Archives for June 2021

Nigerian IT worker charged in multistate unemployment fraud

SEATTLE (AP) — A Nigerian information technology worker has been indicted on federal wire fraud and identity theft charges, after authorities said he and his co-conspirators filed false claims for pandemic-related unemployment benefits in 17 states.

Chukwuemeka Onyegbula, using the name “Phillip Carter,” was linked to at least 253 fraudulent filings for unemployment benefits, according to an indictment unsealed Thursday in Seattle.

Onyegbula has been detained in Nigeria, but prospects for his extradition to the U.S. were unclear. Onyegbula works for Pan Ocean Oil Corporation Nigeria Limited, according to the Seattle U.S. Attorney’s Office. Court documents did not list an attorney who might comment on his behalf.

Washington, Arizona, California, Colorado, Illinois, Indiana, Kansas, Massachusetts, Michigan, Minnesota, Missouri, Montana, Ohio, Nevada, Rhode Island, Texas and Wisconsin paid out a total of nearly $290,000 on claims related to the case. Additionally, the federal Small Business Administration paid out $54,000 in COVID-19 economic disaster claims filed by Onyegbula and his co-conspirators, prosecutors said.

Washington state was severely victimized by fraudulent claims for pandemic-related benefits. It likely paid out more than $647 million in such fraudulent claims, though $370 million was recovered, according to state officials.

Onyegbula is the second Nigerian national charged with such fraud in U.S. District Court for western Washington. Abidemi Rufai, 42, a suspended Nigerian government official, has been accused of filing $350,000 in fraudulent claims in Washington and other states, with $288,000 making it into a bank account he controlled. He also sought to bilk the Internal Revenue Service of nearly $1.6 million, according to federal prosecutors.

Rufai was arrested May 14 as he tried to travel from New York to Nigeria. A federal court in New York ordered him released on bond pending trial, but federal prosecutors in western Washington have been seeking to make sure he remains in custody, saying he poses a severe flight risk, is facile with fake identities, and that he’s unlikely to ever be extradited if he makes it back to Nigeria.

A hearing is set for Friday to determine whether Rufai might be released pending trial. In a court filing Wednesday, assistant U.S. attorneys said that a recorded conversation between Rufai and his brother revealed that Rufai did not really know a woman who had offered to act as his custodian should he be released.

The recorded conversation also suggested that Rufai had significantly more money than he led the court to believe, prosecutors said.

In a response filed Thursday, one of Rufai’s attorneys, Michael C. Barrows, called the government’s reading of the conversation “an absolute fabrication.”

The family friend who offered to act as custodian attended the christening of Rufai’s son five years ago, Barrows said. Rufai often visited her when he traveled to New York, and nothing in the conversation — which occurred in English, Rufai’s second language — could be understood to mean he didn’t know her, Barrows said.

Further, the comments Rufai made about money referenced the fact that he could raise funds for his bond from friends and supporters — not that he had hidden assets, Barrows said.

Japan’s Toshiba chairman fails to win shareholder approval

TOKYO (AP) — Battered Japanese nuclear and electronics giant Toshiba Corp. faced off with shareholders Friday, seeking to shake off serious questions about governance at the once revered brand.

After a meeting lasting nearly three hours, Tokyo-based Toshiba failed to win shareholder approval for the reappointment of Chairman Osamu Nagayama and one other member of the board of directors. The other nine candidates were approved.

The company had removed two nominations in a last-minute attempt to placate disgruntled stockholders.

Nagayama had come under pressure to resign after an independent investigation that said Toshiba officials colluded with the Japanese government to curb foreign investors’ influence at last year’s shareholder meeting.

Major shareholders and investment fund Effissimo instigated that investigation, alleging that last year’s meeting, in which Effissimo had nominated dissident directors, wasn’t carried out fairly. They demanded Nagayama’s ouster at Friday’s meeting.

“He bears the greatest responsibility in nominating candidates and has ultimate responsibility for the conduct of the board,” Effissimo said in a report earlier this month.

Besides Effissimo, which owns about 10% of Toshiba shares, other foreign investors include 3D Investment Partners and Harvard University’s endowment fund.

The investigation included hearings with Toshiba employees, and going over 800,000 emails, to see whether the vote tally had been dubious and Trade Ministry bureaucrats had pressured investors on how to vote.

“We take this very seriously,” Nagayama, former chief executive at Japanese drug company Chugai Pharmaceutical, told investors ahead of the vote. “We will restore transparency, get to the bottom of what happened and prevent a recurrence.”

The roiling at Toshiba highlights the bigger presence of foreign shareholders at Japanese companies.

Toshiba has promised to scrutinize the allegations and take necessary measures.

In a June 18 open letter to shareholders, Nagayama, who also previously served on the Sony Corp. board, sought backing for his reappointment.

“My priority is to provide Toshiba with the governance and leadership that you deserve. I pledge to you that I will continue to be an agent of positive change, not a protector of the status quo,” he said.

Satoshi Tsunakawa, who presided over Friday’s meeting, returned as chief executive in April.

His predecessor Nobuaki Kurumatani abruptly resigned over a controversial acquisition proposal for Toshiba from the global fund where Kurumatani previously worked, CVC Capital Partners.

The CVC offer was suspended. Kurumatani took over from Tsunakawa as CEO in 2018. Tsunakawa’s reappointment was not being opposed by activist shareholders.

The fortunes of Toshiba began to crumble over its heavy investment in nuclear power, although that move had been initially heralded. After the March 2011 nuclear disaster in Fukushima, safety costs ballooned. Toshiba is still burdened with the task of decommissioning nuclear plants in Japan, including the one in Fukushima.

Toshiba also had massive losses from the nuclear power operations of U.S. manufacturer Westinghouse, which Toshiba acquired in 2006. Westinghouse filed for bankruptcy protection in 2017.

Founded in 1875, Toshiba was long one of Japan’s prized brands, developing the nation’s first radar and microwaves, electric rice cookers and laptop computers.

It also invented flash memory, the chips ubiquitous in gadgets from digital cameras to cell phones. Toshiba sold its chips division in 2018, a move that accelerated the presence of more vocal stakeholders.

Toshiba, tarnished with accounting scandals in the past, has repeatedly promised to strengthen corporate governance.

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This story has been corrected throughout to show that Osamu Nagayama and one other member of the board of directors failed to win shareholder approval. A previous story stated all were approved.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

Break them up? 5 ways Congress is trying to rein in Big Tech

WASHINGTON (AP) — Groundbreaking legislation is advancing in Congress that would curb the market power of tech giants Facebook, Google, Amazon and Apple and could force them to untie their dominant platforms from their other lines of business. Hostility toward Big Tech has grown in recent years with the belief that its size and swagger have stifled competition, limited consumer choice and raised prices.

The bipartisan legislation targets the companies’ structure and points toward breaking them up, a dramatic step for Congress to take against a powerful industry whose products are woven into everyday life. Its backers say it would help ensure lower prices and more choices for consumers, and a fairer playing field for smaller businesses to compete.

In two days of heavy, often wonky, debate, the House Judiciary Committee approved the legislative package and sent it to the full U.S. House, where a vote will be the next step in what promises to be a strenuous slog through Congress.

The measures seek to rein in the tech giants in five ways:

BREAKING THEM UP

The legislation would bar the four companies from owning a dominant platform at the same time they own another line of business if having both creates a conflict of interest.

That means they could be forced to sell off businesses in which their market dominance enables them to favor their own services or squash competitors. Because the tech giants often operate both as a platform and as a competitor on the platform, industry critics say, there’s a built-in conflict.

This is “the big enchilada” of the legislative package, is how a friendly Republican lawmaker put it. A Democrat, Rep. Zoe Lofgren, whose California district sits in Silicon Valley, opposed the bill. “It would take a grenade and just roll it into the tech economy and blow it up,” she said.

The measure doesn’t name the four companies. But they fit into a new legal category it creates called “covered platforms” that fall under the new restrictions: online platforms with 50 million or more monthly active users, annual sales or market value of over $600 billion, and a role as a “critical trading partner.”

Some critics of the industry have pointed to Facebook’s popular messaging services Instagram and WhatsApp as strong candidates to be divested.

CROSSING OVER

Lawmakers propose enabling users on dominant platforms to communicate directly with those on rival services. It could make it easier for different companies to use products together, with the aim of helping startups and smaller companies.

People would also be able to carry their personal data — photos, videos and all — from one service to another.

“Americans deserve to have more ownership over their personal information, with the ability to seamlessly transfer their data between platforms of their choice,” says Rep. Burgess Owens, the Utah Republican who is a chief sponsor of the measure.

NO MORE FAVORITISM

The legislation would prohibit the tech giants from favoring their own products and services over competitors on their platforms.

An example: Some independent merchants who sell products on Amazon.com have complained to lawmakers about the e-commerce giant’s practices, such as contract provisions and policies said to prevent sellers from offering their products at lower prices or on better terms on any other online platform, including their own websites. Under the legislation, could Amazon be forced to spin off its private-label products that compete with vendors on the platform?

The Seattle company has said that sellers set their own prices for the products they offer on its platform. “Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively.”

HARD TO MERGE

Lawmakers want to make it tougher for giant tech companies to snap up competitors in mergers, which they have completed by the hundreds in recent years, waved through by antitrust enforcers in both Republican and Democratic administrations.

Acquisitions that would eliminate competitors or potential competitors, or expand or entrench the market power of online platforms could be expected to be blocked by regulators.

The burden would shift from the government to the companies to show that a particular merger wouldn’t harm competition.

DIALED UP ENFORCEMENT

Lastly, the legislation would give the Federal Trade Commission more money, and states more power, to enforce the antitrust laws against companies.

It would increase FTC filing fees for any proposed tech mergers worth over $500 million and cut the fees for those below that level. Many state attorneys general have pursued antitrust cases against Big Tech companies, and many states joined with the U.S. Justice Department and the FTC in their landmark antitrust lawsuits against Google and Facebook, respectively, last year.

Follow Marcy Gordon at https://twitter.com/mgordonap

Widow seeks ‘thorough’ investigation into John McAfee death

SANT ESTEVE SESROVIRES, Spain (AP) — The widow of John McAfee, the British-American tycoon who died in a Spanish prison this week while awaiting extradition to the United States, on Friday demanded a “thorough investigation” of his death, saying her husband did not appear suicidal when they last spoke.

Authorities in Spain are conducting an autopsy on McAfee’s body but have said that everything at the scene in his cell indicated that the 75-year-old killed himself.

An official source familiar with the investigation told The Associated Press that a suicide note had been found in McAfee’s pocket. The source, who was not authorized to speak about an ongoing judicial inquiry, refused to comment on the content of the note.

McAfee’s Spanish lawyer, Javier Villalba, said that the family had not been informed by authorities about the note.

In her first public remarks since the software entrepreneur’s death on Wednesday, McAfee’s widow Janice McAfee said she wanted a “thorough investigation” to provide “answers about this was able to happen.”

“His last words to me were ‘I love you and I will call you in the evening,’” the 38-year-old told reporters outside the Brians 2 penitentiary northwest of Barcelona where she recovered her late husband’s belongings. She said they spoke earlier on the day he was found dead.

“Those words are not words of somebody who is suicidal,” she added.

John McAfee was arrested at the Barcelona airport in October last year on a warrant issued by prosecutors in Tennessee who were seeking up to three decades of imprisonment for allegedly evading more than $4 million in taxes.

The day before he was found dead, Spain’s National Court had announced that it was agreeing to his extradition to the U.S. but the decision was not final.

“We had a plan of action already in place to appeal that decision,” Janice McAfee told reporters. “I blame the U.S. authorities for this tragedy: Because of these politically motivated charges against him my husband is now dead.”

The National Court judge said John McAfee had provided no evidence to back his allegations that he was being politically persecuted. “On the contrary, according to his own testimony, he took part in primaries of a certain party to defend his convictions with a result little favorable to him,” the judge wrote in the ruling seen by AP.

In an e-mailed statement, the U.S. State Department confirmed for the first time the tycoon’s death, offering the family condolences. It said: “We are closely monitoring local authorities’ investigation into the cause of death. We stand ready to provide all appropriate assistance to the family. Out of respect to the family during this difficult time, we have no further comment.”

Results of McAfee’s autopsy could take “days or weeks,” authorities have said.

The couple reportedly met in 2012 in Miami and married the following year. John McAfee had several children from previous relationships, Janice McAfee said.

The entrepreneur had not been connected with the companies that took over the antivirus software he built after he sold his shares in the 1990s. That early success had made McAfee rich and followed him in his troubled biography.

In 2012, he was sought for questioning in connection with the murder of his neighbor in Belize, but was never charged with a crime. The controversy didn’t stop him from making long-shot runs for the U.S. presidency starting in 2016.

But it was his more recent tax problems that kept him away from the U.S., the country where the British-born entrepreneur was raised and had built his early success.

The Tennessee prosecutors’ indictments from 2020 showed that the tycoon allegedly failed to declare income made by promoting cryptocurrencies, attending speaking engagements and selling the rights for a documentary on his eventful life.

“Even though he was born in England, America was his home,” Janice McAfee said. “He came there when he was a child. He had his first girlfriend there, his first case, you know, his first job. He made his first millions there and he wanted to be there. But, you know, politics just wouldn’t allow for that to happen.”

John McAfee’s social media postings indicated that he had chosen a northeastern Spanish coastal resort town as his base in Europe at least since late 2019.

“All John wanted to do was spend his remaining years fishing and drinking,” his widow said on Friday. “He had hope that things would work out. We knew that there would be an uphill battle to continue to fight this situation. But he’s a fighter … And anybody that knows John, that knows him even a little bit, knows that about him.”

“He was just so loving. He had a big heart and he just loved people and he just wanted to have peace in his life,” Janice McAfee added. “My prayers are that his soul has found the peace in death that he could not find in life.”

Parra reported from Madrid.

Astronauts complete solar panel work in 3rd spacewalk

CAPE CANAVERAL, Fla. (AP) — Astronauts finished unfurling a new pair of solar panels outside the International Space Station on Friday, making their third spacewalk in just over a week.

NASA’s Shane Kimbrough and France’s Thomas Pesquet successfully installed the second in a series of powerful solar wings that should keep the space station running the rest of this decade, as space tourism ramps up with visitors beginning in the fall.

“We have a lot of happy faces down here,” Mission Control radioed as power surged through the panel.

It should have been a two-spacewalk job, but spacesuit and other problems hampered the astronauts’ work on June 16. As a result, the first solar wing wasn’t extended to its full length of 63 feet (19 meters) until Sunday. NASA added a third spacewalk for Friday to attach and unfold the second wing — this time everything went smoothly 255 miles (410 kilometers) up.

Once Pesquet released the final bolt, the newest solar wing unrolled like a giant stretch of wallpaper, high above the Bering Sea. It took 10 minutes for the slow but steady extension.

“Well done out there, buddy,” Kimbrough called out.

Most of the action during the 6 1/2-hour spacewalk took place on the nighttime side of Earth, a safety precaution. NASA did not want any solar panels soaking up sunlight and generating power, while the astronauts had their hands on the power grid.

The two solar panels delivered by SpaceX earlier this month aren’t nearly as big as the station’s original wings. But they produce more electricity because of new technology. NASA plans to send up four more panels over the coming year; Boeing is supplying them.

This first pair will supplement the space station’s oldest solar wings, degraded after 20 years of continuous operation.

Kimbrough and Pesquet are two months into a six-month mission. Two other Americans are aboard the space station, along with one Japanese and two Russians.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

Archives for June 2021

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