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Senate tackles banks over oil firms’ $63b capital flight

‘Cash taken out under suspicious circumstances between 2009 and 2014’

The Senate is investigating some banks for alleged collusion with some international oil companies (IOCs) to defraud the country.

Over $62,909,716,417 is said to have been taken out of the country under suspicious circumstances between August 2009 and December 2014.

The “Investigation of the pre-shipment inspection of export activities in Nigeria” is being conducted by the Senate joint committee on Finance, Trade and Investment, Gas, Petroleum Upstream, Banking, Insurance and other Financial Institutions, Judiciary, Human Rights and Legal Matters, and Customs and Excise.

A document obtained by The Nation showed  the banks were asked to submit copies of certified Nigeria Export Proceed (NXP) issued/or processed by them in respect of all crude oil and gas exported by Nigeria Agip Company Ltd, Chevron Nigeria Limited, Shell Petroleum Dev. Co. Nig. Ltd and their affiliates between April 1996 and December, 2016.

The banks are to submit all domiciliary accounts opened and /or closed within the period specified for crude oil and gas exported.

Two banks – Citibank and Standard Chartered Bank – appeared at the investigative joint committee on Thursday. Other banks said to be associated with the export of oil and gas will also appear.

A member of the committee, Senator Yusuf Yusuf (Taraba State), queried why funds brought into the country as oil export proceeds were wholly withdrawn a day after such proceeds were brought.

He said the probe became necessary because the banks should have ensured petroleum products exporters did the right thing by obeying the guidelines and laws of the country.

Yusuf said: “It is worrisome that money comes in today, tomorrow the same amount goes out of the country. The practice runs through statement of account submitted by the banks. The oil companies bring in $20 billion today and tomorrow $20 billion is taken out from the account.

“The banks are colluding with multi-national oil companies to defraud the country. The government relies on the banks; the banks are now colluding with the multi-national oil companies.”

He noted that it was obvious the country was not getting the correct export proceeds from oil and gas exports.

The lawmaker, who insisted that banks had the responsibility to abide by the law, said it was worrisome no indications were made about who paid for oil exports.

He noted that the committee was interested in why same company exports and pays for products without an indication of who actually buys the products and the corresponding bank.

The Chairman of the joint committee, Senator John Enoh, said the committee was interested in ensuring that banks are not colluding with IOCs to flout the laws of the country.

Enoh said the committee would take a critical look at the submissions made by the banks to come to terms with the true position of oil and gas exports proceeds processes.

A document submitted to the committee, which was obtained by The Nation, showed that Citibank Nigeria operates domiciliary export proceed accounts for ENI Group (three accounts), Chevron Group (six accounts) and Shell Group (two accounts).

The document also showed that Nigerian Agip Oil Company recorded a total export inflow valued at $15,372, 882,703.36

Chevron Group recorded $44,020,596,289.99. Shell group made a total inflow valued at $3,516,237,425.79 giving total of $62,909,716,417 billion.

The committee resolved to screen documents submitted by the banks before coming up with its recommendations.

The committee expressed its determination to get to the root of  pre-shipment inspection of export activities.


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Govt looks to scrap deposit insurance norm under company law

Companies may accept deposits without deposit insurance contract till March 31, 2018.

New Delhi: The government is considering doing away with the mandatory deposit insurance requirement for deposit-taking firms under the company law. The deposit insurance provision is part of the Companies Act, 2013 but is yet to be made operational.

The Corporate Affairs Ministry, which is implementing the Act, has been extending the deadline for implementation of this particular provision. Sources said the ministry is looking at scrapping the deposit insurance requirement as suitable insurance product for the purpose is not available in the market.

The view has emerged that it would be difficult to have such an insurance product, they added. Implementation of the deposit insurance provision has been delayed over the years.

A significant part of the Companies Act came into force from April 1, 2014. This provision of the Act was made as part of larger efforts to safeguard the interest of investors amid instances of ponzi schemes. In a notification issued on May 11, the ministry again extended the deadline for complying with the deposit insurance norm to March 2018.

Interestingly, the ministry had proposed doing away with the norm in the bill introduced in 2016 to amend the Companies Act. It had proposed omitting requirement relating to deposit insurance and provide that deposit repayment reserve should not be less than 20 per cent of the amount of deposits maturing during the following financial year.

The bill was introduced in the Lok Sabha in March 2016 and then it was referred to the Standing Committee on Finance. The panel submitted its report on the legislation in December 2016. In March this year, the Cabinet approved the amendments to the bill after taking into consideration the suggestions made by the panel.

However, the bill was not introduced during the Budget session of Parliament that ended last month. Sources said the revised bill has retained the proposal to omit deposit insurance clause. Meanwhile the notification issued by the Ministry on May 11 has amended the Companies (Acceptance of Deposits) Rules, 2014.

“…  the companies may accept deposits without deposit insurance contract till March 31, 2018 or till the availability of deposit insurance product, whichever is earlier,” the notification said. 

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India in deep slumber as ransomware attacks, says cyber law expert

HYDERABAD: A few hours after the world woke up to the WannaCry ransomware attack on Saturday, the Telangana state police put out the usual ‘no need to panic’ message.

T Krishna Prasad, additional director-general for technical computer services said the Telangana police website was working well enough, why worry?

Later in the day, S Jayaram, assistant commissioner of police in the cyber crime division of Cyberabad followed up with a wise advisory: “So far we have not received any complaints. Servers must be secured. Systems must be protected with licensed software. The public must refrain from using pirated software. People should be careful about the emails they receive and check before downloading any email attachment.”

However, Supreme Court lawyer and cyber law expert Pawan Duggal said the WannaCry ransomware attack was a clear case of the world caught napping. And India is in deep slumber. “These are only initial reports. Only 24 hours have passed. The actual damage could be far more considering that cyber security is lax in India,” Duggal said.

“India is a green field for cyber crime as ransomware does not come under the IT Act or under the Indian Penal Code. There is no national cyber security legislation that can elaborate the roles and responsibilities of stakeholders. As the threat has originated from beyond India, the investigations will end up at a dead end,” he added.

Bipin Chandra, the former president of Hyderabad Software Enterprises Association (HYSEA), said Indian IT companies are better placed to withstand a ransomware attack. “They have a heightened sense of security as a vast majority of them are B2B services firms. Their clients ask for a certain level of certification and regular audits. So security awareness is high,” he added.

Ransomware attacks are nothing new, he said. Organisations that don’t want to be vulnerable to attacks of the WannaCry kind should get their systems audited. System audit firms identify vulnerabilities and suggest hardware and software to plug the gaps.

Back in September 2016, Kerala’s government website was subjected to a ransomware attack. Again, in March this year, the Telangana Forest Department’s local network of 20 computers at its headquarters was found locked by unidentified hackers who locked the files using the RSA-4096 virus. The virus infected the computers after one officer inadvertently downloaded an image file and shared it in the local network. The hackers, suspected to be Russian, then demanded an undisclosed ransom amount to unlock the data.

However, the department failed to kill the ransomware as its encryption with a strong algorithm proved to be be a tough nut to crack.

As a member of the 25-member IT wing (Forest Management Information System, FMIS) of the department told New Indian Express then, “Being a government department, we could not think of paying the hackers a ransom. Besides, there was no guarantee that the hackers would restore the data after payment. The only option left was to forgo the data.”

After losing the battle to hackers, FMIS officials deleted the files in the affected computers and beefed up their IT security.

According to NIC, this was the first reported case of ransomware attack on a public system in the state.

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Foreign firms fall into line levying GST on online television, music and software

Netflix passed on the cost of GST in full to Kiwi subscribers in November, with price rises of between $2 and $2.50 a month.

MIKE BLAKE/REUTERS

Netflix passed on the cost of GST in full to Kiwi subscribers in November, with price rises of between $2 and $2.50 a month.

Most large foreign companies appear to be collecting GST on digital services they sell to New Zealanders, confounding the hopes of some consumers who hoped they wouldn’t play ball with the new law.  

A rule change that took effect in October, means foreign companies are supposed to add GST to the likes of internet television, streamed music,e-books and online computer games and software they that sell to Kiwi consumers from overseas.

The rule only applies if companies sell more than $60,000 of such services to New Zealanders each year.

There were doubts foreign firms would play ball, given Inland Revenue has no easy way to force compliance on companies that don’t have a presence in the country.

READ MORE:
* Australian delay means NZ could move in tandem on GST, says Retail NZ
* Spotify put GST on its invoices when it was not collecting the tax

But Inland Revenue said 135 foreign companies had registered to levy GST, in accordance with the law change. 

They are known to include most of the companies most impacted by the change, including Netflix and online music company Spotify.

Spotify increased the price of its premium streamed music service by $2 in January, and now charges $14.99 a month. Netflix also increased its prices by between $2 and $2.50 in November to reflect the GST change.

Inland Revenue spokesman Baden Campbell, said the tax department hadn’t attempted to estimate how many foreign companies should have registered to collect the tax.   

Some companies were still registering, suggesting compliance was not yet universal.

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But PwC tax partner Geof​ Nightingale, said the level of compliance appeared high. “I would assume that inside the 135 are most of the ‘big names’ that account for a big volume of digital services.”

Inland Revenue has forecast the tax change will bring in about $40 million a year.   

The Australian government is set to delay a broader tax change that would oblige foreign companies to levy GST on both digital services and physical goods that they ship to Australians.

The law change – which is being closely watched by New Zealand officials and lobbyists – was due to take effect in July.

But a senate committee has recommended delaying it until July next year.

Retail NZ spokesman Greg Harford said on Thursday, that the delay would mean New Zealand and Australia could move in tandem to ensure GST was levied on all overseas internet shopping purchases.

But Nightingale believed the delay would take some heat off the New Zealand government to move quickly on the issue.


 – Stuff

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UK’s PM pledges new powers to punish and tax social media firms

Britain's Prime Minister Theresa May addresses supporters and members of the media in front of the Conservative party's election campaign bus at an airfield north of Newcastle May 12, 2017. ― Reuters picBritain’s Prime Minister Theresa May addresses supporters and members of the media in front of the Conservative party’s election campaign bus at an airfield north of Newcastle May 12, 2017. ― Reuters picLONDON, May 13 ― British Prime Minister Theresa May pledged to create new powers allowing her to punish social media and communications companies that fail to look after users’ data, and to demand cash from firms to pay for policing the internet.

The election pledge comes after firms like Facebook and Twitter have been criticised the government for not doing enough to stop the spread of extremist content online or help victims of abuse.

May, who is expected to win a majority at the June 8 election, pledged to pass laws giving users new rights to access data held about them, and granting the government the power to enforce them with sanctions.

“The internet has brought a wealth of opportunity but also significant new risks which have evolved faster than society’s response to them,” May said in a statement.

“We want social media companies to do more to help redress the balance and will take action to make sure they do.”

Hospitals and doctors’ surgeries across England were forced to turn away patients and cancel appointments on Friday after a nationwide ‘ransomware’ cyber attack crippled some computer systems in the state-run health service.

The Conservative Party said it wanted to be able to tax the industry if it chooses to, citing similar plans already in force for the gambling industry.

“The Conservatives will also create a power in law for government to introduce an industry-wide levy from social media companies and communication service providers to support awareness and preventative activity to counter internet harms,” the party said in a statement. ― Reuters

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Cellino & Barnes dispute: Law firm hired Barnes’ brother and girlfriend

Stephen E. Barnes’ brother – attorney Richard J. Barnes – has worked for 16 years at the Cellino & Barnes law firm.

Stephen Barnes’ girlfriend, attorney Ellen Sturm, has worked there for eight years.

But when Barnes’ law partner – Ross M. Cellino Jr. – tried to get his daughter, Jeanna Cellino, a job in the law firm after she graduated from University at Buffalo Law School in 2012, Stephen Barnes said no. According to sources close to the Cellino & Barnes law firm, Barnes told his partner he didn’t want “nepotism” in the firm.

The refusal to hire Jeanna Cellino, an honors graduate of UB’s Law School, upset Ross Cellino, and it caused more than two years of hard feelings between the two partners.

But that disagreement was not the reason why Cellino launched a lawsuit this week seeking to dissolve the high-profile law firm, two lawyers who are supporters of Ross Cellino told The Buffalo News on Friday.

“Ross filed the lawsuit because he was upset about the management and direction of the firm, and some aggressive business practices,” one of the Cellino supporters said.

The attorney said Cellino & Barnes for years has been trying to steal clients from other firms. That allegation was also made by another Buffalo lawyer who spoke to The News on Friday.

“Ross told Steve and others in the firm that he wanted them to back away from that, to stop doing it. He couldn’t stomach it anymore,” said the Cellino supporter, who spoke on the condition of anonymity.

That allegation was denied on Friday during a News interview with the law firm’s managing partner, Robert J. Schreck.

“We emphatically deny that we have ever had a policy of stealing clients,” Schreck said. “We’re an advertising law firm. Potential clients see our ads, and they come to us. We don’t go to them. Many times, people have come to us because they were unhappy with their current attorneys. We will evaluate the case for them. Plenty of times, we will tell them, ‘Your attorney is doing things properly, stay with them.’

“Sometimes, the client will hear our analysis and decide to make a change – either going with us or deciding to go with another law firm. This happens in the legal field. On rare occasions, clients leave us and go to other law firms.”

In 2003, Cattaraugus County Judge Larry M. Himelein fined a Cellino & Barnes attorney $10,000 after finding that the attorney made false statements in an effort to get a client to leave another Buffalo law firm and sign up with Cellino & Barnes.

“That happened 15 years ago,” the attorney involved is no longer with Cellino & Barnes, and the law firm would never sanction such conduct, Schreck said.

Schreck added that he is not aware of any crusade by Cellino to change the law firm’s policies on taking on clients who had been with other firms. “If he made statements to that effect, I did not hear them,” he said.

Sources: Barnes’ refusal to hire Cellino’s daughter sparked rift

Schreck also addressed questions from The News involving Jeanna Cellino and the firm’s hiring of Stephen Barnes’ brother and girlfriend.

He said Jeanna Cellino – now a highly-respected trial attorney with another Buffalo law firm – had only recently graduated from law school when her father first suggested hiring her.

“At that time, she did not have the requisite experience that we were requiring for a new hire, and we did not have positions available in the Buffalo office,” Schreck said. “In fact, we have not hired anyone new for the Buffalo office since then.”

Schreck declined to discuss whether Cellino and Barnes – the law firm’s two founders – ever argued about Jeanna Cellino, but he discussed the hiring of Richard Barnes, who joined the firm in 2001, and Sturm, who was hired in 2009.

“Rich Barnes is a former assistant district attorney and he had 15 years of personal injury experience before he came here,” Schreck said. “He was a well-respected and well-liked attorney long before he came to Cellino & Barnes.”

“Ellen Sturm finished at the top of her class at UB Law School and was on the UB Law Review. She had worked for the Hodgson Russ law firm and had served as a confidential law clerk to Judge Eugene Pigott” in the state appeals court, Schreck said. “Any law firm in Buffalo would have hired her in a second.”

This Buffalo News file photo from 1997 shows Ross Cellino and Stephen Barnes in front of one of their billboards off Fuhrmann Boulevard. (Sharon Cantillon/Buffalo News file photo)

Did nepotism play a role in either of those hirings?

“They were hired because of their qualifications, which were excellent,” he said.

He also confirmed that two of Cellino’s relatives – his brother-in-law, Denis Bastible and his nephew, Christian Oliver – are attorneys at Cellino & Barnes.

“Yes, it is accurate that they work here, and they are both outstanding attorneys,” Schreck said.

According to sources close to the law firm, Ross Cellino also has a total of five daughters and sons who are lawyers, none of whom work at Cellino & Barnes. The sources said Ross Cellino, who has been unavailable for comment, has been at work in the firm’s Buffalo offices this week.

The News asked Schreck whether the office atmosphere has been awkward this week.

“I would just tell you that, for us, it is business as usual,” Schreck said. “Our clients and their cases are top priority. Our attorneys are working full speed ahead, 24-7, to serve them. None of that has been changed by a lawsuit.”

The lawsuit filed by Cellino has shocked attorneys in the legal community, who said it is highly unusual for an attorney to file such a legal action against his own law firm – especially one that he co-founded. Cellino and Barnes have hired two legal heavyweights – Terrence M. Connors for Cellino, and Gregory P. Photiadis for Barnes.

Cellino & Barnes appear headed for ‘divorce’

Attorneys Christopher J. O’Brien and William F. Savino said they hope everyone involved keeps in mind that the clients – not the battling millionaire attorneys – should remain top priority.

“I am sure that a lot of their clients are worried and wondering what is going to happen. But I am also sure that the judge in this case will make sure that the clients are properly served, no matter what happens with the lawsuit,” Savino said.

State Supreme Court Judge Deborah A. Chimes, who took the unusual action of sealing court papers in the case, has scheduled court proceedings for May 19. Her office declined to comment when a News reporter asked for an explanation of why the case has been sealed. Other state court officials said they do not know the reason for the secrecy.

“It is very unusual,” said Savino, a business attorney for 42 years. “I’ve rarely seen court papers sealed in a case like this.”

Schreck and Connors both said they could not discuss the allegations in the lawsuit, because the papers are sealed.

“What I can say is that there are no financial irregularities in this law firm, and I am unaware of any that have been alleged,” Schreck said.

So far, the two main participants – Barnes and Cellino – have been silent on the case.

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Lawyers who said Trump has no ties to Russia named Russian law firm of 2016

  • Morgan Lewis honored with prize by Chambers Europe
  • Law firm said Trump had no financial ties to Russia ‘with a few exceptions’
  • Sean Spicer refuses to deny that Trump is taping White House visitors

Donald Trump with his wife Melania on Friday. Trump has refused to release his tax returns, breaking with decades of tradition.



Donald Trump with his wife Melania on Friday. Trump has refused to release his tax returns, breaking with decades of tradition.
Photograph: Yuri Gripas/Reuters

Lawyers who said Trump has no ties to Russia named Russian law firm of 2016

  • Morgan Lewis honored with prize by Chambers Europe
  • Law firm said Trump had no financial ties to Russia ‘with a few exceptions’
  • Sean Spicer refuses to deny that Trump is taping White House visitors

The law firm that said Donald Trump has no financial ties to Russia “with a few exceptions” was recognized in 2016 as Russia law firm of the year.

In the letter released on Friday – but dated 8 March – Morgan Lewis tax partners Sherri A Dillon and William F Nelson said a review of Trump’s tax returns for the past 10 years did not find income from Russian sources during that period, save for “a few exceptions”.

Trump has refused to release his tax returns, a break with decades of tradition. The law firm did not release copies of the returns, rendering its assessment of the documents impossible to verify independently.

Morgan Lewis was honored by Chambers Europe, a division of publisher Chambers & Partners that ranks law firms based in the region. According to a press release dated 2 May 2016: “The prestigious honor was announced at the publication’s recent annual awards dinner in London, where firms from 24 countries were recognized.”

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Morgan Lewis did not immediately return a request for comment. According to its website, the firm’s Moscow office “provides full-service business representation”, including advice on “corporate and finance matters; mergers and acquisitions; transactional finance; litigation and international arbitration; energy and natural resources projects; real estate property transactions; labor and employment issues; immigration; and a wide range of regulatory matters”.

Trump’s presidency has been overshadowed by allegations of collusion between aides and Russian officials. On Tuesday, Trump fired James Comey, the FBI director who had been leading the agency’s inquiry into Russian interference in the US election.

The White House and the president have provided conflicting rationales for the decision. Initially, the White House said the president acted on the recommendations of his attorney general, Jeff Sessions – who has recused himself from the federal Russia investigation after failing to disclose meetings with the Russian ambassador – and the deputy attorney general, Rod Rosenstein.

In an interview on Thursday, Trump contradicted this line. Flatly denying any collusion between his campaign and Russia, he told NBC News that he had decided to fire Comey.

The president said: “I said to myself, I said: ‘You know, this Russia thing with Trump and Russia is a made up story, it’s an excuse by the Democrats for having lost an election that they should’ve won.’”

On Friday, a copy of the letter from the Morgan Lewis partners was made public by the White House after the president issued a series of tweets that appeared to threaten Comey and suggest that he had been secretly recording official meetings.

White House press secretary Sean Spicer later said the president’s tweet was not a threat and that he had “nothing further to say”.

The exceptions outlined in the letter from Trump’s lawyers include selling a home to a Russian billionaire for $95m, twice what Trump paid for it three years before, and profits from staging the Miss Universe contest in Moscow in 2013.

Trump has repeatedly denied having any investments in or ties to Russia, despite statements to the contrary from himself and family members in recent years.

Trump has, for example, worked closely with Russian-born businessman Felix Sater, the managing director of Bayrock, to develop the Trump Soho hotel in New York. Bayrock was founded by Tevfik Arif, a former Soviet official.

In a 2008 interview, Trump’s eldest son, Donald Trump Jr, said: “Russians make up a pretty disproportionate cross-section of a lot of our assets.” He added that “we see a lot of money pouring in from Russia”.

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Boulder Valley tech firms hire hundreds of foreign workers, but critics allege visa program misused

The H-1b process: How it works

A company wishing to hire a foreign worker must post its intention to do so within the company. Then, a Labor Condition Application (LCA) must be filed with the U.S. Department of Labor.

The LCA stipulates that “you’re going to treat the foreign worker like everybody else doing the same job,” said Boulder attorney Brad Hendrick, who specializes in the process. “It’s meant to both protect the (foreign) worker from being exploited and to protect the U.S. workers.”

Along with working conditions, the LCA assesses wage information to set the minimum wage for the H-1B employee, which will be the higher of the actual wage paid to employees at the company already in that particular task, or the prevailing wage for that occupation in the geographical area.

Andy Nguyen a Galvanize graduate and current IBM employee speaks to a class at the company in Boulder on Monday.

Andy Nguyen a Galvanize graduate and current IBM employee speaks to a class at the company in Boulder on Monday. (Paul Aiken / Staff Photographer)

Hendrick explained: “If you have four engineers in the same job and they’re all making $60,000 and the prevailing minimum wage comes back at $55,000, you have to pay the H-1B worker $60,000. Similarly, if everyone’s making $60,000 and the prevailing minimum comes in at $65,000, you have to pay the H-1B worker $65,000.”

Once the LCA is certified — typically within days — the process then shifts to the U.S. Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS), which runs the lottery by which H-1B applications are selected for processing. A cap, established by Congress, is set at 85,000 visas, with 20,000 of those reserved for advanced degree-holders.

The 20,000 advance degree visas are awarded via random selection first; those not chosen from the advanced degree pool are then entered into the general lottery, from which 65,000 more applications are selected randomly.

If a case is selected for processing in the lottery, the USCIS works to determine whether the prospective employee is eligible for H-1B immigration status. Visas are issued for three years and some qualify for extensions, which Hendrick said are common.

The use of foreign workers by American companies — hotly debated from the White House to local boardrooms — is controversial, to say the least. Critics claim that companies using the most visas bring in cheaper workers and displace U.S. citizens from high-paying jobs. The local tech community, plagued with a labor shortage, contends that’s not the case.

But a review of H-1B records filed by Boulder, Longmont and Broomfield businesses since 2010 shows more than a dozen so-called outsourcing companies operating locally — and posting pay scales that were, on average, 11 percent less than other top H-1B sponsors, according to data from the U.S. Department of Labor.

CEOs who struggle to fill open positions every day of the week, say they would hire American workers if they had the requisite skills. To focus on the visa program’s viability misses the bigger problem, they say.

The real issue, according to Dave DuPont, CEO and founder of Boulder’s TeamSnap, “is why can’t we get the people we need?”

Overall, the Boulder Valley is a small player in the H-1B market. Just over 4,000 applications have been submitted in the past seven years in Boulder, Longmont and Broomfield. For comparison, the California tech hub of Mountain View (population 78,000 and home to Google, Microsoft and LinkedIn, among others) recorded 28,572.

A look at regional companies seeking to hire the most H1-B visa holders.

A look at regional companies seeking to hire the most H1-B visa holders. (Stephanie Swartz)

“The visa makes America such a special place, that talented, creative people from all over the world can come here to be educated and work,” said Dan Caruso, CEO of Boulder’s Zayo Group. “It’s kind of crazy we wouldn’t want them to be welcomed here.”

Hundreds of area companies are impacted, and not just in tech. Visa applications in the H-1B category have been filed for human resource professionals, accountants, executives — even a dentist and a police officer.

Critics say the program is being misused and has veered off its original mission: to find workers for jobs Americans can’t fill. Instead, they argue that the tech industry has become dependent on the visa to fill positions at all skill-levels, including starter jobs that Americans could easily be trained for.

Adam Smith, left, works with Brennen Bull on their solo projects at Galvanize in Boulder on Monday. The two were using similar Google mapping software so

Adam Smith, left, works with Brennen Bull on their solo projects at Galvanize in Boulder on Monday. The two were using similar Google mapping software so they were collaborating (Paul Aiken / Staff Photographer)

“It’s been distilled down into this program for entry-level positions,” said Heather Terenzio, CEO and co-founder of Boulder’s Techtonic Group. “I do think H-1B is necessary, but it was meant to be for highly-skilled workers, not kids right out of college.”

Proponents, including many in the tech industry, say businesses are simply utilizing a tool to help them deal with a tight labor market created by a dysfunctional national education system. In other words, they say, don’t hate the players: hate the game.

Used sparingly

The H-1B visa category was created by the Immigration Act of 1990 to allow American companies access to skilled foreign workers — at the time, often in health care. Today, use of the program is dominated by so-called STEM fields, science, technology, engineering and mathematics.

Demand is intense: Only 85,000 visas are issued each year, a cap that has been reached every year since at least ’06, according to the Department of Homeland Security. Over 236,000 applications were received in 2016, exceeding supply in five days. This year, it took just four days to hit the ceiling.

Tech leaders say they are starved for talent, particularly in Boulder County’s superheated economy — unemployment was at 2 percent as of March, according to the Department of Labor. Poaching talent from competitors has become common practice.

“Our rehire rate is relatively high,” said Meredith Chavel, managing director at Boulder’s Markit Digital. “We do see (people) bounce back and forth a lot.”

Scarcity has also pushed up wages. Denver and Boulder are in the top 25 cities for highest-paid software engineers, reports Glassdoor, with median base pay of $90,000 and $92,360, respectively. The national median, according to salary.com, is $64,698.

“The job market is extraordinarily hot,” said Zayo’s Caruso. “We have to be very proactive and creative when it comes to attracting talent.”

Boulder Valley tech firms appear to use the H-1B visa system sparingly. Two dozen of the area’s largest companies have filed applications for fewer than 1,000 foreign workers in seven years, and the overwhelming majority of businesses have submitted fewer than 10 applications each since 2010.

Zayo is within that latter group. The company has attempted to hire 10 H-1B workers, according to a review of Labor Condition Applications (LCA) filed with the Department of Labor. Zayo declined to confirm whether it had hired or was currently employing any of the individuals under those applications, and there’s no way to know how many H-1B visa holders are currently employed at Zayo or any other Boulder Valley companies.

The topic is a sensitive one: businesses are loathe to disclose employee information. And because the H-1B applications themselves are not public record, the best indicator of a company’s intent to hire a foreign worker comes from the LCA employers are required to submit.

LCAs are forms containing the employment details of the position a company wishes to fill. They establish that wages, benefits and working conditions will be comparable for domestic and foreign workers, and help determine how much the H-1B holder will be paid.

One LCA can be filed for multiple workers doing the same job, and the more LCAs a company gets approved, the more H-1B applications it can submit. Even then, applications are subject to a random lottery, so prospective employees may or may not be selected to receive a visa.

“It’s a tossup,” said Boulder attorney Brad Hendrick, who specializes in the H-1B process at Boulder firm Caplan & Earnest. “I had one client last year that filed four applications, and three got approved. I had another client submit seven and get zero.”

Large companies dominate process

Critics charge that the lack of transparency around the visa program shields businesses from disclosing how they are using foreign labor. Compounding the problem is that the majority of visas (32,000 of the 85,000 issued in 2014, the New York Times reported) went to just 20 companies.

The local market is similarly dominated. Six percent of companies accounted for 62 percent of filed applications. Among the heavier users were 16 “outsourcing” firms, including Infosys, Wipro, Accenture, Capgemini and others.

Those and other firms operating in the Boulder Valley have been accused by the New York Times and other national media as dominating the visa process and gaming the system for cheaper labor. They recruit workers for other companies that in turn have been criticized for laying off Americans — often older employees with bigger salaries — and replacing them with lower-wage H-1B visa holders.

None of the outsourcing companies with a presence in Boulder County that were contacted for this story agreed to answer questions or provide requested information.

Boulder Chamber President and CEO John Tayer said he doesn’t believe that wage abuses are happening locally, though he admits he could be “oblivious.” Most workers contracted locally by these types of firms are being used for temporary or part-time work, he said.

“Their work is more project-oriented: they’re coming in when a business has need for set period of time,” he said. “They fill an important niche.”

Still, there is some evidence that workers sponsored by these companies locally are earning less than their peers at more traditional companies. The average base salary at the identified outsourcers was $76,209, lower than the $84,844 average base salary disclosed by area tech employers, according to data from the Department of Labor.

It’s unclear where individuals sponsored by outsourcing firms eventually end up or what jobs they do. The salaries could be lower because these firms are generally hiring for entry-level positions that would otherwise be left unfilled.

Techtonic’s Terenzio said many of the jobs most commonly taken by H-1B holders — at outsourcing firms or traditional businesses — are early-stage, and this is her chief complaint of the program.

“We could be training (coal) miners and factory workers for those jobs, easily,” she said. “People that would be happy to make $50,000 a year.”

Proponents of H-1B counter that while Americans could be trained in technical skills, the labor imbalance exists because, by and large, they haven’t been. A mere 4 percent of the world’s engineering bachelor’s degree are earned in the United States, according to a 2012 report from the Brookings Institution. More than half (56 percent) are earned in Asia.

Even within American universities, international students earn more than half of advanced STEM degrees, a 2015 Pew Research report found. For example, at the University of Colorado Boulder, 56 percent of STEM graduates in the fall 2016 semester were international students, up from 38 percent in 2010.

“We’ve left a whole bunch of people behind,” said TeamSnap’s Dupont. “Our education system has not prepared a majority of Americans for new skills.

“The tech community, I don’t think we alone have that responsibility, but we can play a significant role. I think it’s all of our responsibility.”

Best of the best

Foreign workers are working in more industries than tech, across the nation and at home. STEM dominates, of course, with 64.7 percent of visas nationally. Financial and operations careers take 11.6 percent of the visas, while “other professions” — everything from life sciences to education and the arts — claim 24 percent.

The definition of a “speciality occupation,” set by the U.S. Citizenship and Immigration Services, is broad: essentially any job that requires a bachelor’s degree or equivalent experience. And companies — with the exception of those with heavy concentration of foreign talent — are not required to prove they could not fill the position with an American workers.

(That is mandated for other immigration programs, such as when a company sponsors a worker for permanent residency.)

That means the use of H-1B visas is open to nearly every industry. Locally, they have been used to hire human resource professionals, executives, accountants, a therapist and even a dentist.

In some cases, there is a technical element to the job that makes an international candidate a better fit. Louisville’s Rogue Wave hired a vice president of corporate development under the program.

The position requires an “interesting mix of financial knowledge with a degree in computer science,” said Communications Manager Amanda Boughey, a “rare and very specialized” background.

Other non-tech hires are less clearly specialized, but employers say the impetus for hiring comes down to the same thing: Finding the top candidate, regardless of country of origin. All the companies interviewed for this article said they do not actively seek out international applicants. Most commonly, foreign workers are found the same way domestic ones are: by responding to an advertised job posting.

“We’re looking for the best of the best, and that sometimes happens to be a foreigner,” said Leif Steiner, owner of Boulder creative agency Moxie Sozo, which hired a Venezuelan designer in 2014. “When we find that person, we’re willing to do whatever it takes to get (him or her) on board.”

That often includes spending thousands to navigate the bureaucracy. Filing fees range from $1,575 to $4,325, the Brookings report found. Those fees are returned if the application is not selected in the lottery, but many companies utilize lawyers to handle the process.

Those costs are non-refundable. New York-based immigration law firm Taylor & Associates advertises a $995 attorney fee in addition to the government charges. (Boulder’s Hendrick declined to disclose his fee.)

Boulder’s Paladin Press has paid out roughly $35,000 in attorney and regulatory fees over nearly six years to employ Romanian Mark Gongea, who moved from Canada to take a job as a video editor and gradually worked his way up to head of video production.

Said Paladin owner Peder Lund: “We placed an advertisement and I received no responses from the U.S. Not one.”

Will the door stay open?

Gongea recently attained permanent residency for himself and his family, which Paladin also sponsored. As part of that process, the company was required to post the position in an attempt to fill it with an American worker. It was a nerve-wracking time for Gongea, who would be displaced in that event. But in the end, no domestic replacement could be found.

Other times, it is the foreign workers themselves that seek out the businesses to sponsor them. That’s how the Longmont Police Department sponsored its first H-1B worker, at least in recent memory.

A constable from Australia contacted the department looking for work last year. Officer Gregg Ferrill oversaw the process, which did not ultimately result in a hiring: The applicant could not get approval from the Australian government.

Ferrill was not aware the applicant was under an H-1B visa; being from Australia, the individual qualified for a subset of the program known as the E3. But the department has hired non-U.S. citizens before, and would do so again.

“Our motto is hiring the best and the brightest,” Ferrill said. “We’re an equal opportunity employer and we invite everyone to come in and test with us. Whether they’re from U.S. or England, we just want the best.”

Paladin’s Gongea hopes that, in the future, all companies will continue to consider candidates from outside the country whose best opportunity lies here, in the world’s largest economy.

“I had done pretty much everything I could do to move up the chain (in Romania). There were no more opportunities,” he said. “There are lots of people out there who have something to offer and contribute to the growth of this country.

“I think the door should be kept open if we want this country to become greater.”

Shay Castle: 303-473-1626, castles@dailycamera.com or twitter.com/shayshinecastle

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Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Ocwen Financial Corporation of Class Action Lawsuit and Upcoming Deadline – OCN

NEW YORK, NY / ACCESSWIRE / May 12, 2017 / Pomerantz LLP announces that a class action lawsuit has been filed against Ocwen Financial Corporation (“Ocwen” or the “Company”) (NYSE: OCN) and certain of its officers. The class action, filed in United States District Court, Southern District of Florida, and docketed under 17-cv-80500, is on behalf of a class consisting of investors who purchased or otherwise acquired Ocwen securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.

If you are a shareholder who purchased Ocwen securities between May 11, 2015 and April 19, 2017, both dates inclusive, you have until June 20, 2017 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at
[email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.

[Click here to join this class action]

Ocwen Financial Corporation is diversified financial services holding company. The Company’s primary businesses are the acquisition, servicing, and resolution of sub-performing and nonperforming residential and commercial mortgage loans, as well as the related development of loan servicing technology and business-to-business e-commerce solutions for the mortgage and real estate industries.

The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Ocwen engaged in significant and systemic misconduct at nearly every stage of the mortgage servicing process; (ii) the foregoing conduct, when it became known would subject the Company to heightened regulatory scrutiny and potential criminal sanctions; (iii) as a result of the foregoing, Ocwen’s public statements were materially false and misleading at all relevant times.

On April 20, 2017, the U.S. Consumer Financial Protection Bureau issued a press release entitled, “Consumer Financial Protection Bureau sues Ocwen for failing borrowers throughout mortgage servicing process,” reporting that the Company had generated errors in borrowers’ accounts, failed to credit payments, illegally foreclosed on homeowners, and charged borrowers for add-on products without their consent.

On that same day, it was further reported that the North Carolina Office of the Commissioner of Banks and state regulators from more than twenty states issued a cease-and-desist order to Ocwen’s subsidiaries as a result of the Company’s mishandling of consumer escrow accounts and a deficient financial condition. The Order “specifically prohibits the acquisition of new mortgage servicing rights and the origination of mortgage loans by Ocwen Loan Servicing (NMLS number 1852), a subsidiary of Ocwen, until the company is able to prove it can appropriately manage its consumer mortgage escrow accounts.”

On this news, Ocwen’s share price fell $2.91, or 53.89%, to close at $2.49 on April 20, 2017.

The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.

SOURCE: Pomerantz LLP


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Ocwen Financial Corp : Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in Ocwen Financial Corporation of Class Action Lawsuit and Upcoming Deadline – OCN

NEW YORK, NY / ACCESSWIRE / May 12, 2017 / Pomerantz LLP announces that a class action lawsuit has been filed against Ocwen Financial Corporation (“Ocwen” or the “Company”) (NYSE: OCN) and certain of its officers. The class action, filed in United States District Court, Southern District of Florida, and docketed under 17-cv-80500, is on behalf of a class consisting of investors who purchased or otherwise acquired Ocwen securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.

If you are a shareholder who purchased Ocwen securities between May 11, 2015 and April 19, 2017, both dates inclusive, you have until June 20, 2017 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at
[email protected] or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.

[Click here to join this class action]

Ocwen Financial Corporation is diversified financial services holding company. The Company’s primary businesses are the acquisition, servicing, and resolution of sub-performing and nonperforming residential and commercial mortgage loans, as well as the related development of loan servicing technology and business-to-business e-commerce solutions for the mortgage and real estate industries.

The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Ocwen engaged in significant and systemic misconduct at nearly every stage of the mortgage servicing process; (ii) the foregoing conduct, when it became known would subject the Company to heightened regulatory scrutiny and potential criminal sanctions; (iii) as a result of the foregoing, Ocwen’s public statements were materially false and misleading at all relevant times.

On April 20, 2017, the U.S. Consumer Financial Protection Bureau issued a press release entitled, “Consumer Financial Protection Bureau sues Ocwen for failing borrowers throughout mortgage servicing process,” reporting that the Company had generated errors in borrowers’ accounts, failed to credit payments, illegally foreclosed on homeowners, and charged borrowers for add-on products without their consent.

On that same day, it was further reported that the North Carolina Office of the Commissioner of Banks and state regulators from more than twenty states issued a cease-and-desist order to Ocwen’s subsidiaries as a result of the Company’s mishandling of consumer escrow accounts and a deficient financial condition. The Order “specifically prohibits the acquisition of new mortgage servicing rights and the origination of mortgage loans by Ocwen Loan Servicing (NMLS number 1852), a subsidiary of Ocwen, until the company is able to prove it can appropriately manage its consumer mortgage escrow accounts.”

On this news, Ocwen’s share price fell $2.91, or 53.89%, to close at $2.49 on April 20, 2017.

The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.

SOURCE: Pomerantz LLP


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