition grouping called the Wide Front said in a statement.

“By recognizing false results, they will become a collaborationist opposition recognized by the regime so it can outlaw and persecute democratic society.”

(Additional reporting by Andrew Cawthorne; Writing by Andrew Cawthorne; Editing by Bill Trott)

Call from Trump interrupts Israeli police questioning Netanyahu

Israeli Prime Minister Benjamin Netanyahu attends the weekly cabinet meeting at his office in Jerusalem March 5, 2017. REUTERS/Abir Sultan/Pool

By Luke Baker

JERUSALEM (Reuters) – A phone call from U.S. President Donald Trump interrupted a police inquiry into Israeli Prime Minister Benjamin Netanyahu, who was on Monday being questioned for a fourth time over suspicions of corruption.

Not long after sitting down with police investigators at his residence in Jerusalem, one aide said, Netanyahu briefly excused himself to speak with Trump.

“The two leaders spoke at length about the dangers posed by the nuclear deal with Iran… and about the need to work together to counter those dangers,” Netanyahu’s office said in a statement issued just before details of the police probe led prime time news.

Netanyahu, 67, is a suspect in two cases, one involving the receipt of gifts from businessmen and the other related to conversations he held with an Israeli newspaper publisher about limiting competition in the news sector in exchange for more positive coverage.

No charges have been brought against Netanyahu, who has been in power since 2009 and has denied wrongdoing.

A police spokeswoman said a statement would be released after the session. “We are in the final stages,” Police chief Roni Elsheich told reporters earlier about the investigation.

Once it is complete, police will decide whether to drop the case or recommend the attorney general bring charges.

As speculation bubbles, politicians from across the spectrum have begun maneuvering, believing early elections will probably have to be called if Netanyahu is indicted.

Such a move would most likely lead to his resignation – in 1993 the Supreme Court set a precedent for ministers to step down if they are charged with corruption.

It is possible someone from his Likud party could replace Netanyahu without a new vote, but many analysts think it unlikely, predicting an election would have to be called for September or November, depending on developments.

The opposition Labour party will hold primaries in July, former defense minister Moshe Yaalon has launched his own party and Avi Dichter, the former head of the Shin Bet intelligence agency and a senior member of Likud, said on Saturday he would consider running for the party leadership.

“I am here to lead and will undoubtedly run for Likud leadership and the premiership,” Dichter was quoted as saying, comments his spokesman said were not a challenge to Netanyahu and referred to future primaries.

SHAKE-UP?

To analysts, the rumblings are clear and foreshadow change after 20 years of Netanyahu dominating the landscape.

“Active politicians and those on the benches waiting to enter, all of them have concluded that early elections are coming because of the investigation,” Menachem Klein, a politics professor at Bar-Ilan University, told Reuters.

“They are starting to prepare themselves.”

Opinion polls show Yair Lapid, the head of the centrist Yesh Atid party, as the strongest candidate for prime minister if Netanyahu goes, but there are a host of others nipping at his heels. Other polls show Netanyahu remains the most popular politician.

In recent weeks, Netanyahu has visited Britain, the United States and Australia. Trips are planned to Russia, China and India. Some critics suggest the travel is a way of delaying questioning. Others say it is about appearing statesman-like.

“His junkets to far-flung places and visits with the leaders of world powers are intended to persuade Israelis that he’s the be-all and end-all,” columnist Yossi Verter wrote in Haaretz. “The deeper the investigations, the more he’ll be in the air.”

Netanyahu’s opponents name a number of party rivals bidding to replace him, including Public Security Minister Gilad Erdan, Culture Minister Miri Regev and Transport Minister Yisrael Katz. Naftali Bennett of the far-right Jewish Home is seen as someone who could switch to Likud to try to lead.

(Additional reporting by Jeffrey Heller; Editing by Robin Pomeroy and John Stonestreet)