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Exception Tracking Spreadsheet (TicklerTrax™)
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Top Story Compliance Related

10/13/2021

DHS enforcement strategy to protect workers

DHS Secretary Mayorkas has directed U.S. Immigration and Customs Enforcement (ICE), Customs and Border Protection (CBP), and Citizenship and Immigration Services (USCIS) to take actions to promote a fair labor market by supporting more effective enforcement of wage protections, workplace safety, labor rights, and other employment laws and standards. He has issued a memorandum to ICE, CBP, and USCIS to develop and update policies to enhance the Department’s impact in supporting the enforcement of employment and labor standards. The agencies must also develop strategies for prioritizing workplace enforcement against unscrupulous employers and, through the exercise of prosecutorial discretion, facilitate the participation of vulnerable workers in labor standards investigations.

10/12/2021

CFPB files against American Advisors Group

The CFPB on Friday announced it has filed a complaint and proposed consent order alleging that American Advisors Group (AAG) used inflated and deceptive home estimates to lure consumers into taking out reverse mortgages. The CFPB also alleges that AAG’s deceptive conduct violated a 2016 administrative consent order that addressed AAG’s deceptive advertising of reverse mortgages. If entered by the court, the proposed consent order would prohibit AAG from future unlawful conduct and require AAG to pay $173,400 in consumer redress and a $1.1 million civil money penalty.

American Advisors Group, based in Irvine, California, is one of the nation’s leading providers of reverse mortgages. A reverse mortgage is a special type of home loan that allows homeowners who are 62 or older to access the equity they have built up in their homes and defer payment of the loan until they pass away, sell, or move out. The loan proceeds are generally provided to the borrowers as lump-sum payments, monthly payments, or as lines of credit. Homeowners remain responsible for paying taxes, insurance, and home maintenance, among other obligations.

10/12/2021

FTC orders repeat offender to pay

The Federal Trade Commission has announced Resident Home LLC and owner Ran Reske will pay $753,000 to settle Commission charges that they made false, misleading, or unsupported advertising claims that their imported DreamCloud mattresses were made from 100% USA-made materials.

Resident Home LLC is the parent of Nectar Brand LLC (better known as Nectar Sleep), a company that had previously agreed to a 2018 FTC administrative order resolving allegations that it falsely advertised imported mattresses as “Assembled in USA.” Following the 2018 order, Reske, under penalty of perjury, stated that Resident had never made U.S.-origin claims about its DreamCloud mattress. This proved to be untrue. The proposed order entered into on Friday incorporates the terms of the 2018 order, orders the payment of $753,000, and expands the application of the 2018 order to all the entities under Reske's control.

10/08/2021

Victims of phantom debt collector to receive refunds

The Federal Trade Commission has announced it is returning $772,512 to consumers who were targeted by a debt collector who unlawfully brokered and collected fake debts that the consumers did not owe.

According to the complaint filed by the FTC and the New York Attorney General, Hylan Asset Management, LLC, and its owners, Andrew Shaevel and Jon E. Purizhansky, bought, placed for collection, and sold lists of phantom debts, including debts that were fake or imposed on consumers without their knowledge or consent. Hylan referred the fake debts to several collection agencies, including Worldwide Processing Group, LLC, which then illegally collected on them. Hylan continued to buy the portfolios and distribute them to third parties for collection even though it was repeatedly notified that consumers did not owe many of the debts, the FTC alleged. The defendants agreed to settle the case in 2019. As part of the settlement, they agreed to be banned permanently from the debt collection industry and surrendered funds to the FTC. The agency is using that money to send checks averaging $539 to 1,432 consumers.

10/08/2021

FCC sets interim fees for Reassigned Numbers Database

The Federal Communication Commission has issued Public Notice DA 21-1240 announcing interim usage charges for the Commission's Reassigned Numbers Database (RND). Callers and caller agents will be able to use the Database to determine whether a telephone number has been reassigned from the consumer they intend to reach, thus allowing them to avoid calling consumers with reassigned numbers who may not wish to receive their call. The system is in beta test; the Database is expected to be available for full use on November 1, 2021.

The RND will offer six subscription tiers: Extra Small, Small, Medium, Large, Extra Large, and Jumbo. Those wishing to use the RND may sign up for a one-month subscription, a three-month subscription, or a six-month subscription. The RND Administrator expects to offer an annual subscription option in the future, as well.

The notice includes a table of each subscription size and duration. It ranges from $10 for a one-month subscription to the extra small tier (up to 1,000 queries) to $210,600 for a six-month subscription to the jumbo tier (up to 180 million queries).

10/08/2021

Fed Board announces enforcement actions

The Federal Reserve Board yesterday announced it had issued two enforcement actions.

  • Pioneer Bank, Mapleton, Minnesota, was ordered to pay a, $11,000 civil money penalty for a pattern or practice of unspecified violations of the National Flood Insurance Act and section 208.25 of Regulation H.
  • A former employee of Pacific Premier Bank, Irvine, California, was issued an order of prohibition and restitution in the amount of $18,700 for her improper involvement and personal financial interests in extensions of credit by the bank.

10/07/2021

China strengthens AML/CFT measures

The Financial Action Task Force (FATF) has issued a follow-up report on China’s measures to tackle money laundering and terrorist financing. China has been in an enhanced follow-up process following the adoption of its mutual evaluation in 2019. In line with the FATF Procedures for mutual evaluations, the country has reported back to the FATF on the action it has taken since its mutual evaluation. Consequently, to reflect China’s progress, the FATF has now re-rated the country.

Today, China is compliant on 9 of the 40 Recommendations and largely compliant on 22 of them. It remains partially compliant on 3 Recommendations and non-compliant on 6 Recommendations.

10/07/2021

FTC puts for-profit colleges on notice

The Federal Trade Commission has announced it has put 70 for-profit higher education institutions on notice that the agency is cracking down on any false promises they make about their graduates’ job and earnings prospects and other outcomes and will hit violators with significant financial penalties.

The Commission is resurrecting its Penalty Offense Authority, found in Section 5 of the Federal Trade Commission Act, to ensure that bad actors pay a price when they break the law. By sending a Notice of Penalty Offenses to the institutions, which represent the largest for-profit colleges and vocational schools across the country, the companies operating these colleges will be on notice that they could incur significant sanctions for engaging in certain unlawful practices.

The notice outlines a number of practices that the FTC has previously found to be unfair or deceptive, and notes that these practices could lead to civil penalties of up to $43,792 per violation.

A full list of the institutions that received the Notice from the FTC is available on the FTC’s website. A school’s presence on this list does not reflect any assessment as to whether they have engaged in deceptive or unfair conduct.

10/07/2021

Treasury targets CJNG members

Yesterday, Treasury announced that OFAC had designated Mexican nationals Aldrín Miguel Jarquín Jarquín, José Jesús Jarquín Jarquín, César Enrique Díaz de León Saucedo, and Fernando Zagal Antón under the the Foreign Narcotics Kingpin Designation Act (Kingpin Act). These four individuals are members of the Cártel de Jalisco Nueva Generación (CJNG) operating through the port of Manzanillo in Colima, Mexico and the surrounding areas. CJNG, a violent Mexico-based organization, is responsible for trafficking a significant proportion of the fentanyl and other deadly drugs that enter the United States.

As a result of OFAC’s action, all property and interests in property of the designated individuals or entities that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. OFAC’s regulations generally prohibit all transactions by U.S. persons or persons within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.

Since June 2000, more than 2,200 entities and individuals have been sanctioned pursuant to the Kingpin Act for their role in international narcotics trafficking. Penalties for violations of the Kingpin Act range from civil penalties of up to $1,548,075 per violation to more severe criminal penalties. Criminal penalties for corporate officers may include up to 30 years in prison and fines of up to $5 million. Criminal fines for corporations may reach $10 million. Other individuals could face up to 10 years in prison and fines pursuant to Title 18 of the United States Code for criminal violations of the Kingpin Act.

For identification details on the four designated individuals, see the BankersOnline October 6, 2021 OFAC Update.

10/06/2021

Hemp company charged with fraud by SEC

The Securities and Exchange Commission has announced it has charged CanaFarma Hemp Products Corp. and its co-founders with fraudulently raising approximately $15 million from investors, and misappropriating a significant portion of the investor funds for personal use and other unrelated purposes.

The SEC’s complaint alleges that in 2019 and 2020, CanaFarma, a Canadian startup hemp company with offices in Vancouver and New York City, and its co-founders Vitaly Fargesen and Igor Palatnik raised millions of dollars from investors. According to the complaint, while raising these funds, the defendants made misrepresentations to investors, including claims that CanaFarma was a fully integrated company that was processing hemp from its own farm when in fact it had not processed any of this hemp and its products used hemp supplied by third parties. The complaint also alleges that financial information provided to investors misstated historical revenue numbers and included baseless projections about future revenues. In addition, according to the complaint, Fargesen and Palatnik misappropriated at least $4 million and used the funds for their personal use and purposes unrelated to CanaFarma.

The SEC seeks permanent injunctions, disgorgement and prejudgment interest, and civil penalties against the defendants, and also seeks officer-and-director and penny stock bars against them.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Fargesen and Palatnik.

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