Wine Con Artist Sentenced to 10-Years in Prison, BofA Settles with DOJ, and Silicon Valley Labor Dispute Continues
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UPDATED: Aug 8, 2014
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A fraudulent California wine dealer is sentenced to a decade in prison, Bank of America takes another financial hit with DOJ settlement, and a federal judge in California rejects the Silicon Valley tech industry’s proposed labor settlement.
California Wine Con-Artist Sentenced to 10-years in Prison
A California wine con-artist has been sentenced to serve 10-years in prison for defrauding wealthy wine collectors. Rudy Kurniawan was convicted in December of fraud for selling counterfeit vintages while posing as a fine-wine connoisseur, and received the decade long sentence this week. During the course of his fraudulent activities, Kurniawan conned millions of dollars out of wealthy clients by claiming his home-mixed blends were rare bottles worth several thousands of dollars. Kurniawan established a reputation in the wine community, and victimized notable clients including industrialist billionaire William Koch, and Univision CFO Andrew W. Hobson.
Upon raiding Kurniawan’s California home, police found computer generated fake labels of expensive and rare vintages, and old looking bottles scattered around the home. During his trial, it was revealed that Kurniawan had established a world-renowned reputation as a high end dealer – largely for his considerably diverse collection. In 2006, Kurniawan sold $35 million in counterfeit wines. In addition to his conviction for defrauding wealthy wine customers with fake bottles, Kuriawan was also convicted of wire fraud for using his collection as collateral to secure a $3 million loan.
In addition to his lengthy prison sentence, Kurniawan was ordered to forfeit $20 million and pay $28 in restitution to his victims. Throughout the sentencing hearing, Kurniawan’s attorney emphasized the minimal impact the crime had on his victims when requesting clemency, saying, “Nobody died. Nobody lost their job. Nobody lost their saving.” Judge Richard Berman, however, was unsympathetic and challenged the notion that people who target the rich should not be punished because victims are capable of recovering from financial losses. Kurniawan’s attorneys expressed shock and disappointment following the sentence, and have promised to appeal.
Bank of America nears Billion Dollar Settlement with Federal Government
After being ordered to pay nearly $1.3 billion for its involvement in the fraudulent HUSTLE sub-prime mortgage program last week, Bank of America is hashing out the details of a reported $17 billion settlement with the Department of Justice. The settlement will close the government’s investigation into BofA’s alleged fraudulent marketing of mortgage-backed securities that helped create the nation-wide economic crisis.
Bank of America’s settlement becomes the largest ever penalty imposed on a bank by the DOJ, surpassing the $13 billion agreement between the government and JPMorgan Chase last year. While the two sides have yet to hash out the details, it is rumored that hundreds of millions of settlement dollars will aid struggling homeowners. The agreement is another in a growing list of settlements closing fraud investigations against banks for their role in the mortgage crisis, including JPMorgan’s $13 billion, $7 billion with Citibank last month, and two other BofA settlements totaling $12 billion.
Although $17 billion is nothing to sneeze at, financial watchdog groups and some members of Congress have expressed disappointment that Bank of America got of relatively easily. Senator Bernie Sanders, I-VT, pointed out that BofA made nearly $1 trillion from its sale of zero-interest loans, making $17 billion seem modest. Dennis Kelleher, CEO of financial watchdog Better Markets, wondered if the DOJ would provide details of BofA’s financial gains during the years leading up to the mortgage crisis and detail who at the company was responsible for the fraudulent activities that contributed to the economic meltdown. It is likely that questions about Bank of America’s activities will go unanswered and the company’s executives will go unpunished, leaving the settlement seem like a $17 billion consolation prize without the closure many Americans would like.
Federal Judge Rejects Big-Tech Labor Settlement
A federal judge has rejected a proposed $324.5 million settlement from Silicon Valley companies in lawsuit brought by 64,000 former tech employees who allege collusion to drive down wages from 2005 – 2009. Former workers from Apple, Google, Intel, and Adobe claim that the tech giants agreed to not hire the other’s employees, effectively driving down demand for workers and lowering wages substantially. US District Judge Lucy Koh rejected the proposed agreement saying, “The total settlement amount falls below the range of reasonableness,” and adding that the amount would need to total at least $380 million to match a similar agreement paid out by Pixar, Lucasfilm, and Intuit last year.
Under the $324.5 million agreement, each worker would only receive $5,000 after legal fees – far below what plaintiffs were hoping for. The workers filed the lawsuit seeking $3 billion in damages, and it appears the two sides will head back to the negotiation table using Judge Koh’s remarks as guidance.