by AZ Free News | Sep 14, 2021 | News
The Securities and Exchange Commission today charged Phoenix, Arizona-based Voice of Guo Media Inc., New York City-based GTV Media Group Inc. and Saraca Media Group Inc., with conducting an illegal unregistered offering of GTV common stock. The SEC also announced charges against GTV and Saraca for conducting an illegal unregistered offering of a digital asset security referred to as either G-Coins or G-Dollars.
The respondents have agreed to pay more than $539 million to settle the SEC’s action.
According to the SEC’s order, from April through June 2020, the respondents generally solicited thousands of individuals to invest in the GTV stock offering. During the same period, GTV and Saraca solicited individuals to invest in the digital asset offering. The order finds that the respondents disseminated information about the two offerings to the general public through publicly available videos on GTV’s and Saraca’s websites, as well as on social media platforms such as YouTube and Twitter. Through these two securities offerings, whose proceeds were commingled, the respondents collectively raised approximately $487 million from more than 5,000 investors, including U.S. investors. As stated in the order, no registration statements were filed or in effect for either offering, and the respondents’ offers and sales did not qualify for an exemption from registration.
“Issuers seeking to access the markets through a public securities offering must provide investors with the disclosures required under the federal securities laws,” said Sanjay Wadhwa, Deputy Director of the SEC’s Enforcement Division. “When they fail to do so, the Commission will seek remedies that make harmed investors whole, such as an unwinding of the offering and a return of the funds to the investors.”
“Thousands of investors purchased GTV stock, G-Coins, and G-Dollars based on the respondents’ solicitation of the general public with limited disclosures,” said Richard R. Best, Director of the SEC’s New York Regional Office. “The remedies ordered by the Commission today, which include a fair fund distribution, will provide meaningful relief to investors in these illegal offerings.”
Without admitting or denying the SEC’s findings that they violated Section 5 of the Securities Act of 1933, GTV and Saraca agreed to a cease-and-desist order, to pay disgorgement of over $434 million plus prejudgment interest of approximately $16 million on a joint and several basis, and to each pay a civil penalty of $15 million. Voice of Guo agreed to a cease-and-desist order, to pay disgorgement of more than $52 million plus prejudgment interest of nearly $2 million, and to pay a civil penalty of $5 million. The order establishes a Fair Fund to return monies to injured investors. The respondents also agreed to not participate, directly or indirectly, in any offering of a digital asset security, to assist the SEC staff in the administration of a distribution plan, and to publish notice of the SEC’s order on their public websites and social media channels, including but not limited to, www.gtv.org and www.gnews.org.
by Corinne Murdock | Sep 12, 2021 | News
By Corinne Murdock |
An audit revealed that the Arizona Department of Veterans Services (ADVS) failed to fulfill a number of key responsibilities. Major issues included a mismanagement of around $88,000 in funds, as well as violations of conflict-of-interest and open meeting laws. The Arizona Auditor General Lindsey Perry published the report at the end of last month.
Department and Commission met some statutory objectives and purposes, such as providing benefits counseling assistance to veterans and policy advice to the Governor, but Department did not comply with several Veterans’ Donations Fund grant award and monitoring requirements or use Gold Star Family revenues to maintain the Enduring Freedom Memorial and the Commission did not comply with some conflict-of-interest and open meeting law requirements.
The audit found that ADVS had accrued around $43,000 in funds meant to update the Enduring Freedom Memorial, which recognizes Arizona’s service members killed or injured in Operation Iraqi Freedom. According to the report, none of the funds were used. The memorial hadn’t even been updated to reflect all service members’ names since 2013: 3 years after the memorial was established.
Just before the COVID-19 outbreak, State Senator Kelly Townsend (R-Mesa) issued a press release indicating that ADVS wasn’t updating the Enduring Freedom Memorial. Townsend said that the families contacted her in the fall of 2019 about the issue. In response, she pushed for language in the budget that would offer more fund sources for ADVS to update the memorial.
Townsend remarked to AZ Free News that this audit confirmed the Gold Star Families’ suspicions. She added that she was grateful that the budget included her language to provide more funds for the memorial.
“One of the key findings of a just-completed audit of the Arizona Department of Veterans’ Services by the Auditor General confirms that the Department had not used more than $43,000 in Gold Star Family specialty license plate revenues to maintain the Enduring Freedom Memorial,” said Townsend. “Fortunately, I worked hard to make sure language was included in the budget to allow the Department of Administration to use money in the State Monument and Memorial Repair Fund to update the memorial.”
The remaining $45,000 that ADVS mismanaged came from uncollected payments from the Arizona American Legion. ADVS rendered has given veterans’ benefits counseling services to the legion since 2014. According to the audit, ADVS failed to collect $45,000 in payments from 2019.
The audit also found that ADVS made a faulty contract with the Arizona American Legion. ADVS agreed to an indefinite contract, State Procurement Code limits state agency contracts to 5 years unless the department head includes a written justification for an extension. Furthermore, the contract required legion payments to be remitted to the Veterans’ Donation Fund rather than the State General Fund, though the legion payments didn’t qualify by statute as gifts, contributions, or other public donations.
The audit also found that ADVS violated conflict-of-interest law by failing to have all committee members complete a conflict-of-interest disclosure form, and failed to have employees and public offices annually update their conflict-of-interest disclosure forms. ADVS also reportedly failed to offer a process to avoid and remediate any potential conflicts of interest.
As for open meeting law violations, the audit revealed that 4 of the 8 meetings they sampled failed to have minutes posted within 3 working days, and 1 meeting which wasn’t posted about 24 hours in advance.
In summary, the auditor general recommended that ADVS comply with the laws on grant management, conflicts of interest, and open meetings; spend the $43,000 in Gold Star Family specialty license plate revenues to maintain the Enduring Freedom Memorial; and collect the $45,000 owed by the Arizona American Legion while reviewing the need for that contract.
At length, the audit did note a number of other issues. These included inadequate safeguarding and exceeding award limits of relief fund monies; noncompliance with legal requirements for awarding and monitoring large and small Veterans’ Donations Fund grants; failure to retain required, proper supporting documentation for some transactions; and noncompliance with Arizona Strategic Enterprise Technology Office (ASET)-required information technology (IT) policies and procedures.
The audit did commend ADVS for assisting nearly 40,000 beneficiaries in receiving around $56.6 million average in monthly compensation and benefits.
According to the state, Arizona has around 504,000 veterans.
ADVS agreed with the audit findings, and indicated they would comply with the auditor general’s recommendations.
Read the entire report here.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
by Terri Jo Neff | Sep 12, 2021 | News
By Terri Jo Neff |
Proposed changes to how federal capital gains and inheritances are taxed would cost Arizona families billions of dollars in lost economic output and investment income over the next decade, not to mention kill thousands of jobs, according to an economic impact analysis released last week.
The report issued Sept. 9 by Committee to Unleash Prosperity examined the direct effects federal legislative proposals like the Sensible Taxation and Equity Promotion (STEP) Act put forth by the Biden Administration would have on financing costs, labor productivity, costs to small and family-owned businesses and farms, and federal non-military spending of new revenue.
U.S. Senator Chris Van Hollen (D-Maryland) is joined by Sens. Cory Booker, Bernie Sanders, Sheldon Whitehouse, and Elizabeth Warren in supporting the STEP Act and other proposed federal legislation also seek to make death a tax realization event and to increase the tax liability of trusts commonly utilized by small businesses, family- and privately-owned enterprises, farm and ranch operations, and others.
And the result over the next decade would hit thousands of Arizonans hard, according to the analysis conducted by Regional Economic Models, Inc. (REMI). The results would include sustained annual job losses in the state from 8,000 to nearly 20,000. That translates to 80,000 to almost 200,000 fewer job-year equivalents over 10 years, the report states.
In addition, the Biden-supported STEP Act and similar legislation would increase the top capital gains tax rate to 39.6 percent, which becomes 43.4 percent if the taxpayer is also subjected to a 3.8 percent net investment income tax (NIIT).
The changes would create $12 billion in private investment losses for Arizonans, a $120 million decline in research & development spending, and a 10-year loss in personal income of about $20 billion in Arizona, the analysis showed. The analysis does not address any further effect attributed to state capital gains, estate, or inheritance taxes.
The negative impact of changing federal tax law is driven by several factors, including increased capital and tax liability costs faced by businesses and farms. In turn, that translates into higher prices for consumer goods and services and makes the domestic private sector less hospitable for new and existing businesses, especially small and family-owned businesses and farms that are often less resilient to economic shocks.
“Higher prices mean that consumers are able to make fewer purchases, slowing demand throughout the economy from retailers to manufacturers to service providers,” the report states. “A less hospitable private sector means that prospective businesses may choose not to open, existing businesses may be forced to downsize or close altogether, and export-focused businesses lose market share to international competitors.”
And despite likely increased federal non-military spending to provide a direct boost to the economy, REMI found the negative impacts “dominate” in the end in Arizona.
Stephen Moore, the Committee to Unleash Prosperity’s co-founder, calls the proposed federal legislation a tax scheme that is “an assault on the American tradition of family-owned and operated businesses being passed on” from one generation to the next.
“Many families will literally have to sell the farm to pay the Biden taxes,” Moore said. “The damage to jobs and the economy would be multiple times larger than any revenue gained for the government from this unfair tax proposal.”
by Corinne Murdock | Sep 12, 2021 | News
By Corinne Murdock |
The Pima County Board of Supervisors decided Tuesday that unvaccinated employees will pay up to $1,500 more in insurance fees – but unvaccinated illegal immigrants with COVID-19 will be given a $2 million quarantine shelter, without facing any penalties for their vaccination status. The supervisors voted for the vaccination disincentive 4-1; only Supervisor Steve Christy voted against it.
Christy argued that this disincentive was punishing people arbitrarily, pointing out that his fellow supervisors are choosing to punish the unvaccinated while ignoring others with significant comorbidities. He pointed out that there are other employees beyond the unvaccinated that present as much or more of a financial burden to the county health care system due to their health conditions.
“[I]f we’re going to penalize employees who don’t take the vaccine because if they fall sick it will cost more on the county’s health care system, is there going to be an examination of all employees with other ailments or sicknesses that cause expenses to our health care system, such as obesity or high blood pressure or diabetes?” asked Christy. “This is a discriminatory segregation of those who have the right to choose what type of procedures they want with their own conscience and their own decision with their medical practitioner – to coerce them with monetary penalties is wrong, and it is definitely […] unconstitutional.”
Following Christy’s remarks, Supervisor Adelita Grijalva quickly motioned to vote on the item. Some of the arguments in favor of the vaccination disincentive focused on the perceived duty that employees owed one another in limiting COVID-19 spread.
Many of the citizens who issued public comment during the meeting expressed their opposition to the vaccine disincentive. They cited the lack of long-term studies on the vaccine, as well as the need to honor religious exemptions and personal medical needs.
Pima County salaries range from as low as $15 an hour ($2,400 a month), to nearly $140 an hour ($22,400 a month).
As for the $2 million to shelter illegal immigrants, the board approved the use of those Federal Emergency Management Agency (FEMA) funds to acquire a local Red Roof Motel with nearly 180 rooms.
Pima County Administrator Chuck Huckelberry explained in a letter that this expenditure was necessary due to other shelters reaching COVID-19 capacity. According to Huckelberry, over 8,400 asylum seekers have been processed since March. Of those, just under 300 individuals were COVID-positive (three percent of the total), while nearly 1,800 received the COVID-19 vaccine.
Yet, Huckelberry emphasized that it would be necessary to obtain additional housing to stop any spread.
“The key to ensuring COVID-19 does not spread significantly in congregate housing is to provide individual housing during the quarantine period,” stated Huckelberry. “A three percent infection rate among the population at risk is not significant.”
Last month, the supervisors voted to give employees a $300 bonus and three extra vacation days as an incentive to get vaccinated. As a result, over 2,140 additional employees got vaccinated. Around 4,430 employees are vaccinated – 66 percent of their workforce.
The earliest that these vaccine disincentives could go into place would be October 1.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
by Corinne Murdock | Sep 11, 2021 | News
By Corinne Murdock |
On Friday, Maricopa County issued an explanatory statement of two claimed fraudulent votes outlined in a new “ghost votes” theory challenging the integrity of the 2020 election. Failed state representative candidate and “Stop the Steal” leader Liz Harris led the investigation, reportedly executed by thousands of volunteers.
These were just two claims of hundreds of thousands made in Harris’s report. The grassroots effort claimed that just over 173,100 votes were “lost or missing,” meaning that the voters never saw records from the county that their mail-in vote was counted, and that nearly 96,400 mail-in votes were cast by voters who didn’t match the associated residential address or who had moved from the address prior to October 2020 – these Harris called “ghost votes.”
Maricopa County officials explained that they investigated two of the purported “ghost vote” addresses personally. They were able to identify the first address as an existing single-family home built in 2005 and located in Goodyear. According to their investigation, four registered voters resided in the home, three of whom voted by mail in the November election.
As for the second address listed by Harris, Maricopa officials explained that the voter in question had reportedly requested their ballot at a temporary address: the site of a formerly functional mobile home that they’d voted from in the 2016 election. The site in question held mobile homes through part of 2020 before the lot was cleared.
As for the remainder of the information, Maricopa County said that they were unable to conduct a more expansive investigation because Harris wouldn’t provide them with the information she’d gathered. The officials noted that they attempted to contact Harris multiple times about her report, but were unable to connect with her.
“The integrity of election and voter registration data is central to the mission of our Office to serve everyone who calls Maricopa County home. The Maricopa County Recorder’s Office and the Maricopa County Assessor’s Office have repeatedly asked Ms. Harris to provide details that support the findings of her report,” explained the office. “While we investigate any and all allegations of wrongdoing made, we cannot do so without credible evidence being provided. To date, Ms. Harris has refused to provide the Recorder’s Office or the Assessor’s Office with the kind of information we can use to conduct a full and thorough investigation into the claims made in her report.”
Read Harris’s full report here.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
by Terri Jo Neff | Sep 11, 2021 | News
By Terri Jo Neff |
The boundaries of Arizona’s 30 legislative districts and 9 congressional districts are redrawn from scratch every 10 years based on U.S. Census population data. The task belongs to the Arizona Independent Redistricting Commission (IRC).
With the census data finally released last month, the IRC’s first mapping activity is to create Grid Maps showing the districts with equal population without regard to any other issues. Those Grid Maps are expected to be presented Tuesday when the IRC’s two Democrats, two Republicans, and Independent chairperson meets at 8 a.m. The public is invited to watch live at www.irc.az.gov
The commissioners have the option of adopting the Grid Maps during the meeting. Those maps will be followed in a few weeks by Draft Maps and then Final Maps by year-end.
Another IRC activity is to seek citizen feedback, which is one reason the same mapping software tool and database will be available to the public. A training session on the mapping tool will livestreamed Monday at 10 a.m., with a recording of the training posted on the IRC website on Tuesday.
Arizona voters passed Prop 106 in November 2000 to amend the Arizona Constitution by removing state lawmakers the power to draw state legislative and congressional legislative districts. The districts are to have equivalent population “to the extent practicable” in order to follow the one-person, one-vote premise of Arizona election law.
For the soon to be created legislative districts, that comes out to about 238,00 residents per district. Each congressional district would have about 794,000 residents.
However, each final district map may have populations which vary by several thousands due to the other five areas the IRC must consider: district shape, the federal Voting Rights Act, geographical features, potential competitiveness, and respect for communities of interest.
Steve Gaynor of Fair Maps Arizona is excited for the release of the Grid Maps, as they will show where Arizona’s nearly 12 percent population growth over the last decade has occurred.
“The Grid Maps are the first time we will see exactly how our population has changed,” he told AZ Free News. “We will see significant population growth, especially in metropolitan areas, and a few areas that have declined.”
Gaynor, a 2022 Republican gubernatorial candidate, founded Fair Maps Arizona in advance of this year’s redistricting effort due to concerns the previous IRC drew maps which did not follow the Arizona Constitution. He believes it is important for citizens to understand and participate in the IRC process, which Gaynor calls a “vital process in maintaining our democracy.”
That participation can involve expressing comments or concerns to the IRC in writing or at public hearings.
“I think individual comments to the IRC are important and do make a difference,” Gaynor said. “Of the six constitutional requirements for redistricting, the requirement to respect communities of interest is the most subjective, which is why hearing from people about it is so important. I think the commissioners will produce better maps as a result of having heard directly from the people.”
The IRC will conduct public hearings later this month about the Grid Maps. Those hearings will be the second time commissioners involved in the 2021 redistricting will hear from the public.
Earlier this summer, IRC commissioners took part in 15 public hearings about how the requirement of communities of interest should be considered. Gaynor said he was impressed that the commissioners took the time to travel across the state to hear from people on the subject.
“The commissioners listened carefully to the testimony and asked good questions,” he said. “They were clearly engaged with the people testifying.”
More information about the IRC process can be found at https://fairmapsarizona.org/
