FEDERAL JUDGE, "LIKE SO MANY OTHERS", FILES CHAPTER 7 BANKRUPTCY

California federal district court judge Otis Wright II, of California's federal central district, has filed for Chapter 7 personal bankruptcy protection.

Bankruptcy is the federal remedy for debtors to cope with overwhelming debt, and it is governed and operated under Title 11 of the U.S. Code.  Chapter 7 bankruptcy is commonly called "straight" bankruptcy.

[see, pp. 52-56, "Bankruptcy Fundamentals", Legal Consumer Tips and Secrets, by Charles Jerome Ware, iUniverse (2011)]

U.S. District Court judges earn about $174,000 a year.

Judge Wright, a George W. Bush appointee who was confirmed in 2007, has filed for personal bankruptcy, a rare thing for a federal judge. A trustee plans to put Judge Wright's house in Rancho Palos Verdes in Los Angeles County on the market, in a bid to generate funds for creditors, according to documents filed recently in Central California bankruptcy court. The asking price: about $1.2 million.

Judge Wright listed assets of $833,426 and liabilities of $895,292 at the time of his Chapter 7 bankruptcy filing late last year. He said in the filing that he owed about $800,000. He and his wife, Evelyn, a self-employed social worker, had accumulated more than $70,000 in credit-card debt, including $12,740 on a Nordstrom card, according to the filing.

A lawyer for the couple said the judge drained his retirement funds to pay off a large lump of debt before filing for bankruptcy. "What he did was everything he could to pay his creditors," the attorney said of the judge. "But like so many others, he's under water."

[WSJ, Monday, April 30, 2012, p. B5]

"10 THINGS MY COLLEGE COMMENCEMENT SPEAKER NEVER TOLD ME, BUT I LEARNED ANYWAY"

1. Extra-curriculum activities in college are very important in your life. These include sororities, fraternities, sports, etc. They are important for your development because they involve your association with people.

2. College graduation is a great day! Enjoy it. But, some of your worst days are still ahead of you.

3. Be determined to not make the world worse than it is. Use your learned talents for good, not bad.

4. If you marry, marry someone smarter than you are.

5. Remember that not everything in life is a competition.

6. Read obituaries. They are actually short biographies of interesting people.

7. Your parents want what is Good for you, not necessarily what is Best for you. They usually mean you well, though.

8. Do not make your life decisions based solely on who is paying you (i.e., your employer). There is more out there.

9. Take nothing for granted. We are all living on borrowed time.

10. Try to be a Good Person, not necessarily a great person. Being great at anything involves a combination of a number of things, including luck. You can be good on your own.

[Excerpted and Amended from: "10 Things Your Commencement Speaker Won't Tell You", WSJ, Sunday, April 28, 2012, p. C3; and "10 1/2 Things No Commencement Speaker Has Ever Said", by Charles Wheelan, W.W. Norton & Co.]

TAX/LEGAL UPDATE: IRS LOSES Tax-Shelter Case

The U.S. Supreme Court has ruled against the Internal Revenue Service in a tax-shelter case.

The case involved a 1999 sale of a Salisbury, N.C., heating oil and concrete business, Home Concrete & Supply LLC. The transaction totaled about $10.6 million, according to court records. But the tax shelter enabled the partnership holding the oil business to report a gain of just $69,000 from the sale.

The business was advised on the tax shelter by Jenkens & Gilchrist LP, a Texas law firm that eventually shut down after an IRS investigation into its tax-shelter practice.

The IRS waited too long— more than three years—to challenge taxpayers' filings that used a "Son of BOSS" tax shelter, the court ruled. The court's ruling didn't address the legality of the tax shelter.

The decision could benefit dozens of taxpayers who used the shelter and cost the government hundreds of millions of dollars in revenue, perhaps as much as $1 billion.

Son of BOSS was a term Treasury officials coined to describe a variety of tax shelters that sought to wipe out taxes on capital gains from the sale of a business or other appreciated asset, for example, by artificially inflating the cost of an asset to make the profit from its sale appear smaller.

All resembled an earlier shelter marketed as "BOSS," short for "bond and option sales strategy." The Son of BOSS transaction was marketed in various forms by advisers at some accounting and law firms beginning in the late 1990s. Several thousand taxpayers likely used the shelter before the Treasury and Congress took steps to block its tax benefits, beginning in 2000.

While the IRS and Treasury were moving against Son of BOSS shelters as early as 2000, individual deals could be difficult to detect, and the IRS obtained much of its information through lengthy investigations of promoters. By the time the IRS got around to auditing individual taxpayers, the three-year statute of limitations for assessing back taxes often was running out, lawyers said.

The IRS argued in a number of cases that a six-year statute of limitations should apply. The six-year statute typically applies in cases in which the taxpayer has omitted income.

Many taxpayers ultimately resolved the cases through settlements that allowed them to pay back taxes and some penalties. But other taxpayers fought back in court. They argued that the six-year statute of limitations shouldn't apply, because Son of BOSS didn't involve omission of income. In Wednesday's 5-4 decision, the Supreme Court agreed, saying the IRS overstepped in using the six-year statute of limitations.

[WSJ, Thurs., 4-26-2012, p. CB]

FBI Warning: NEW BANKING SCAM

Crafty criminals are aiming to steal one of the most valuable pieces of your personal property: your banking information.

In a new warning, the Federal Bureau of Investigation warns account holders of a new spam email scheme that involves a type of malware called "Gameover." The scheme involves fake emails from the National Automated Clearing House Association, the Federal Reserve or the FDIC. These messages attempt to trick recipients into clicking on a link to resolve some type of issue with their accounts or a recent ACH transaction. Once you click on the link, Gameover takes over your computer, and thieves can steal usernames, passwords and your money.

The FBI also warns the thieves' hacking capabilities can navigate around common user authentication methods banks use to verify your identity, which is certainly a cause for concern. Those additional authentication steps -- often personal questions, birth dates or other pieces of private information -- are meant to provide some extra security padding.

While phishing scams are nothing new to the world of online banking, this type of warning serves as a reminder of just how susceptible account holders can be to malicious attacks. As more account holders begin to jump on the mobile banking bandwagon, it's important to remember that a smartphone essentially acts as another computer. While this additional connection to the Internet is convenient, it also serves as another outlet where your information can be compromised.

Here are a few crucial steps to take to avoid falling victim to this type of Internet crime:

• Keep your computer and mobile device updated with the newest versions of anti-virus software.
• If you have any doubts about an email sender's authenticity, do not click on any embedded links.
• Remember, banks never request any personal information via email.
• Be vigilant about checking your account balances. The sooner you notice and report any type of fraudulent activity, the more likely you'll be able to be reimbursed for any missing funds.

[www.bankrate.com/financing/banking/fbi-warns-of-new-banking-scam]

Cartagena, Colombia "Person of the Week": Dania Londono Saurez

110446
Dania Londono Saurez.
Colombia, South America.
City: Cartegena (The city of angels).
Age: 26 (I am just the right age).
Birth Date: 12/21/1985
Weight: 128lb, 58kg. Just the right weight.
Height: 5'2", 157 cm (in stiletto heels, 5'6").
Measurements: 34-28-39. How do you like me now?
Measurements (cm): 87-71-100
Eye Color: Black (as night).
Hair Color: Black (this week).
Marital Status: Single (for now).
Children: 1 - boy, 7. Mi Vida.
Religion: Christian (Catholic). Devout, no doubt!
Smoker: No. Nada.
Drinker: Si. Thank you!
Education: College (of life). Been there, done that.
Company: Private (property). If you have the money, I have the time.
Job Title: Cosmetologist ("I am an escort --- not a prostitute").
Sports: Swimming (in all sorts of things). Night life in Cartagena.
Hobbies: Cooking, films, Secret Service Agents.
Self Description: "I am a simple woman, with many values and I love the respect, honesty and sincerity." Seriously!
Comments: "I want a romantic man with good intentions, loving and very respectful." And $800.00 in cash!

[See, www.anorak.co.uk/319718; 4/25/2012] Amended.

DEBT COLLECTORS STALK HOSPITALS

Accretive Health, one of the U.S.'s largest medical debt collection companies, is being faulted by the Minnesota Attorney General for excessive tactics against patients in hospitals.

The debt collector is accused of hiding in wait in emergency rooms, surgery convalescing rooms after surgery, and stalking patients elsewhere in hospitals to collect on debts and payments before treatment.

This revelation of Accretive's tactics by the Minnesota Attorney General on Tuesday, April 24th, 2012 raises concerns and alarms that such questionable actions and practices have become common at hospitals throughout the nation.

The tactics, like embedding debt collectors as employees in emergency rooms and demanding that patients pay before receiving treatment, were outlined in hundreds of company documents released by the attorney general. And they cast a spotlight on the increasingly desperate strategies among hospitals to recoup payments as their unpaid debts mount.

To patients, the debt collectors may look indistinguishable from hospital employees, may demand they pay outstanding bills and may discourage them from seeking emergency care at all, even using scripts like those in collection boiler rooms, according to the documents and employees interviewed by The New York Times.

In some cases, the company’s workers had access to health information while persuading patients to pay overdue bills, possibly in violation of federal privacy laws, the documents indicate.

The attorney general, Lori Swanson, also said that Accretive employees may have broken the law by not clearly identifying themselves as debt collectors.

Accretive Health has contracts not only with two hospitals cited in Minnesota but also with some of the largest hospital systems in the country, including Henry Ford Health System in Michigan and Intermountain Healthcare in Utah.

As hospitals struggle under a glut of unpaid bills, they are reaching out to companies like Accretive that specialize in collecting medical bills.

Hospitals have long hired outside collection agencies to pursue patients after they have left hospital facilities. But financial pressures are altering the collection landscape so that they are now letting collection firms in the front door, according to Don May, the policy adviser for the American Hospital Association, a trade group.

To achieve promised savings, hospitals turn over the management of their front-line staffing — like patient registration and scheduling — and their back-office collection activities.

Concerns are mounting that the cozy working relationships will undercut patient care and threaten privacy, said Anthony Wright, executive director of Health Access California, a consumer advocacy coalition. “The mission of these companies is in direct opposition to the supposed mission of these hospitals.”

Still, hospitals are in a bind. The more than 5,000 community hospitals in the United States provided $39.3 billion in uncompensated care — predominately unpaid patient debts or charity care — in 2010, up 16 percent from 2007, the hospital association estimated.

Accretive is one of the few companies specializing in hospital debt collection that is publicly traded. Last year, it reported $29.2 million in profit, up 130 percent from a year earlier.         

[http://www.nytimes.com/2012/04/25/business/debt-collector-is-faulted-for-tough-tactics-in-hospitals.html]

SECRET SERVICE SCANDAL: Dania Suarez "Honey Trap" Update

Dania Duarez, the 24-year old Colombian female prostitute who was a major figure in the April 20th, 2012 Secret Service scandal at the Caribe Hotel in Cartagena, Colombia has fled the city.

The Cartagena "Honey Trap" is now back at her home on an island just off the coast of mainland Colombia.

It may be of interest to note that another alleged thriving business in Colombia is the mail-order bride industry.

[WSJ, 4/24/2012, "The Morning with Gordon Deal"]