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Citibank Stole From 53,000 Customers
Topics | 2008/08/27 18:24
Citibank agreed Tuesday to repay $14 million taken from 53,000 customer credit accounts, plus interest and penalties, after after a three-year investigation by the California Attorney General's office revealed the bank's policy of clearing positive balances off customer credit accounts.

Citibank used a computerized process between 1992 and 2003, which automatically and immediately erased positive balances from credit-card accounts. The Attorney General's office quotes a bank executive saying, "Stealing from our customers is a business decision, not a legal decision."

Underscoring the intentional nature of the bank's actions, the Attorney General said an insider at Citibank reported the credit sweeps to an internal audit team in 2001, and was first ignored and then fired.

The investigation took three years to complete because the state investigators had to overcome legal trench warfare from Citibank which resisted subpoenas from the state to third parties who had information about the theft, said a spokesman for the Attorney General.

"The company knowingly stole from its customers, mostly poor people and the recently deceased when it... implemented the sweeps," said California Attorney General Jerry Brown Jr.

Positive balances happen when a customer over-pays, or when a customer returns a purchase for credit. A spokesman for Brown's office, Dana Simas, said the poor and the dead tend to be less financially organized, which accounts for their increased exposure to Citibank's credit sweeps.

$1.6 million was swiped from Californians alone.

Citibank was represented in the matter by Julia Strickland and Julie Nelson with the Stroock law firm.

The settlement calls on Citibank to refund the victims for the amount stolen, along with a 10% interest. It also imposes a $3.5 million fine to be paid to California, and prevents Citibank from re-initiating the credit sweeps.

Once Citibank has complied, an independent auditor will ensure that Citibank has fulfilled its requirements.

The state's investigation was led by Frederick Acker.


US soldier sentenced for desertion
Law Firm News | 2008/08/26 15:15
A US military judge in Colorado sentenced US Army Pfc. Robin Long Friday to 15 months in prison, dishonorable discharge and demotion after Long pleaded guilty to desertion with intent to remain away permanently. Long fled to Canada in 2005 in moral opposition to the war in Iraq and filed for refugee status there, but a Canadian immigration judge denied his motion in August 2007, writing: 
I find nothing in the claimant’s evidence that would support a finding that he could not rely upon the state to protect him from persecution or any other harm. There is no support for a finding that it was objectively reasonable for the claimant not to have sought protection in his country.
Canadian officials deported Long to the US in July. US authorities initially charged him with desertion with intent to shirk hazardous duty, a more serious offense under the Uniform Code of Military Justice, but Long pleaded to the lesser offense of desertion with intent to remain away permanently the same day as the scheduled start of his court-martial proceedings.

In early July, Canada's House of Commons passed a non-binding resolution to grant US military deserters asylum. In November 2007, the Supreme Court of Canada declined to hear the appeals of Jeremy Hinzman and Brandon Hughey, two US military deserters who had unsuccessfully applied for asylum before the Immigration and Refugee Board of Canada. The IRB had concluded that the two men would receive a fair trial if they were returned to the US and that they would not face persecution or cruel and unusual punishment.


Gay marriage foes mobilize for ban in California
Law Firm News | 2008/08/25 14:03
Michael Bumgarner says he's never campaigned for a political cause before, but his strong opposition to same-sex marriage has prompted him to join thousands of volunteers going door-to-door in support of a ballot initiative that would ban gay nuptuals here.

"I've never stumped before, but I want to be a part of this," Bumgarner said. The retired insurance executive and devout Mormon said his late mother would "turn over in her grave" if she knew that gays and lesbians could marry.

With less than 11 weeks until Election Day, supporters of Proposition 8 are ramping up their field organization and refining their message as they seek to persuade California voters to shut the door on same-sex marriage. It's the first time voters will be asked to weigh in on the issue in either California or Massachusetts — the states where gays have won the right to wed.

An estimated 15,000 backers of the measure, most of them members of Mormon, Catholic and evangelical Christian churches, knocked on doors and distributed campaign literature to registered voters throughout the state this weekend and last, according to Jennifer Kerns, spokeswoman for the Yes on 8 campaign.

The initiative is a constitutional amendment, similar to ones already enacted in 26 other states, that would overturn the California Supreme Court decision that legalized same-sex marriage. It needs a simple majority of votes to pass.



IRS updates and expands EPCRS procedures
Press Release | 2008/08/24 15:37

The IRS has released the long-awaited revenue procedure, updating and expanding the Employee Plans Compliance Resolution System (EPCRS), the system of voluntary correction programs for retirement plans. The EPCRS has been expanded to cover additional plan failures and includes streamlined application procedures under the Voluntary Correction Program (VCP) for numerous categories of plan failures.

“Employers and plan administrators want to comply with the tax laws and regulations to protect plan participants,” said Michael Julianelle, director of the IRS’s Employee Plans division. “EPCRS helps employers and plan administrators take a proactive role in identifying and fixing mistakes. It also encourages implementation of practices and procedures that ensure retirement plans comply with laws and regulations.”

The updated EPCRS revenue procedure generally will be effective January 1, 2009. However, plan sponsors will be permitted to apply the provisions of the updated revenue procedure beginning September 2, 2008.

Time to self-correct expanded
The Self-Correction Program (SCP) permits a plan sponsor to correct insignificant operational failures in plans such as qualified plans, 403(b) plans, SEPs or SIMPLE IRA plans without having to notify the IRS and without paying any fee or sanction. The updated procedure expands the SCP in situations where employers discover failures in their plans and have begun the correction process.

The time by which a plan sponsor substantially corrects a significant operational failure and is therefore entitled to use the SCP has been liberalized. Sample correction methods for improperly excluded employees for both employer and employee contributions have been added to Appendix A. In addition, sample correction methods for the failure to implement an employee’s elective deferral election and to provide matching contributions have been added to Appendix B.




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