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The Morning Risk Report: Treasury Unit Warns Banks of Unemployment Fraud
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The Treasury's Financial Crimes Enforcement Network, based in Vienna, Va., highlighted possible indicators of illicit activity when it comes to unemployment insurance. PHOTO: EPA/SHUTTERSTOCK
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Good morning. U.S. unemployment claims, which have surged during the coronavirus pandemic, are amplifying a compliance risk for financial institutions: unemployment insurance fraud.
The Treasury Department’s Financial Crimes Enforcement Network issued an advisory, alerting banks to red flags that could indicate illicit activity, including emerging schemes exploiting vulnerabilities created by the pandemic. In particular, U.S. authorities and financial institutions have spotted instances of fraud related to unemployment payments, according to FinCEN.
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Unemployment insurance is a prime target for fraudsters, given the high volume of people who have lost their jobs due to the pandemic, according to Raymond Dookhie, a managing director at compliance advisory firm K2 Intelligence LLC. “The financial systems that are set up to monitor fraud in this current environment are being overloaded,” he said.
Smaller financial institutions, which often have less sophisticated monitoring systems or fewer resources to investigate suspicious activity, are particularly vulnerable, Mr. Dookhie said.
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The Pilgrim's Pride plant in Cold Spring. Minn. PHOTO: DAVE SCHWARZ/ASSOCIATED PRESS
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Chicken giant Pilgrim’s Pride said it has agreed to a plea deal with the U.S. Justice Department to resolve price-fixing charges, and will pay a fine of $110.5 million.
A guilty plea by the second-largest U.S. chicken processor by sales will make Pilgrim’s the first company to admit in court to what prosecutors have alleged was a roughly seven-year effort across much of the U.S. chicken industry to inflate prices. That coordination pushed up poultry prices paid by fast-food chains and other chicken buyers, prosecutors alleged.
Pilgrim’s said the plea agreement provides that the Justice Department will bring no further charges against the Colorado-based company, and doesn’t recommend an outside compliance monitor. The agreement doesn’t require any restitution or probationary period, the company said. A Justice Department spokeswoman didn’t immediately respond to a request for comment.
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A federal judge in California denied bids by Theranos founder Elizabeth Holmes and former top executive Ramesh “Sunny” Balwani to dismiss the criminal charges they face in connection with the disgraced blood-testing startup. Ms. Holmes, 36 years old, is set to go to trial March 9 on charges she and Mr. Balwani defrauded investors out of hundreds of millions of dollars and deceived patients by lying about the reliability of Theranos blood tests. Mr. Balwani will face trial separately at a later date.
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Teladoc Health, the country’s largest publicly traded telemedicine provider, has sued rival American Well Corp. for alleged patent violations related to technology behind robot-like carts that connect hospitalized patients with specialists in real time via video.
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The World Trade Organization said the European Union may impose tariffs on $3.99 billion in Boeing jets and other U.S. goods annually as part of a long-running trade dispute.
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Democratic presidential nominee Joe Biden is edging left on a range of issues from student debt to stock buybacks, leaving both progressives and Wall Street Democrats guessing whose side of the financial-regulation fight he is on.
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President Trump asked the Supreme Court on Tuesday to delay the enforcement of a grand jury subpoena issued by New York state prosecutors for a swath of financial documents, including his tax returns.
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Meanwhile, the court denied a request by a group of Democratic lawmakers to review whether Mr. Trump’s continuing control of his business empire may have run afoul of a constitutional prohibition on receiving foreign gifts.
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Japanese steelmaker JFE Holdings ranks No. 4 in the environment category. A JFE plant in Japan. PHOTO: KIYOSHI OTA/BLOOMBERG NEWS
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A cluster of makers of heavy goods, from steel and cement to glass, leads the companies recognized this year for best practices in managing environmental risk, according to a new ranking by The Wall Street Journal. Meanwhile, pharmaceutical, biotechnology and banking businesses dominated the top of the social-capital category of the WSJ top 100 sustainably managed companies.
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Though it is unclear how long the vaccine trials will be paused, the delays demonstrate how challenging vaccines are to develop. PHOTO: JOHNSON & JOHNSON/ASSOCIATED PRESS
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The pause of Johnson & Johnson’s Covid-19 vaccine trials poses another setback for global efforts to develop a shot to protect lives and jump-start economies battered by the pandemic, as well as a reminder of the challenges of fast-tracking vaccine development.
J&J said Monday it had paused all trials of its vaccine, including a large-scale Phase 3 trial it started last month in the U.S., after a study volunteer developed an unexplained illness. J&J hopes to know within days whether it can resume testing. The halt comes a little more than a month after AstraZeneca PLC paused trials of a shot it is developing with the University of Oxford, citing similar reasons. AstraZeneca has since resumed trials in the U.K., but a large U.S. study remains on hold.
Meanwhile, a federally funded clinical trial testing an experimental Eli Lilly Covid-19 treatment has been paused due to a potential safety concern, the company said.
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Huge government spending to boost coronavirus-stricken economies has limited immediate risks to global financial stability while fueling a debt buildup that could spell trouble later, the International Monetary Fund said.
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Closed AMC movie theater near New York’s Times Square on Monday. PHOTO: ANGELA WEISS/AGENCE FRANCE-PRESSE/GETTY IMAGES
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AMC Entertainment Holdings, the world’s largest movie-theater company may run out of cash by year’s end if it doesn’t raise additional funds or get more people back to theaters following pandemic shutdowns that have disrupted businesses dependent on consumers gathering in public spaces.
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Delta Air Lines offered cautious optimism that demand for travel is starting to return but said its losses were mounting, as the coronavirus pandemic looks likely to continue weighing on travel for years.
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More workers, especially mothers with young kids, are struggling now while managing child care, remote learning and their jobs. Companies have rolled out and touted flexibility initiatives. But many employees remain afraid that asking for reduced hours or a more flexible schedule puts their career—or even their employment—at risk.
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