Labels: bribery, Louisiana, Nigeria, Vernon Jordan

Labels: Andy Fastow, Enron, Louisiana, Michael Kopper

Labels: hijinks, Louisiana, The Bravest Bear

• Former FBI directory Louis Freeh is set to lend a hand at DaimlerChrysler, running their internal investigation into the recent bribery scandal. Siemans, DaimlerChrysler...what is it with the Germans this year?

• Accusations of faked documents arise in Apple options probe. (Say it ain't so, Steve).

• Nikko dumps execs implicated in falsified earnings report. Several asset managers have also cut ties to the firm.
  

• Biomet facing scrutiny on options backdating.

Labels: Apple, bribery, DaimlerChrysler, Louis Freeh, Louisiana, Nikko Biomet

Labels: Department of Justice, Louisiana, mcnulty memo, Peter Henning, prosecution guidelines, white collar crime

U.S. Attorney Donald W. Washington said the charges included trafficking in counterfeit goods, money laundering, making false statements to a federal agent, false representations and use of a Social Security account number, operating an unlicensed money transmitting business and forfeiture.

Labels: Louisiana, money laundering

NASD collects record $125 million in fines in 2005

December 27, 2005
By Jonathan Stempel
Reuters

The NASD on Tuesday said it collected a record $125.4 million of disciplinary fines this year, 21 percent more than in 2004, for violations including abuses in sales of mutual funds and variable annuities.

The Washington, D.C.-based regulator also said it filed 1,412 enforcement actions in 2005, up 1 percent, and barred or suspended 737 people from the securities industry, down 12 percent. It closed 9,150 arbitration cases and 1,700 mediation cases.

NASD fines are typically small relative to the profits that its regulated firms, including Wall Street's biggest names, generate. But the regulator often successfully pressures these firms into adopting reforms to thwart further wrongdoing.

"While the numbers appear fairly flat from last year, we've seen firms make a tremendous effort to comply with rules," said Mary Schapiro, the NASD vice chairman, in an interview. "The costs and reputational risks from noncompliance have risen, and firms appreciate that."

Issues the NASD will examine in 2006 include variable annuities, 529 college savings plans, over-the-counter equities, and new products, especially as retail investors show more interest in hedge funds, Schapiro said. The NASD also plans to modernize its examination programs, and push firms to use the Internet to make streamlined mutual fund disclosures.

In 2005, mutual funds were a major area of disciplinary activity for the regulator, which was once known as the National Association of Securities Dealers.

Twenty-six retail firms paid nearly $55 million in fines to settle charges that they provided favored treatment for select mutual funds in exchange for brokerage business. In the largest settlement, Ameriprise Financial Inc. (AMP.N: Quote, Profile, Research) agreed to pay $12.3 million.

The NASD fined American Express Financial Advisors, now known as Ameriprise; Chase Investment Services (JPM.N: Quote, Profile, Research), Citigroup Global Markets (C.N: Quote, Profile, Research), Linsco/Private Ledger Corp., Merrill Lynch & Co. (MER.N: Quote, Profile, Research) and Wells Fargo & Co. (WFC.N: Quote, Profile, Research) more than $40 million for selling unsuitable Class "B" and "C" fund shares. Such shares can have higher fees than other classes.

In variable annuities, Waddell & Reed Financial Inc. (WDR.N: Quote, Profile, Research) agreed to pay a $5 million fine and $11 million in restitution to settle charges that it improperly pressured thousands of customers to exchange the products. People often buy annuities as retirement investments, with taxes deferred until withdrawal.

The NASD regulates 5,144 brokerages with about 106,400 branches and 663,000 registered representatives. It works with the U.S. Securities and Exchange Commission and New York Stock Exchange in overseeing U.S. financial markets.

Labels: Louisiana

Labels: Louisiana

Business booming for private security: Firms help escort supplies and rescue files

By Terri Langford
Houston Chronicle
September 12, 2005

Perhaps someone to get your cat and your Lamborghini out of the French Quarter? After Katrina's storm waters flooded New Orleans, the city's moneyed and corporate elite reached for their cell phones and called people like David Nicastro, who owns one of the many private security and risk management firms that have descended on the city.

"We're getting requests for all kinds of things," said Nicastro, president of Secure Source Inc., a risk consulting firm in Southlake, near Fort Worth. "We're lining up transportation services, any need you might have. Porta-Johns to fuel and other things. Everything needs to be escorted in."

As federal troops and rescuers struggled to get to New Orleans and other ravaged Gulf Coast areas last week, convoys of private security and risk consulting firms, many made up of ex-military and former law enforcement officers, quickly arrived on the scene.

"We're actively engaged in New Orleans," said Jodie Rosenbloom, spokeswoman for Kroll Inc., the New York-based risk management consulting firm, which has a mix of corporate clients and the "high-net-worth individual." The company, which stresses it is not a private armed security firm, has offered all clients storm damage assessments of their office buildings.

Computer data retrieval has been a large part of Kroll's job. "Since the storm hit, we're offering free evaluations, we're telling them not to power up their waterlogged hard drives," Rosenbloom said. "We've been busy."

Private security guards, many armed, are doing everything from checking on individuals' houses to retrieving damaged computer files to pulling out luxury cars and photographing storm damage. "We're chartering aircraft and getting people into their homes," Nicastro said. "We're protecting large companies."

Most of the private security consultants have been hired by Louisiana and Mississippi businesses. "You're looking at energy companies, critical infrastructure type of calls, real estate management to provide security for the owner," said former FBI agent Bob Doguim, president of Safeguard Security Holdings Inc. in Houston.

Some companies are working with the government as volunteers and contractors as well as with individuals. North Carolina-based Blackwater USA, like other companies, took about a day to get in place in Louisiana, a lightening-speed mobilization compared with the one organized by local, state and federal governments.

"We're working with the Coast Guard as well as some private sector clients," Blackwater spokeswoman Ann Duke said. Some companies are providing individual homeowners with protection against looters. For $150, Secure Source will check on your house.

"They want someone to drive by a few times a day and make sure it's not being looted," Nicastro said. "Some have us actually sitting on property to protect it. Some we are escorting in and want to get back into their home." Armed security stationed at the home costs between $700 and $2,000 a day, Nicastro said.

Before Katrina hit, Louisiana had about 185 private security companies licensed in the state, according to Wayne Rogillio, executive secretary for the Louisiana State Board of Private Security Examiners. By Friday, 33 more companies had registered.

John Moritz, who owns Moritz and Associates, a security firm in Houston, said Louisiana officials have been helpful and welcoming to private security personnel. "If you're properly licensed and all of your ducks are in a row, you can get over there," said Moritz, whose security personnel were hired to guard Gulf Coast casinos.

Until New Orleans engineers are able to pump out the floodwaters, security companies will continue to pour into the city and work with businesses and homeowners in retrieving and protecting their belongings.

"We're getting requests for all kinds of things," Nicastro said. "We've had one person who called to say, 'I've got my Lamborghini in the French Quarter, and I have to get it out.' " The client told Nicastro he only cared about his cat and car.

Labels: Kroll, Louisiana

Want a Hedge Fund? Here's Your Homework

By Geraldine Fabrikant
New York Times
September 11, 2005

IF you're thinking about investing in a hedge fund, how can you steer clear of the likes of the Bayou Group, the recently imploded hedge fund company and brokerage firm run by Samuel Israel III? Unfortunately, getting information about individual hedge funds isn't easy.

While hedge funds have generally had positive returns, experts point out that some of them can be big money losers - and that this makes the decision to invest in any single fund a very risky business. A variety of databases provide information about hedge funds, but they are by no means infallible, and in any case many of them are often unavailable to the average investor.

The collapse of Bayou is a case in point. Federal prosecutors in Manhattan sued Bayou on Sept. 1, saying the company had defrauded investors since 1998 by misrepresenting the fund's performance. The complaint said that Bayou had misstated its assets and that its books, which it had claimed were evaluated by independent auditors, were certified by a bogus accounting firm whose registered agent, Daniel Marino, was also the chief financial officer of Bayou.

The case against Bayou began to develop in May, when Arizona authorities seized $101 million held by a man to whom Mr. Israel had turned it over in a seemingly desperate effort to make some fast money to cover his fund's losses.

For hedge fund investors determined to avoid such debacles, there are some free Web sites that offer data on legal and financial developments, including the sites of the Securities and Exchange Commission (www.sec.gov) and the National Association of Securities Dealers (www.nasd.com). While such sites contain a wealth of information, the often do not include the most telling signs of trouble in a hedge fund.

Randy Shain, the co-founder of BackTrack Reports, which researches hedge funds for institutions and some wealthy individuals, says that in the Bayou case, several red flags - including questions about Mr. Israel's character - would not have been evident to people contemplating an investment in the fund. For example, it would have been difficult to learn from publicly available data that Mr. Israel had exaggerated his position at one hedge fund, had been charged with drunken driving and had been accused in a lawsuit by a former employee of violating securities regulations.

A litany of problems like this is hardly typical of hedge fund managers, but it does underscore how difficult it is to vet a fund, said Charles Stevenson, a veteran hedge fund manager who now runs the Navigator Diversified Strategies fund, which is a fund of hedge funds. (A fund of funds is a group of individual hedge funds that has been assembled by a third party, an arrangement that provides diversification and, perhaps, a margin of safety.) "If a manager's character is not reliable enough for you to trust them with your wallet," Mr. Stevenson said, "then the returns will be less relevant than whether they actually return any of your money."

In promotional material for the Bayou funds, Mr. Israel told investors that he had worked as the head trader at Omega Advisors, a hedge fund run by Leon Cooperman, a former Goldman Sachs partner. But Mr. Israel had misrepresented the length of his employment at Omega as well as his position there, Mr. Cooperman said in an interview. Mr. Israel had worked there as a trader for 18 months, but had not been there for four years as the head trader as he had claimed, Mr. Cooperman said.

Many hedge funds do not have a public relations operation geared toward answering such questions raised by outsiders. Would Mr. Cooperman have taken a call about Mr. Israel's credentials from a prospective investor in the Bayou funds? "I can't answer that," Mr. Cooperman said. "If somebody calls me for a reference check, I will respond factually and appropriately. But certain firms are very cautious about talking about former employees."

Another cautionary piece of news for Bayou investors should have been that while Omega oversees two funds of hedge funds that invest money with 25 different managers, Mr. Israel's group wasn't among them. "We never invested in Sam Israel's hedge fund nor did one trade with his securities company," Mr. Cooperman said.

Promotional materials also stated that Mr. Israel began his career at F. J. Graber & Company, a money management firm geared "toward high-velocity trading" and run by its founder, Fredric Graber. One person who knew both men, but requested anonymity, recalled that Mr. Israel had worked for Mr. Graber as a summer intern, a position arranged through a family friend, but added that Mr. Israel "never had a leadership role" at the firm. Mr. Graber, who closed his firm some years ago, could not be reached for comment.

Potential investors might also have been concerned if they had learned other information. Mr. Israel had been arrested in New York State in 1999 and accused of "driving under the influence" and charged with criminal possession of a "controlled substance," Mr. Shain of BackTrack Reports said; the case was discontinued a year later. That case was reported without elaboration on LexisNexis, a subscription data base, where Mr. Shain's firm found it while researching Bayou for a potential investor. In order to get details about the case, Mr. Shain had to send a researcher to State Supreme Court in Manhattan.

Sometimes red flags are more immediately visible. The documents that Bayou made available to its investors say that Richmond-Fairfield Associates was Bayou's accounting firm. Charles Levenberg, a private investigator who researches hedge funds, said that lack of information about the accounting firm was a warning sign. "If they are not using somebody you have heard of, that is a big red flag," he said. "You have to wonder why." The government has contended that Richmond-Fairfield was controlled by Bayou.

Evidence of possible problems can sometimes be uncovered in news reports. James R. Hedges IV, a partner at the Imperium Partners Group, a hedge fund based in New York, recalled that in 2002 his firm was looking into an investment in the Lancer Group, a hedge fund based in Manhattan. But Mr. Hedges said he had seen a news report about a lawsuit filed in Federal District Court in Miami that same year in which the S.E.C. had accused Bruce Cowen, a managing director of the Lancer Group, of participating in a conspiracy to divert funds from Lancer investors and, ultimately, funnel some of it to his own pocket. That information "told us to stay away" from the Lancer Group, Mr. Hedges said.

A year later, the S.E.C. accused the Lancer Group of inflating the net asset values of its funds in an effort to mislead auditors and attract investors. The agency continues to seek fines, permanent injunctions against the group and penalties. For investors who are intent on picking hedge funds themselves, despite the risks, experts say that it may pay to subscribe to services that track lawsuits. For example, an investor can subscribe to Pacer, an online index to federal civil, criminal and bankruptcy cases nationwide.

A Pacer subscriber could have found that a suit was filed against Bayou in 2003 in Federal District Court for the Eastern District of Louisiana by a former employee, Paul T. Westervelt Jr., and his son. The plaintiffs contended that Bayou had failed to provide them with necessary business documents and that Mr. Westervelt discovered "possible violations of the S.E.C. regulations governing the operating of hedge funds."

The case has moved from federal court to arbitration. Lawyers on both sides did not return phone calls seeking comment. In 2004, Mr. Israel wrote to investors telling them of the suit. But an earlier warning of a former employee's decision to sue the company might have been helpful to investors. The problem for individual investors is that many of them "have made a lot of money doing something else," Mr. Shain said. "They have a false sense of security about their own sophistication in analyzing financials," he added.

To winnow out potential problems, investors may want to look for some common-sense warning signs. In addition to checking for evidence of possible deception or illegality, some analysts say they try to check whether the manager is in the midst of a difficult divorce, as Mr. Israel was, which can add psychological and financial pressures.

One basic metric is the manager's employment record. Michael Steinhardt, a manager who ran his own fund for 29 years and is now starting a group of exchange-traded funds, said, "A long track record is the best endorsement." In 1997, a fund run by Barbara Doran, who had previously been an institutional equity sales executive at First Boston and then a senior vice president at Lehman Brothers, shut its doors after losing 80 percent of its value. Ms. Doran had started the fund just three years earlier. At its height it was worth only $35 million. Ms. Doran declined to comment last week.

Of course, big financial institutions have made bad bets on hedge funds, too. Through a fund offered by an investment unit, J. P. Morgan had $662,602 in Bayou as of March 31, which it has written down to zero. A spokeswoman for J. P. Morgan said that as a result of the investigation, the firm was no longer marketing the fund to investors. But over all, the odds favor big institutions. "They have a better chance of weeding out the problem funds," Mr. Shain said.

Labels: Bayou Group, Louisiana, Milberg

Jones Day Building
311 First Street, NW
7th Floor
Washington, DC

Labels: Louisiana

Class Action Could Mean Billion-Dollar Exposure for Merck - Multistate class of third-party payers would be entitled under Consumer Fraud Act to treble damages and attorney fees

Tim O'Brien
New Jersey Law Journal
September 2, 2005

After Merck & Co.'s devastating loss in Texas several weeks ago in the first Vioxx case to go to a jury, the nation's eyes now turn to Atlantic City, where New Jersey's first case is set for trial on Sept. 12. There are about 5,000 personal injury suits filed nationwide, about half in New Jersey, over the Merck painkiller that has been linked to increased risk of heart attack or stroke, but lurking behind those thousands of cases is a single one that could pose the greatest danger to America's third-largest drug company.

On July 29, in the midst of the trial in Texas, New Jersey Superior Court Judge Carol Higbee certified a national class action covering every private third-party payer that allowed members of its health benefits plan to buy Vioxx. With 20 million Vioxx users in the United States alone since 1999, Merck's exposure could be well into the billions if it loses the case, International Union of Operating Engineers Local 68 Welfare Fund v. Merck & Co. Inc.

The majority of Vioxx purchases were through plans run by insurance companies and health maintenance organizations. Unlike the thousands of individual personal injury claimants, Local 68 lawyers don't have to prove that anyone suffered injury. The suit was filed under New Jersey's plaintiff-friendly Consumer Fraud Act, under which all that need be proved is that the third-party payers were influenced by unconscionable Merck business practices -- primarily deceptive marketing and promotion of Vioxx, either affirmatively or by omitting data such as the possibility of heart attacks.

The Consumer Fraud Act does not require proof that the buyer relied on the allegedly false advertising or that there is a specific causal link between a purchase and the marketing: only that there was a "causal nexus between the concealment of the material and the loss." If the engineers' union wins, all third-party payers nationwide can recoup payments to the company, and under the CFA they are entitled to collect treble damages as well as attorney fees. Assuming 10 million users each bought $1,000 worth of Vioxx through their benefits plan (Merck charged $72 for a 30-day supply), a plaintiffs' verdict would come to $10 billion plus fees and expenses.

Lead Local 68 lawyer Christopher Seeger, of Seeger Weiss in New York and Newark, and co-counsel John Keefe Jr., of Lynch Keefe Bartels in Shrewsbury, N.J., note that some carriers, HMOs, unions or plan administrators could opt out of the class, though none has so far. The class excludes government entities and the Medicaid and Medicare programs.

Merck lawyers Diane Sullivan of Dechert in Princeton and Jeffrey Judd of O'Melveny & Myers in San Francisco filed a motion for leave to appeal Higbee's class certification, or interlocutory appeal, with the Appellate Division on Aug. 18. The defense counsel argue in their brief that Higbee erred in deciding that under New Jersey's choice-of-law rules such a national class dealing with the CFA should apply to out-of-state transactions. The Merck lawyers further argue that the CFA requires individualized proof of causation by each class member.

The certification of the third-party class was the second big blow dealt to the company by Higbee, the judge the New Jersey Supreme Court designated in 2003 to handle all the state's Vioxx litigation. In July 2004, she denied Merck's motion to dismiss the Consumer Fraud Act claim for lack of standing. Merck lawyers argued that HMOs and insurance companies can't be considered consumers under the CFA and are therefore not entitled to the law's protections. Only individuals may sue, Merck contended.

But Higbee ruled that Merck's attempt to limit the consumer under the act to "the one who actually takes the medication or uses the product is too simplistic." The focus, she said, should be on the "misrepresentation causing a 'person' to pay for something they otherwise would not have been willing to pay for because of the higher cost." The company has already lost an interlocutory appeal on its move to dismiss based on standing. The appeal on the merits remains.

Merck would have been able to remove the case to federal court under the Class Action Fairness Act of 2005, but the case was filed before the law was passed. The class certification has put Merck in a scrambling mode. Higbee herself said in her ruling that "there is no controlling Supreme Court or Appellate Division level decision as to whether [the Consumer Fraud Act] can be applied to a class action involving out of state plaintiffs and a New Jersey defendant." She rejected defense arguments that such a multistate class action would be unmanageable because the claims are predominately individual and the state's choice-of-law rules require that the consumer fraud law of the home state of each putative class member apply.

The judge analyzed the consumer fraud laws of every state, and, after acknowledging that New Jersey probably has the strongest one, concluded there is nothing in any state or federal law barring such a class certification here. She found that Local 68 meets all the requirements of the class action rules -- it is representative of the class; its claims are typical of other third-party payers nationwide; it's impractical to try so many plaintiffs separately; there are common issues of law and fact; and the plaintiffs attorneys are competent to represent the class.

As a result, Higbee concluded that the case belongs in New Jersey under state law. "There does not appear to be any state with stronger ties to this litigation than New Jersey," she wrote, citing all the research and development, policy decisions, marketing operations, manufacturing and even press releases generated by Merck in the state. "Does New Jersey have any reason not to protect consumers (third-party payers) from other states from fraud committed by a New Jersey corporation? … No. … Do other states have any interest in denying their citizens the protection of New Jersey law if it offers them more protection than the law of plaintiff's state? … No."

Seeger, who is also co-lead liaison counsel to the 1,800 cases consolidated before U.S. District Judge Eldon Fallon in New Orleans, says, "I believe there are similar class action rulings for settling purposes, but I agree that this seems to be the first ruling regarding New Jersey's CFA anywhere for a litigation class."

Merck's more immediate battle in New Jersey is the first personal injury trial, Humeston v. Merck & Co., ATL-L-2272-03, set for jury selection in two weeks. Merck filed a motion to postpone the trial's start for 45 days, citing a "media blitz" after the first Vioxx trial. Higbee turned down that request Monday, also rejecting several other Merck motions related to the upcoming trial.

Following Humeston will be 2,311 cases, though the number continues to rise almost daily. The plaintiffs come from 33 states. Unlike cases filed in other states, the defense can't have them removed to federal court -- where the rules of evidence tend to favor defendants -- because Merck is a New Jersey company. Merck has vowed to vigorously fight the suits notwithstanding a hint by its general counsel last week that some may be settled on a case-by-case basis.

The company is expected to argue that Frederick Humeston of Boise, Idaho, who took Vioxx for two months before suffering a heart attack in 2001 at age 56, had other risk factors, including clogged arteries, a weight problem and a lack of exercise. Seeger, who represents Humeston and another 225 plaintiffs, denies that and says Humeston has long needed painkillers for a knee injury from a combat wound in Vietnam. Calling his client "a two-time Purple Heart decorated Marine," Seeger notes that "it's gonna be hard to keep his service out of the case because that's why he took Vioxx."

Both sides jointly selected Humeston in a process, conducted by Higbee, that initially whittled the selection to five plaintiffs. Dechert partner Sullivan is expected to try the case for the company, which has also brought in Williams & Connolly partner Stephen Raber and Christy Jones of the Jackson, Miss., firm of Butler, Snow, O'Mara, Stevens & Cannada.

Seeger and associate David Buchanan, who has taken the lead in much of the New Jersey litigation, know more about the Vioxx litigation nationwide than anyone, Higbee said in concluding that Seeger Weiss is qualified to represent the third-party payer class. The firm, having led the discovery process, is the depository of 7 million documents produced so far, according to the judge. Seeger had filed the class action and many related cases before Merck withdrew Vioxx 11 months ago.

But whatever the outcome of Humeston -- other cases are set to go shortly in California and Alabama as well as in federal court in Louisiana -- the Local 68 case is expected to go to trial next year. Plaintiffs' co-counsel Keefe calls it a simple case: "We say three things. Vioxx was no more efficacious than over-the-counter drugs; the plans were deceived into paying 800 percent more than those OTC drugs; and the company did not disclose the risk of cardio problems."

Labels: Louisiana, New York AG

Via Reuters.com:

AmSouth units may face SEC civil action over funds

Aug 24, 2005
Reuters

NEW YORK, Aug 24 (Reuters) - AmSouth Bancorp, a large southeastern U.S. regional banking company, on Wednesday said the U.S. Securities and Exchange Commission may recommend civil action against its banking and asset management units for possible securities violations related to its mutual fund business.

The Birmingham, Alabama-based company said its AmSouth Bank and AmSouth Asset Management Inc. units on Tuesday received a "Wells notice" from the SEC's Los Angeles office, indicating that agency staff may recommend civil action, and giving the units a chance to respond.

AmSouth said the notice relates to the SEC's investigation of the fund services unit of Bisys Group Inc., which provides administrative support to financial companies. That probe concerns several fund providers, people familiar with the matter have said.

Last month, New York-based Bisys said it was in talks to settle an SEC probe into its fund services business, and might pay as much as $25 million. It previously said the agency was investigating its payment of marketing and distribution costs for shares of some mutual fund clients.

AmSouth said it has been cooperating with the SEC. It also said its bank and asset management units, as well as a committee of AmSouth Funds' board of trustees, are reviewing the matter and taking appropriate steps to protect fund shareholders, including making payments to AmSouth funds.

AmSouth agreed in June to sell its 23 mutual funds, which have about $5.5 billion of assets under management, to Pioneer Investment Management Inc. for an undisclosed price. Rick Swagler, an AmSouth spokesman said that sale is proceeding toward a September completion, subject to fund shareholder approval. SEC spokesman John Heine declined to comment. Bisys did not immediately return a call for comment. Pioneer was not immediately available for comment. Pioneer is a unit of UniCredito Italiano SpA.

AmSouth has about $50.5 billion of assets, and operates more than 685 branches in Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee. AmSouth shares fell 29 cents to $26.33 in Wednesday trading on the New York Stock Exchange. The company announced the Wells notice after U.S. markets closed.

The original article appears here.

-- MDT

Labels: Louisiana

Labels: Louisiana

Agents raid homes of New Orleans congressman

August 4, 2005
Associated Press

NEW ORLEANS (AP) — Federal authorities are tight-lipped about a two-city raid in which agents searched the Washington and New Orleans homes of a Louisiana congressman, hauling away boxes and bags from one of the residences. The Justice Department refused to say what agents were looking for Wednesday during the searches of U.S. Rep. William Jefferson's homes and vehicle, as well as the office of his longtime financial adviser.

Jefferson, 58, an eight-term Democrat from New Orleans, said in a statement issued by his office that he did "not know the extent or precise nature of this investigation" and said he was cooperating fully.

"There were searches executed today in connection with an ongoing criminal investigation," said Bryan Sierra, a spokesman for the Justice Department. "As it is a criminal investigation we will not be able to comment any further."

Jefferson's office said the congressman was in New Orleans and was not available for further comment. There was no sign he was at his home as FBI agents worked inside for several hours through the afternoon.

Shortly after 5 p.m., at least 15 agents emerged from Jefferson's New Orleans home, 12 of them carrying bags and boxes. Dozens of neighbors stood along the upscale street watching the raid and talking about it. Agents also searched the office of accountant Jack Swetland, who has handled campaign finances for Jefferson.

Jefferson's name surfaced earlier in a case involving his brother-in-law, a former state judge convicted in June of mail fraud in a wide-ranging probe of bail bond corruption in suburban New Orleans...

More bayou-state intrigue can be found in the full article. Josh Marhsall's TalkingPointsMemo also has a clip from a statement released by Jefferson's office. Click on over to check it out.

Labels: Louisiana

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Labels: database, identity theft, Louisiana