Things to Keep an Eye On
Tom Goldstein indictment, DOJ sues KKR, SEC sues Musk, DHS sanctions Chinese solar panels, DOJ sues Walgreens, new CFPB and FTC actions
My FOIA request for Sheldon Adelson’s FBI records got a response this week, with the FBI telling me they would post the first batch to the Vault. The file in question is 319 blank pages. We know he was investigated in 2012, and concerns about the Macau-U.S. cash flow leading to Chinese problems were raised by none other than John McCain, which is one reason Adelson backed Mitt Romney. He also probably backed Romney because Las Vegas is a historic nexus of Mormons and gangsters.
It’s probably too soon to tell, but Bloomberg doing a big story on Howard Lutnick’s enthusiasm for Tether, which, it’s true, is a favored asset of criminals, seems like a bit of a shot across the bow.
SCOTUSblog publisher indicted
Via Politico:
The publisher of a prominent blog about the Supreme Court was indicted Thursday in a multimillion-dollar scheme to evade federal income taxes and use money from his law firm to cover gambling debts from high-stakes poker games.
SCOTUSblog publisher Tom Goldstein, who also has argued 44 cases before the high court, took part in poker games in Beverly Hills, Asia and elsewhere involving millions of dollars, hid winnings, concealed losses and misrepresented expenses, according to the 22-count indictment filed in federal court in Maryland.
The indictment can be read here, it’s really something. He was doing some gambling in Macau.
DOJ sues KKR
KKR is a great example of “Chisrael,” when you look at a guy like Henry Kravis. He did a lot of business in China, and backed the post-9/11 wars to the hilt. The DOJ is suing them:
The Justice Department today filed a civil lawsuit against KKR & Co. Inc. and over a dozen of its investment advisors and funds (collectively, KKR) for repeatedly flouting the premerger antitrust review process. Filed in the U.S. District Court for the Southern District of New York, the complaint alleges that KKR senior executives, deal teams and investment funds evaded antitrust scrutiny for at least 16 separate transactions by failing to comply with the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).
“KKR’s rinse-and-repeat failures to provide complete and accurate information about its mergers and acquisitions were systemic,” said Acting Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “Through document omissions, alterations, and failures to report deals, KKR threatened the integrity of the Division’s premerger reviews and, in some cases, obscured the market impact of its deals and serial acquisitions.”
New restrictions on AI chips
One of the Biden admin’s better outgoing moves:
The U.S. government said on Monday it would further restrict artificial intelligence chip and technology exports, divvying up the world to keep advanced computing power in the United States and among its allies while finding more ways to block China's access.
The new regulations will cap the number of AI chips that can be exported to most countries and allow unlimited access to U.S. AI technology for America's closest allies, while also maintaining a block on exports to China, Russia, Iran and North Korea.
Brazil’s Supreme Court denies restoration of Bolsonaro’s passport
He won’t be making the inauguration:
Brazil’s Supreme Court on Thursday denied a request by former President Jair Bolsonaro to temporarily restore his passport so that he could attend the inauguration in Washington of U.S. President-elect Donald Trump next week.
Justice Alexandre de Moraes, who Bolsonaro frequently has called his personal foe, said in the ruling that Bolsonaro currently holds no position that would allow him to represent Brazil at the event and that the former president did not adequately prove to the court that he had been invited.
Two Iranian Supreme Court judges assassinated
From Saturday:
Two senior Iranian judges have been shot dead in an apparent assassination in thecountry's supreme court.
Ali Razini and Mohammad Moghiseh were killed after a gunman entered the court, in the capital Tehran, on Saturday morning.
The attacker killed himself while fleeing the scene, according to the judiciary's news website, Mizan. A bodyguard was also injured in the attack.
Another big indictment in Mormon country
Utah is full of this stuff, there’s a new book by Ron Stallworth out now about his time looking into organized crime in the heartland of the Latter-day Saints:
Jose Manuel Perez-Flores, 36, of West Valley City, Utah; Victor Flores Esquivel, 48, of West Valley City; Jaime Hernandez-Ruin, 26, of West Valley City; and Eduardo Hernandez-Ruiz, 28, of Murray, Utah, were initially charged by complaint and taken into custody on December 23, 2024. A federal grand jury in Salt Lake City returned an indictment January 8, 2025.
According to court documents, since approximately September 2024, detectives with the Utah County Major Crimes Task Force (UCMC) began investigating a group believed to be distributing large amounts of heroin and fentanyl throughout Salt Lake County. During the investigation, detectives conducted several controlled purchases of heroin. Following the controlled purchases, detectives obtained and executed search warrants on three residences on December 16, 2024. During one of the search warrants in West Valley City, detectives seized 436 grams of fentanyl (approximately 4,360 individual pills), 200 grams of heroin, $1,592 in cash, drug packaging material, and a digital scale. In a separate area of the residence, detectives also seized, 309 grams of fentanyl pills (approximately 3,090 individual pills), 26 grams of heroin, and $1,041 in cash. Multiple electronic money wire transfer receipts, and cellular phones were also seized from the residence.
DHS sanctions Chinese solar panel companies over Xinjiang slave labor
Cotton and polysilicon are two of Xinjiang’s main exports, and the latter is used in the mid-quality solar panels that have taken over much of the world’s market. These sanctions may drive up the price, but they’ll also allow room for new Western entrants into the market:
Today, the Department of Homeland Security (DHS), on behalf of the Forced Labor Enforcement Task Force (FLETF), announced the addition of 37 entities to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, marking the largest single expansion of the list to date. Among entities added are a large supplier of critical minerals and one of the world’s largest textile manufacturers, both linked to forced labor practices in the People’s Republic of China (PRC). This addition brings the total number of entities on the UFLPA Entity List to 144, representing significant progress in three years since the law was passed. These significant efforts reflect the Biden-Harris Administration’s commitment to eliminating forced labor from our global supply chains and protecting U.S. consumers and businesses from tainted goods.
“In adding 37 companies to the UFLPA Entities List and bringing the total to nearly 150, we again demonstrate our relentless fight against the cruelty of forced labor, our unwavering commitment to basic human rights, and our tireless defense of a free, fair, and competitive market,” said Secretary of Homeland Security Alejandro N. Mayorkas.
SEC sues Elon Musk
What turns up in a lot of these lawsuits and agency complaints is going to be the substance of the fights between the various oligarchs jockeying for position around Trump in his second term, it’s something to watch very closely. The question with Musk here is whether these purchases were backed up by some of the other shady characters who are now shareholders:
The SEC filed a lawsuit against Elon Musk on Tuesday, alleging the billionaire violated securities law in 2022 by failing to disclose he had amassed an active stake in Twitter, a secrecy that allowed him to buy shares at “artificially low prices.”
Musk, who is also CEO of Tesla and SpaceX, purchased Twitter for $44 billion in late 2022 and changed the name to X the following year. Prior to the acquisition, he’d built up a position in the company of greater than 5%, which would’ve required disclosing his holdings to the public within 10 calendar days of reaching that threshold.
Fake PAC indictment
We’ve got a guilty plea in the Piaro case, a little more than a week ago:
From at least in or about 2017 up to and including at least in or about December 2022, PIARO was the treasurer and operator of four PACs: Americans for the Cure of Breast Cancer, the Association for Emergency Responders & Firefighters, the US Veterans Assistance Foundation, and Standing By Veterans (the “PIARO PACs”). PIARO raised millions of dollars from hundreds of thousands of donors nationwide through false statements and misrepresentations about how contributions to the PIARO PACs would be spent. For example, at PIARO’s direction, the PIARO PACs misrepresented to donors that donations would be used to advance specific legislation, educate lawmakers, and conduct and fund research, when PIARO did not and did not intend to follow through on those representations.
DOJ sues Walgreens
Following on the heels of the CVS suit:
In a civil complaint filed yesterday in the U.S. District Court for the Northern District of Illinois, the Justice Department alleges that Walgreens Boots Alliance, Walgreen Co. and various subsidiaries (collectively, Walgreens) dispensed millions of unlawful prescriptions in violation of the Controlled Substances Act (CSA) and then sought reimbursement for many of these prescriptions from various federal health care programs in violation the False Claims Act (FCA). Walgreens is one of the country’s largest pharmacy chains, with over 8,000 pharmacies across the United States.
“This lawsuit seeks to hold Walgreens accountable for the many years that it failed to meet its obligations when dispensing dangerous opioids and other drugs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Our complaint alleges that Walgreens pharmacists filled millions of controlled substance prescriptions with clear red flags that indicated the prescriptions were highly likely to be unlawful, and that Walgreens systematically pressured its pharmacists to fill prescriptions, including controlled substance prescriptions, without taking the time needed to confirm their validity. These practices allowed millions of opioid pills and other controlled substances to flow illegally out of Walgreens stores.”
High Times chairman to plead guilty
One to watch:
The founder and chairman of Hightimes Holding Corp., the company that publishes High Times magazine, has agreed to plead guilty to joining a criminal conspiracy to pay more than $150,000 in undisclosed compensation to an analyst for an investment newsletter that touted its stock and assisted Hightimes in raising at least $6 million.
Adam Levin, 45, of Marina Del Rey, was charged last month with one count of conspiracy to tout securities for undisclosed compensation. In a plea agreement filed December 20, Levin agreed to plead guilty to that felony offense.
Levin is scheduled to appear January 14 in United States District Court to make his initial appearance in this case.
FDA bans Red 3
Via AP:
U.S. regulators on Wednesday banned the dye called Red 3 from the nation’s food supply, nearly 35 years after it was barred from cosmetics because of potential cancer risk.
Food and Drug Administration officials granted a 2022 petition filed by two dozen food safety and health advocates, who urged the agency to revoke authorization for the substance that gives some candies, snack cakes and maraschino cherries a bright red hue.
Fairfax quiet about PowerSchool data breach
Via Fairfax Times:
FBI’s cybersecurity teams are investigating the hacking. According to accounts of the cyber-steal, PowerSchool, based in Folsom, Calif., paid a “ransom” to the hackers, who promised to delete the data. Technology experts worldwide have been scouring the Dark Web this past week to see if the guarantee holds true. Schools from Maine to California have been notifying their communities about the breach's impact on their school districts.
The silence by the leaders at Fairfax County Public Schools raises many unanswered questions for parents, staff and community members and resurrects concerns about transparency in a school district with a massive $3.8 billion budget and salaries for executives on the superintendent’s team that run over $200,000. In a terse statement, Fairfax County Public Schools spokeswoman Julie Allen said the school’s Student Information System, known as “SIS,” wasn’t impacted.
“There has been zero impact. To be clear, the breach did not impact FCPS in any way," said Allen. "The data breach is with PowerSchool SIS. FCPS does not use PowerSchool SIS.” Allen didn’t respond to questions about PowerSchool systems that FCPS does use. She also didn’t answer why Reid didn’t issue a statement about the hacking of PowerSchool data.
Incoming Missouri Gov. plans tough-on-crime measures
Missouri needs it:
Within minutes of his inauguration Monday, new Missouri Gov. Mike Kehoe is expected to issue a variety of orders targeting crime. The tone-setting move reflects a national trend.
After a period of relaxed sentencing laws, a tough-on-crime approach is back in political favor in the U.S.
Republicans and Democrats alike are promoting anti-crime initiatives as a new year of lawmaking gets underway in state capitols. That comes after voters in several states approved ballot measures in the fall imposing stricter penalties for crimes ranging from shoplifting to deadly drug dealing.
CFPB: Capital One cheated customers out of $2 billion in interest payments
Interest for bankers but not their depositors:
Capital One was sued by the Consumer Financial Protection Bureau for allegedly misleading consumers about its offerings for high-interest savings accounts. As a result, customers lost more than $2 billion in potential interest payments, the lawsuit claims.
In a complaint filed Tuesday, the Consumer Financial Protection Bureau took aim at Capital One's promises and handling of its "360 Savings" accounts, which were promoted as accounts providing one of the highest interest rates in the nation. But instead, the CFPB alleges, Capital One froze its rate at a low level for at least several years, even as rates rose nationally.
Jack Dorsey’s Block to pay $175 million in CFPB settlement
Some of that money goes to the people harmed, some is a penalty:
Jack Dorsey’s Block Inc. will pay up to $175 million for failing to investigate and protect Cash App customers from fraudulent transactions under a settlement with the Consumer Financial Protection Bureau.
Oakland, Calif.-based Block put weak security protocols on its Cash App digital payment service and conducted incomplete investigations when customers reported fraud, the CFPB said in a Thursday consent order.
FTC proposed order for GoDaddy
This blog has had a domain mapping request on hold with Substack for months now, which is one reason traffic is a little low. Something’s going on with the domain hosts. Mike Benz’s family has a history of domain squatting, this is a racket with some history:
The Federal Trade Commission will require web hosting company GoDaddy to implement a robust information security program to settle charges that the company failed to secure its website-hosting services against attacks that could harm its customers and visitors to the customers’ websites.
The FTC alleges in its complaint that, since 2018, GoDaddy has failed to implement reasonable and appropriate security measures to protect and monitor its website-hosting environments for security threats, and misled customers about the extent of its data security protections on its website hosting services.
In its proposed settlement order, the FTC is requiring GoDaddy to establish a comprehensive data security program that is similar to those in other FTC cases, including the recent settlementwith Marriott International.
FTC and Colorado file complaint against Greystar over junk home rental fees
There’s a lot of this stuff in the rental market:
The Federal Trade Commission and the State of Colorado are taking action against Greystar, the nation’s largest multi-family rental property manager, for deceiving consumers about monthly rent costs by tacking on numerous mandatory fees on top of advertised prices.
According to the complaint filed by the FTC and Colorado, these hidden fees have cost consumers living in Greystar properties hundreds of millions of dollars since at least 2019, and consumers often have not discovered the fees until after they have signed a lease or moved in.
Hobbs Act extortion charges over public services in DC
This is dark stuff, extorting the poor:
Ruth Nivar, 57, a former D.C. Department of Human Services employee, pleaded guilty today in U.S. District Court to one count of Hobbs Act extortion under color of official right and to one count of conspiracy to commit Hobbs Act extortion under color of official right.
The plea was announced by U.S. Attorney Matthews M. Graves, FBI Office Special Agent in Charge Sean T. Ryan of the Washington Field Office Criminal and Cyber Division, and the District of Columbia Inspector General Daniel W. Lucas.
The charges stemmed from a years-long scheme in which Nivar extorted money from low and no-income individuals to process applications for public assistance programs, even though it was part of her job responsibilities to do so free of charge. Nivar took money herself from these low-income victims simply to apply for public assistance. U.S. District Court Chief Judge James E. Boasberg scheduled a sentencing hearing for April 25, 2025.