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The Morning Risk Report: Volkswagen Ex-CEO Faces Fresh Fraud Charges Over Emissions Scandal
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Martin Winterkorn, former CEO of Volkswagen, faces charges of serious fraud in relation to the company’s diesel cheating scandal. PHOTO: JULIAN STRATENSCHUKTE/EPA/SHUTTERSTOCK
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Good morning. German prosecutors charged former Volkswagen AG Chief Executive Martin Winterkorn and four others with fraud relating to emissions cheating, dealing a blow to the car maker’s efforts to move past the scandal.
In an indictment made public Monday, the individuals also were accused of engaging in unfair competition, embezzlement, tax evasion and giving false witness. The charges could result in substantial fines, the return of nearly €11 million ($12 million) in salary and bonuses and as much as 10 years in prison, making the indictment among the most severe lodged against an executive in Germany.
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The central allegation of the German indictment against Mr. Winterkorn, who stepped down in 2015, is that he failed to act after learning about Volkswagen’s efforts to deceive regulators, consumers and investors by selling millions of vehicles rigged to cheat on diesel-emissions tests.
With criminal litigation against the company settled in most places, prosecutors are now targeting individual employees. Mr. Winterkorn and several other former executives have already been indicted on similar allegations in the U.S., but those charges might not move forward because Germany doesn’t extradite its citizens for prosecution in a foreign country, making it unlikely Mr. Winterkorn will stand trial in the U.S. The indictment could also bolster other lawsuits against Volkswagen.
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From Risk & Compliance Journal
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U.S. Treasury Targets Islamic State Financial Network With Sanctions
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The U.S. Treasury Department on Monday imposed sanctions on seven individuals and a money-services business that the agency said helped move money for Islamic State, Risk & Compliance Journal’s Kristin Broughton reports.
The action comes less than a month after U.S.-backed forces captured the last territory controlled by Islamic State in Syria, marking the demise of the group’s so-called caliphate.
The Treasury’s Office of Foreign Assets Control targeted six members of the Rawi Network, a financial organization based in Iraq that the department says helped Islamic State facilitate transactions across Europe, Africa and the Middle East.
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UniCredit banks involved in the settlement will be required to implement and bolster compliance programs to minimize the risk of additional violations, the Treasury Department said. PHOTO: STEFANO RELLANDINI/REUTERS
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Banks owned by UniCredit Group have agreed to pay $1.3 billion to settle claims they processed payments allegedly in violation of multiple U.S. government-sanctions programs.
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Authorities in China are investigating Swedish telecommunications-equipment giant Ericsson AB while the firm’s Chinese rival, Huawei Technologies Co., moves to counter a U.S. campaign to limit its business, the latest signs of global jockeying to shape next-generation 5G information networks.
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American Airlines Group Inc., after saying for months that its pilots didn’t need additional ground-simulator experience on Boeing Co. 737 MAX jets, is moving to add such instruction to existing training sessions, according to industry officials.
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Two House panels have issued subpoenas to Deutsche Bank and other financial institutions, as Democrats continued to pursue an inquiry into President Trump’s financial interests.
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Actress Lori Loughlin and her husband, fashion designer Mossimo Giannulli, have pleaded not guilty to charges of conspiracy to commit mail fraud and launder money in connection with the college-admissions cheating scandal.
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Vladimir Putin has helped resolve conflicts within the oil cartel by wielding Russia’s power as a major oil producer. That has given the country considerable influence over the direction of the world’s $1.7 trillion crude-oil market, and more power in the Middle East.
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The logo of Huawei is seen at its showroom in Shenzhen, China, on March 29. PHOTO: TYRONE SIU/REUTERS
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President Trump lashed out at Huawei Technologies Co. in a tweet after a former Obama-era official registered as a lobbyist for the Chinese telecom giant in Washington. Samir Jain, a former senior director for cybersecurity policy for the Obama White House, registered as a lobbyist for Huawei on national-security issues related to a defense-policy bill that bars federal agencies from buying equipment from the Chinese company, according to a disclosure form.
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Meanwhile, U.S. officials' warnings to telecommunications executives to steer clear of Huawei on national-security grounds haven't stopped AT&T Inc. from using the Chinese company’s equipment in Mexico.
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Gwynne Shotwell, president and chief operating officer of SpaceX, and NASA astronaut Bob Behnken at SpaceX headquarters in Hawthorne, Calif., last year. PHOTO: PATRICK T. FALLON/BLOOMBERG NEWS
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Elon Musk’s Space Exploration Technologies Corp. is raising another $500 million in funding amid internal questions about the viability of an internet-via-satellite business considered key to the company’s growth.
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Waste Management Inc. is buying competitor Advanced Disposal Services Inc. for around $2.9 billion in one of the biggest solid-waste company acquisitions in more than a decade.
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Contract drug manufacturer Catalent Inc. said Monday it has agreed to acquire Paragon Bioservices Inc. for in $1.2 billion in cash, to help expand its gene-therapy manufacturing capabilities.
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South Korea’s second-largest carrier, Asiana Airlines Inc., will put up for sale the one-third stake owned by its controlling family as part of a turnaround plan creditors are demanding for the debt-laden conglomerate.
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Corie Barry will become Best Buy’s chief executive following the company’s annual shareholder meeting in June. PHOTO: SARAH STACKE FOR THE WALL STREET JOURNAL
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Best Buy Co. boss Hubert Joly, will step aside as chief executive, after leading the turnaround of an electronics retailer that many thought would suffer the same fate as other big-box chains facing competition from Amazon.com Inc. Mr. Joly, an outsider who joined the retail chain in 2012, will hand over the CEO job to finance chief Corie Barry in June. Ms. Barry will be one of the few women and one of the youngest to lead an S&P 500 company. Mr. Joly will serve as executive chairman and remain an employee.
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Best Buy will likely seek out a transformation expert to fill its finance chief vacancy as the consumer electronics retailer aims to maintain its growth pace after a successful turnaround.
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