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Microsoft, Google and Yahoo settle gambling claims
Venture Business News | 2007/12/20 06:50
Microsoft Corp, Google Inc and Yahoo Inc agreed to a settlement worth $31.5 million to resolve accusations that the companies promoted illegal Internet gambling, the Justice Department said on Wednesday.

The companies were accused of receiving money from online gambling businesses to advertise illegal betting from 1997 through 2007.

As part of the settlement, the companies will pay cash to the U.S. government and provide millions of dollars worth of public service advertisements informing young adults and teenagers that Internet gambling is illegal.

U.S. Attorney Catherine Hanaway in St. Louis, Missouri, who prosecuted online gambling company BETonSPORTS Plc earlier this year, announced the settlement.

"These sums add to the over $40 million in forfeitures and back taxes this office has already recovered in recent years from operators of these remote-control illegal gambling operations," Hanaway said in a statement.

Microsoft will pay $4.5 million to the U.S. government, $7.5 million to the International Center for Missing and Exploited Children, and provide $9 million worth of public service advertising.

David Bowermaster, a Microsoft spokesman, said that Microsoft stopped accepting ads from online gambling sites nearly four years ago. "This agreement reflects our ongoing commitment to online safety," he said.

Yahoo's settlement of $7.5 million includes forfeiting $3 million to the U.S. government and providing $4.5 million worth of online ads for a public service advertising campaign. Google will pay $3 million, the department said.



Italian Child Cannot Be Named Friday
International | 2007/12/20 03:53
Friday's child is loving and giving — but not if he lives in Italy.

Italian judges forbade a couple from naming their son Friday, saying it would bring the child shame and ridicule to be named after the character in "Robinson Crusoe."

"They thought that it recalled the figure of a savage, thus creating a sense of inferiority and failing to guarantee the boy the necessary decorum," the couple's lawyer, Paola Rossi, said Wednesday.

Mara and Roberto Germano, whose son was born on Sept. 3, 2006, had the boy named and baptized Venerdi, Italian for Friday.

Even though the boy was not born on a Friday — it was Sunday — his parents liked the name, said Rossi.

"They wanted an unusual name, something original, and it did not seem like a shameful name," Rossi said in a telephone interview. "We think it calls to mind the day of the week rather than the novel's character."

Since City Hall officials are obliged by law to report odd names, the matter ended up before judges in Genoa, the northern Italian city where the couple live.

Last month, an appeals court stated that Friday falls into the category of the "ridiculous or shameful" names that are barred by law, because it recalled the native servant in Daniel Defoe's novel.

The judges wrote that naming somebody Friday would bar him from "serene interpersonal relationships" and would turn the boy into the "laughing stock of his group," according to a report in La Repubblica this week.

According to the daily, the judges also said that, as a day of the week, Friday raises a sentiment of sadness and penitence, when not being associated with bad luck outright.

Rossi said the court, which upheld a previous ruling in June, also ordered the boy to be named Gregorio after the saint on whose day he was born.

The couple are considering appealing the decision to Italy's highest court, she said.



White House told to detail Christian leader visits
Politics | 2007/12/20 02:04
A U.S. judge ordered the Secret Service on Monday to disclose records of visits by nine prominent conservative Christian leaders to the White House and Vice President Dick Cheney's residence.

The ruling, in response to a legal watchdog group's suit, could shed light on the influence leaders like James Dobson of Focus on the Family have had on President George W. Bush's administration. It may also affect legal efforts to force the release of visiting records of convicted lobbyist Jack Abramoff and other similar cases.

"We think that these conservative Christian leaders have had a very big impact," said Executive Director Melanie Sloan of Citizens for Responsibility and Ethics in Washington, which filed the case.

"The White House doesn't want to talk about how much influence these leaders have, and we want to talk about how much they do have," she said.

Dobson is one of the most influential opinion leaders among conservative Christians who are at the heart of Bush's political base.

Others whose visiting records were sought included Family Research Council president Tony Perkins, Gary Bauer, who unsuccessfully sought the 2000 Republican presidential nomination, and Moral Majority co-founder Jerry Falwell, who died in last May.

U.S. District Court Judge Royce Lamberth rejected as "misguided" the Secret Service's arguments that disclosing the records would reveal confidential policy deliberations.

The Secret Service is responsible for presidential security and clears visitors for entry to the White House and Cheney's official residence. It also argued that the records were not under its control but were protected presidential documents.



Ex-Refco executive Maggio pleads guilty to fraud
Court Watch | 2007/12/20 01:56
A former senior Refco Inc executive pleaded guilty on Wednesday to criminal charges for his role in an alleged fraud that led to the collapse of the futures and commodities broker.

Santo Maggio, 56, who was president of the Refco Capital Markets unit, pleaded guilty to four counts -- two counts of securities fraud, one count of conspiracy and one count of wire fraud -- at a hearing before Magistrate Judge Ronald Ellis in Manhattan federal court.

Separately, the U.S. Securities and Exchange Commission said in a related action it had settled a civil lawsuit against Maggio.

Refco and 23 affiliates filed for Chapter 11 bankruptcy protection on October 17, 2005, a week after revealing that former Chief Executive Phillip Bennett had hidden $430 million of bad customer debt. It later liquidated its operations.

Maggio told the judge that Refco's losses were covered up.

"I participated with others to hide the true financial health of Refco," he said. "I deeply regret my conduct and the harm that it has caused."

He faces a maximum sentence of 65 years for the charges. He is scheduled to be sentenced on May 9.

The plea comes a day after prosecutors, along with the U.S. Postal Inspection Service and the Securities and Exchange Commission, filed charges against Joseph Collins, a former outside lawyer for Refco. 



Legislature hires law firm to head probe of MnDOT
Legal Business | 2007/12/20 01:07
The Minnesota Legislature is bringing in some hired help for its ongoing investigation of MnDOT's role in the collapse of the Interstate 35W bridge.

The Minneapolis law firm of Gray Plant Mooty will earn up to $500,000 to investigate the transportation department's operations in the years leading up to the collapse, which killed 13 and injured nearly 100 others.

Exactly what brought down the span on August 1st will no doubt be a matter of engineering and physics. The National Transportation Safety Board is entrusted with that probe, but it won't necessarily answer State Senator Steve Murphy's top question.

"What can we do to make sure that this doesn't happen again?"

Murphy, the Red Wing Democrat who heads the Senate Transportation Committee, convinced the Rules Committee to authorize the Senate's half of the half million dollar contract. House leaders are expected to okay the other portion.

"Are tough questions going to be asked about who made what decisions and when?," Murphy asked, "Yes. They have to be."

The law firm will technically work for the joint committee formed to investigate the tragedy, and is expected to delve into MnDOT's inspection records and decision-making process.

Governor Pawlenty asserts the money would be best spent elsewhere.

"It seems like it's not a great use of public money to have a fourth investigation," Pawlenty told reporters Wednesday, "But that's up to the Legislature in their infinite wisdom."

The Pawlenty administration's already paying $2 million for it's own investigation of the collapse. MnDOT hired the firm Wiss, Janney, Elstner of Chicago to run a "parallel" probe of the NTSB's review. That may take a year or more to complete.

In the meantime, Legislative Auditor James Nobles is looking into MnDOT's handling of the 35W bridge leading up to the collapse. He expects to issue a report in February.

"Seems to me they want to have a redundant investigation," Pawlenty argued, "It may have a political tinge or a motive to it and that's not helpful."

That political question comes up for two reasons. Senator Murphy is a longtime critic of MnDOT and Governor Pawlenty's resistance to raising the state's fuel tax to address a huge backlog in transportation projects.

And Murphy argues the collapse should make it clearer than ever that the state needs to invest more in roads and bridges.

"What would you think?" Murphy remarked, "A bridge fell down, my God. If that's not clear indication that we need to do something differently I don't know what is!"

Murphy said that if the Auditor's reports and other official probes deliver the answers the joint committee's seeking, he'll be happy to call off the law firm's probe.

"We're committed to end our association with the outfit that we hired today, if those other people are finding what we need to make sure the public is safe."

"Right now it doesn't appear that we're going to get everything we need."

A report by the St Paul Pioneer Press Wednesday raised Gray Plant Mooty's connections to Democrats and DFL politicians, pointing out that US Senator Amy Klobuchar once worked there.

Murphy said, however, the committee picked a law firm with the least number of conflicts politically of the five interviewed for the job.

"Which outfit has the least baggage? We did due diligence and we all decided that GPM was the best in that regard."

Murphy said the current plan is to issue first of three formal reports in March.


Judge rules in favor of Avvo's online rankings
Court Watch | 2007/12/19 07:12

Avvo won a key legal victory Tuesday in its quest to legitimize its online attorney rating service. The legal brouhaha erupted earlier this year when high-powered class-action lawyer Steve Berman sued the Seattle startup, claiming that the company's attorney ratings were a "flat-out scam" and could harm consumers. But U.S. District Judge Robert Lasnik on Tuesday granted Avvo's request to dismiss the suit, writing in a 10-page order that the startup's attorney rating system is protected by the First Amendment.

Berman was traveling and could not be reached for comment.

Avvo Chief Executive Mark Britton declared victory, saying he had been confident that the court would reach that decision.

"This was a case that should have never been filed. It was aimed at chilling and censoring our opinions, the opinions of consumers and even the opinions of other lawyers," said Britton, the former general counsel at Expedia who founded Avvo last year. "We are gratified. We are very happy."

There is the possibility of an appeal.

The suit, which was brought by Berman on behalf of Seattle attorneys John Henry Browne and Alan Wenokur shortly after Avvo's launch last June, claimed that the attorney rating service was severely flawed since some accomplished lawyers scored lower than those with disciplinary actions.

For example, the suit noted that Supreme Court Justices Ruth Bader Ginsburg and Samuel Alito received the same rating as an attorney in prison for conspiracy and other charges.

The suit also said that attorneys could manipulate the rankings by updating their profiles on Avvo, citing one example of a Bellevue attorney who boosted his Avvo rating by posting athletic awards on his profile page.

But Lasnik wrote Tuesday that the Avvo ratings -- which assign rankings of 1 to 10 on attorneys -- are "subjective opinions."

"To the extent that their lawsuit has focused a spotlight on how ludicrous the rating of attorneys (and judges) has become, more power to them. To the extent that they seek to prevent the dissemination of opinions regarding attorneys and judges, however, the First Amendment precludes their cause of action," Lasnik wrote.

Lasnik also questioned why Browne would use his rating as a "Super Lawyer" by Washington Law & Politics magazine as evidence against his sub-par Avvo rating, noting that the court did not want to determine if one system was better than the other.

Avvo, which has raised about $13 million from Benchmark Capital and Ignition Partners, has attracted more than 4,000 lawyers who have claimed profiles on the site. About 2,000 of those are from Washington state.

Despite the legal action, Britton said that he spent little time on the case and most of the employees stayed focused on the job at hand.

"I think the team took it for what it was worth, rather than getting worked up by it or getting distracted by it," he said.



Chicago Lawyer Is Indicted On Refco-Related Charges
Breaking Legal News | 2007/12/19 06:12

In a rare case of a lawyer being charged in connection with the alleged wrongs of a client, Chicago lawyer Joseph Collins was indicted today on fraud and other charges in connection with the 2005 collapse of commodities and derivatives firm Refco Inc. Federal prosecutors in Manhattan on Tuesday announced 11 counts against Mr. Collins, of the law firm Mayer Brown LLP, in connection with legal work he did for Refco, including documenting a series of "round trip loans" between related entities and outside investors that Refco completed to shift bad debt off its books from the late 1990s to 2005. The discovery of the transactions led to one of the swiftest collapses in Wall Street history.

Phillip Bennett, the former chief executive of Refco, and others have been indicted in connection with the Refco collapse.

"Acting hand-in-hand with Bennett, Collins made affirmative misrepresentations, material omissions, and told deceptive half-truths, all to assist Bennett's scheme to steal more than $2.4 billion from potential investors," the indictment said.

Lawyers are rarely charged criminally in connection with a client's alleged fraud. In the collapse of Enron Corp., no outside lawyers were charged. "There tends to be gray in legal transactions, but to show intent in a white collar prosecution, it needs to be black and white," says Andrew Weissmann, the former head of the Department of Justice's Enron Task Force and now a partner at Jenner & Block LLP. "It's difficult to develop that kind of evidence against lawyers."

The Securities and Exchange Commission also filed a civil complaint Tuesday against Mr. Collins, alleging that he aided and abetted securities fraud at Refco.

Mr. Collins, who has been the head of Mayer Brown's derivatives group, is now on leave from the firm while the charges are pending, the firm said Tuesday. "Mayer Brown has cooperated fully with authorities investigating activities related to the collapse of Refco," the firm said in a statement. "Our review of the evidence available to us shows that the firm acted in a professional, competent and ethical manner in its work on behalf of Refco."

Mr. Collins's lawyer, William Schwartz, said his client intended to fight the charges and called him "an innocent victim of the Refco fraud. This indictment should send a chill down the spine of every transactional lawyer who believes he or she is representing an honest client."

Michael Garcia, the U.S. Attorney for the Southern District of New York, took a different view, saying it is "not a crime to have a client who commits a crime. No lawyer will be prosecuted unless that lawyer knows about the client's fraud and agrees to join in it understanding its unlawful nature."

The charges are a blow to a law firm that has weathered several of late. In July, buyout firm Thomas H. Lee Partners LP, which purchased a stake in Refco in 2004, sued Mayer Brown for allegedly failing to inform Lee about the bogus loan transactions. Also this year, an independent examiner filed a report in Refco's bankruptcy, concluding that there was significant evidence that the law firm "knew or should have known" the loans were fraudulent.

Beyond Refco, the law firm has struggled with recent defections by high-profile partners, and it suffered negative publicity this year when it fired or demoted 45 partners in an effort to boost its profitability.



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