Jan 24, 2011 – The lawsuit filed by a former employee against the Newark-based global telecom IDT is over. J. Michael Jewett, who was an IDT executive, claimed in 2004 that he was fired for opposing bribes to Haitian officials. Lawyers for both sides agreed to drop the complaint and counterclaims in an accord filed with the U.S. District Court in Newark on January 13th. This has not been reported before now.
IDT spokesman Bill Ulrey said, “We have no comment…as usual. Thank you.” Jewett’s attorney William Perniciaro also declined to discuss the matter. When both sides don’t talk about an agreement to dismiss a case, that normally means a confidential settlement has been reached.
Sept 24, 2010 – Last Saturday, Barron’s ran my story in which IDT CEO Howard Jonas admitted for the first time a suspect deal with then Haitian President Jean-Bertrand Aristide that involved sending payments due Haiti to a law firm in the Turks and Caicos. Jonas told me the company had gotten a lawyer’s “ethics letter” clearing the deal. But he wouldn’t provide it.
A day before the story was to run, Barron’s got a call from a lawyer of the firm representing IDT in a lawsuit by former IDT executive D. Michael Jewett, who says the company fired him for objecting to the offshore deal. He promised to provide the ethics letter. It was the end of day, Friday. The magazine noted that promise when it published the next day.
Days later, the lawyer called to say he couldn’t provide the letter because it was sealed. Hard to believe: there is no sealing order for the letter in the case docket.
July 21, 2010 –
The global food services company Sodexo, which I exposed last year for exacting “rebates” from suppliers and charging clients full price, has agreed to a $20 million settlement with NY Attorney General for that illicit practice.
The American Interest, July-Aug 2010 (online May 18, 2010) -
As I write this, the U.S. Senate is debating a major financial reform bill in which the credit default swap, a kind of derivative, plays a significant part. An amendment to that bill, proposed by Senators Carl Levin (D-MI) and Jeff Merkley (D-OR), would ban banks from proprietary trading. There are a lot of high-rolling bankers who do not want that amendment to pass, because it will mess up their plans to repatriate foreign profits into the United States, untaxed, by trading in derivatives on their own accounts. The clearinghouse ICE Trust U.S. forms a central part of these plans.
What is ICE Trust U.S., and who owns it? ICE US Holding Co., which was established in 2008 as the parent of ICE Trust U.S., is located in the Cayman Islands. Yet none of the owners of ICE US Holding Co. are based in the Caymans. Among the owners of the Cayman’s company are Citigroup, Goldman Sachs, J.P. Morgan, Merrill Lynch and Morgan Stanley, which are headquartered in New York. Bank of America, which now owns Merrill Lynch, is based in Charlotte, North Carolina.
The Big Money, March 11, 2010 –
When the devastating earthquake hit Haiti in January, IDT, the New Jersey-based global phone company, moved fast to help.
It announced it was setting up calling stations at hotels and other sites so Haitians could use its Internet calling-service to reach family and friends around the world. It cut rates on its U.S. prepaid calling-card to 2 cents a minute to Haiti (at least for 12 days), donated 4,000 $2-prepaid calling-cards to Haitian community groups in New York and Florida, and said it would give some proceeds from prepaid calls to Haitian Red Cross relief.
Such a warm, fuzzy response from a U.S. corporation often wins plaudits, though, of course, IDT has a business interest in the impoverished island. In 2005, in its latest publicly available figures, the company reported $4 million in profits from $17 million in revenues for routing calls there.
portfolio.com, March 8, 2010 -
One year ago, a group of financial institutions quietly launched ICE Trust, a new and theoretically safer way to trade derivatives, a key element of the financial crisis. As lawmakers debate reform, banks at the center of the storm are remaking the market—and stand to profit.
As the financial crisis exploded with full force in 2008, it was obvious that something was gravely wrong with the huge, unregulated market for derivatives.
Lehman Brothers had $738 billion of these contracts—which are based on the value of some other asset, such as a stock or a bond or a hog belly—on its books when it failed on September 14, 2008.
Lehman certainly wasn’t alone. Over the next few months, insurer AIG reported as much as $53.5 billion of derivatives losses—losses that were linked to nearly one third of its $182.5 billion federal
Inter Press Service (IPS), Feb 3, 2010 –
The global bank HSBC may be running offshore accounts for central banks. According to a U.S. Senate investigation, an HSBC subsidiary in London called HSBC Equator Bank had a sister bank in the Bahamas.
According to an internal e-mail, the bank told HSBC USA it had been providing offshore accounts to central banks for 20 years, because the banks wanted to avoid “Mareva” injunctions, legally enforceable orders to freeze funds.
Oct 22, 2009 –
Back in 2004, when Chris Christie was the U.S. Attorney for New Jersey, his office first heard allegations that IDT Corporation, a Newark, N.J.-based global telecommunications company, was involved in a case of international bribery. No federal criminal case was ever brought against IDT, in contrast to several successful federal prosecutions in similar cases elsewhere. The company is run by James Courter, a former Republican congressman from New Jersey.
Fast forward to the present, and Christie is now the Republican candidate for the governor of New Jersey. And, an examination of campaign finance records shows, Christie has thus far racked up $26,800 in campaign contributions – earning him a total of $80,400 including state matching funds — from 27 individuals who could have a direct interest in the IDT case.
State aided suspect in huge swindle
Miami Herald, July 5, 2009 –
Winner of second place for Business News, the National Headliner Awards
Years before his banking empire was shut down in a massive fraud case, Allen Stanford swept into Florida with a bold plan: entice Latin Americans to pour millions into his ventures — in secrecy.
From a bayfront office in Miami in 1998, he planned to sell investments to customers and send their money to Antigua.
But to pull it off, he needed unprecedented help from an unlikely ally: The state of Florida would have to grant him the right to move vast amounts of money offshore — without reporting a penny to regulators. He got it.
AlterNet, March 26, 2009 –
Congress has deftly avoided the real story of AIG’s collapse, which will make a few million in bonuses seem like peanuts.
Most legislators at a House Finance subcommittee hearing last week deftly avoided the real story of AIG’s collapse. Instead, they homed in on the public relations disaster of hundreds of top AIG officials and staff getting $165 million (later revealed as over $218 million) in bonuses.
The key issue ignored by the congressmen and women was the potential catastrophe represented by as much as $2.7 trillion in AIG derivative contracts and how AIG and the U.S. government are dealing with them. To put that number in context, we’ve so far provided the company only about $170 billion.
How food-service providers like Sodexo bilk millions from taxpayers and customers
In These Times, March 2009 –
The Investigative Fund at the Nation Institute provided generous support for this article.
At the end of the 2006 school year, children’s nutrition advocate Dorothy Brayley had a disturbing conversation with a local dairy representative. He had come to her office to discuss participation in the summer trade show of food providers she runs as director of Kids First Rhode Island.
At the time, the state’s schools were buying 100,000 containers of milk each week. The salesman for Garelick Farms, New England’s largest dairy, told Brayley that Sodexo—a food and facility management corporation that managed most of the state’s school lunch programs—was paying Garelick more than competitors in order to get a bigger rebate.
That’s just a taste of the hundreds of millions of dollars of “rebates”—or kickbacks from suppliers—that Sodexo, a $20 billion-a-year global leader in the food and facility management industry, has taken while operating cafeterias and other facilities for schools, hospitals, universities, government agencies, the military and private companies across the country, according to evidence provided by whistleblowers and internal company documents.
Inter Press Service (IPS), Feb 5, 2009 –
President Barack Obama said he would crack down on firms that use offshore centres to evade taxes. He could begin with a New York subsidiary of one of the world’s largest private banks, which used a Cayman Islands company to shift its profits.
Why would a New York investment fund manager run operations through an office in the Caymans? “This type of structure is for optimising taxes,” explained Max Obrist, a Cayman Islands official of the global Julius Baer Group (Zurich).
He told IPS that “generating” the income where a company was actually based, “you would pay much more taxes”. Obrist was describing a company shifting claimed earnings to tax havens to evade home taxes. He allegedly helped Julius Baer Investment Management (JBIM) New York do just that.
Evening Standard (London), Jan 6, 2009
Gordon Brown and Barack Obama are both promising to crack down on the use of offshore tax havens. But putting those tough words into practice is another matter.
One of the world’s biggest private wealth management groups circulates funds via offices in the Cayman Islands, claiming they take major investment decisions — when the main work is apparently carried out in London.
With offices in London and across the globe, Swiss-based Julius Baer banking group invests over $300 billion (£208 billion) in assets on behalf of institutions and wealthy individuals. Profits in 2007 were more than $1.1 billion.
In London, one of its units was known as Julius Baer Investors or Julius Baer Investment Management (JBIM) until a management buyout in 2007. It was renamed Augustus Asset Managers, is based in Bevis Marks in the City, and is still 10% owned by Julius Baer.
From London, Augustus controls assets of $12 billion but claims its profits are generated elsewhere, offshore at a Cayman Islands Baer subsidiary called Baer Select Management.
Why? Simple, really. “If you would generate all the income in London, you would pay much more taxes,” acknowledged Max Obrist, a Cayman Islands executive of Julius Baer.
Inter Press Service (IPS) Dec 19, 2008
American International Group (AIG) operated a captive insurance scam that involved fraudulent use of offshore tax havens. Currently, the U.S. government has invested over $40 billion in AIG, with the U.S. getting nearly 80 percent of its stock. 
This puts the U.S. in a unique position to investigate the internal operations of a giant corporation with a reputation for using the offshore system for tax evasion.
U.S. authorities could begin their investigations with a look into a very curious practice that was revealed 15 years ago in a case that was never exposed by the mainstream press and which insurance insiders say is endemic.
AIG would keep a portion of a client’s inflated insurance premium and send the rest to the client’s offshore reinsurance company. AIG would earn a higher commission. The client would write off the entire amount as a business expense and enjoy the extra cash offshore, tax free.
This story tells how notorious fraudster Victor Posner made an AIG deal to stash reinsurance profits in Bermuda.
Sept 2, 2008 –
Michael Glassner, in charge of Republican Vice-Presidential candidate Sarah Palin’s campaign operations, was till April 18th a vice-president of IDT, the New Jersey-based telecom fined $1.3 million by the FCC in July for failing to file its Haiti contract.
The contract, effective in 2004, revealed payments to an offshore shell company in the Turks & Caicos which sent only part of the fees to Haiti’s phone company. The case is under investigation by the Justice Department and the Securities and Exchange Commission. A former IDT insider, Michael Jewett, who managed the company’s Caribbean region, says the missing money represented kickbacks to former Haiti President Jean-Bertrand Aristide.
Dec 1, 2007
When there’s a financial crisis tied to lack of transparency, follow the culprits offshore. Evidence comes out now that this is true about the subprime debacle.
Reuters reports that a German bank is implementing “accounting changes including consolidation of an offshore conduit whose soured investments triggered a government-led rescue.” The offshore operation was set up to invest in subprime mortgages.
Pam Martens in Counterpunch points out that, “Citigroup, is discovered to have stashed away over $80 billion of Byzantine securities off its balance sheet in secretive Cayman Islands vehicles with an impenetrable curtain around them.”
Among those securities count subprimes. Citigroup has $55 billion of subprime exposure and in November said it would write down up to $11 billion in subprime losses. Goldman Sachs said that won’t be all, that the bank may have to write off $15 billion.
Inter Press Service (IPS), Aug 30, 2007
U.S. officials from the Securities and Exchange Commission, the Justice Department and the Federal Bureau of Investigation met with Munich prosecutors this week regarding the 1.3-billion-dollar bribe fund run by Siemens, the German multinational technology company.
After talking to the Germans about tracking the financial flows of the largest illicit slush-fund ever discovered, the U.S. investigators would do well to visit Luxembourg on Germany’s western border.
There they could seek information from Clearstream, the international financial clearing house, that might tell them how Siemens moved so much money and where it went. That is because Siemens has the unusual status of being one of only four non-financial companies among 2,500 Clearstream members. It gained membership on the insistence of a former CEO who was fired after a scandal.
Aug 15, 2007
Siemens, the German-based multinational technology company that made massive payoffs to get international contracts, has, according to the German press, a bribery slush fund of more than $1.3 billion. 
It moved money through a network of front companies, mostly in offshore Liechtenstein and the United Arab Emirates. Siemens is being investigated by the U.S. Justice Department and the Securities and Exchange Commission as well as by public prosecutors in Germany and Italy.
How did Siemens officials move so much money about? Investigators ought to take a look at Siemens’ transactions through Clearstream, the international financial clearing house in Luxembourg, whose clients do not undergo the same due diligence scrutiny that regular banks apply.
Siemens is one of only four non-financial companies (out of 2500) with Clearstream accounts. Here — published for the first time — are listings of Siemens’ Clearstream accounts for 1995, 2000 and 2001.
Aug 1, 2007
Where did Rupert Murdoch get $5 billion to buy up the Wall St. Journal? Beyond normal profits, his coffers were stuffed by dodging taxes in the U.S. and elsewhere. Some of that is your money!
The Economist, in 1999, investigated Murdoch’s corporate tax affairs and discovered that a collection of 800 offshore companies help him cut corporate taxes to 6%!
April 10, 2007 –
The NY Times reports today that Charles Prince, CEO of Citigroup, is planning to cut the corporation’s compliance staff. 
Reporter Eric Dash says it’s “to keep the bank from getting bogged down” because “the compliance overhang has made it difficult to be competitive” and “unnecessarily slowed the company down.”
Translation: other banks are laundering profits or running scams to help clients cheat tax authorities and investors, and they make good money at it. Why shouldn’t we?
Dash noted that Citigroup had beefed up its compliance staff after scandals, including its “dealings” with Enron. He skimps on details: that Citigroup set up offshore shell companies to help Enron cook the books.
Inter Press Service (IPS), April 4, 2007
Now that the U.S. Congress is investigating the truth of President George W. Bush’s statements about the Iraq war, they might look into one of his most startling assertions: that there was a link between Saddam Hussein and Osama bin Laden.
Critics dismissed that as an invention. They were wrong. There was a link, but not the one Bush was selling. The link between Hussein and Bin Laden was their banker, BCCI. But the link went beyond the dictator and the jihadist — it passed through Saudi Arabia and stretched all the way to George W. Bush and his father.
Is Citibank Spain a tax cheat?
New Internationalist, Aug 2006
With help from a whistleblower, I followed the money trail through the offshore operations of Citigroup, the world’s biggest bank, and discovered that Spanish bankers handling their client’s offshore accounts were getting commissions via an internal accounting system instead of on the regular books.
It is the same internal system that Citigroup used in the 1970s to compensate currency traders in Paris, London, Frankfurt and elsewhere who “booked” trades in the tax haven Nassau, the Bahamas. They were exposed by an insider, were investigated by the SEC and Congress, and had to pay millions in back taxes. Is this happening again?
January 24, 2007 | Posted in
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The report.
Inter Press Service (IPS), Dec 29, 2006
Investigators find evidence that Siemens (German electronics & engineering firm), Total (French oil company), and BAE (British arms conglomerate) paid multi-millions of dollars in bribes through bank accounts in Switzerland and other offshore centers.
France and the UK argue “national security” to block inquiries. Concern is more likely the “security” of top officials who got kickbacks.
Spain’s discovery that funding for Basque terrorist group ETA goes through tax havens is dramatic proof that “national security” lies not in protecting but in dismantling the global offshore secrecy network.
Inter Press Service (IPS) – Nov 6, 2006
The company is under investigation by the SEC, the United States Attorney in Newark, New Jersey, and a U.S. federal grand jury for allegedly paying bribes to Jean-Bertrand Aristide, former president of Haiti. Five nationally prominent US Republicans, the independent board members of a corporation that has been charged with paying hundreds of thousands of dollars in bribes to get a sweetheart telecom deal in Haiti, are leaving its board. The company is IDT, the world’s third-ranked international phone company.
IDT is run by James Courter (shown here), a former New Jersey Republican congressman. The other Republicans are Rudy Boschwitz, former senator from Minnesota; James S. Gilmore III, former Virginia governor; Thomas Slade Gorton III, former senator from Washington State; Jack Kemp, former congressman from New York and 1996 vice presidential nominee; and Jeane Kirkpatrick, the former U.S. ambassador to the UN under President Ronald Reagan.
