NewzIntel.com

Category: Taxation

  • MIL-OSI USA: Senator Marshall Joins RFDTV to Discuss Improving 45Z Biofuel Tax Credit

    US Senate News:

    Source: United States Senator for Kansas Roger Marshall

    Kansas City, KS – U.S. Senator Roger Marshall, M.D. joined Market Day Report on RFDTV to discuss the 45Z Biofuel Tax Credit and how we can ensure American Agriculture is being put first.

    [embedded content]

    You may click HERE or on the link above to watch Senator Marshall’s full interview.
    Highlights from Senator Marshall’s interview include:
    On The Current 45Z Tax Credit: 
    “I think that when they write the rules for this, there’s some big glitches. What I know is I don’t like China benefiting from it, which is what they’re doing right now. They’re manipulating the system. Look, I think that tax credits should be only for American farmers, and other countries shouldn’t enjoy any type of tax credit.”
    “What China is doing right now is they’re bringing in cooking oil. Used cooking oil, but blending it with palm oil, which is not the right way to do this. So, they’re cheating and getting the tax credit. That’s why we need a president that understands agriculture. I just sat down with President Trump, spent half a morning with him, took two Kansas farmers with me, and discussed this very issue. That if 45Z is going to help other countries, we don’t even want it.”
    “The way the Biden-Harris administration is doing this is wrong, as usual. Just remind your listeners, President Trump was the first person back in 2016 who embraced E15 and then gave us year-round E15 when he was president.”
    On the Farmer First Fuel Incentives Act: 
    “The farmers and ranchers need certainty, and that’s exactly what we’re speaking with President Trump about, is we need long term certainty and to be much better at these big, big investments.”
    “Right now, we have a project in Kansas where we’re going to take corn stock and turn it into jet fuel, working with Southwest Airlines. So, I think that’s the future, but without this 45Z I think that project goes away… we need consistent rules, that working with the Treasury Department and getting USDA to give some voice there at the Treasury Department, exactly how this works out, but we need to put American farmers and ranchers first, not second. This tax credit is not meant to help other foreign entities and, frankly, farmers from other countries.”

    MIL OSI USA News –

  • MIL-OSI Security: Owner of Florida Labor-Staffing Companies Pleads Guilty to Tax Fraud and Money Laundering

    Source: Office of United States Attorneys

    Defendant Caused a Tax Loss to the United States of more than $9.5M

    MIAMI – A Ukrainian national pleaded guilty today to conspiracy to defraud the United States and conspiracy to commit money laundering.

    According to the court documents and statements made in court, between April 2008 and July 2021, Oleksandr Yurchyk and others owned and operated a series of labor-staffing companies in southern Florida, including Paradise Choice LLC, Paradise Choice Cleaning LLC, Tropical City Services LLC and Tropical City Group LLC. Through these staffing companies, Yurchyk and others facilitated the employment of non-resident aliens in the hospitality industry who were not authorized to work in the United States and helped evade the assessment and collection of federal income and employment taxes. Yurchyk and his co-defendants also laundered more than $11 million of proceeds from their scheme.

    Yurchyk is scheduled to be sentenced on Jan. 27, 2025. He faces a maximum penalty of 20 years in prison for the conspiracy to commit money laundering and five years in prison for the conspiracy to defraud the United States. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    U.S. Attorney Markenzy Lapointe for the Southern District of Florida and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

    Homeland Security Investigations and IRS Criminal Investigation are investigating the case.

    Senior Litigation Counsel Christopher J. Clark for the Southern District of Florida and Sean Beaty and Trial Attorneys Matthew B. Hicks and Wilson R. Stamm of the Justice Department’s Tax Division are prosecuting the case.

    ###

    MIL Security OSI –

  • MIL-OSI: CORRECTION – Bogota Financial Corp. Reports Results for the Three and Nine Months Ended September 30, 2024 Corrected

    Source: GlobeNewswire (MIL-OSI)

    TEANECK, N.J., Nov. 01, 2024 (GLOBE NEWSWIRE) — Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company of Bogota Savings Bank (the “Bank”), after market close today issued a correction to its financial results for the three and nine months ended September 30, 2024 (the “Revised Earnings Release”), which was issued prior to market open on November 1, 2024 (the “Original Earnings Release”). Interest expense on deposits (and similarly total interest expense) for the three and nine months ended September 30, 2024 reported in the Original Earnings Release was understated by $300,000 due to a misstatement of the rates paid on certain certificates of deposit during the three months ended September 30, 2024. As a result, the Revised Earnings Release reflects the following changes:

    At September 30, 2024

        Average rate for certificates of deposit Average rate
    for deposits    		  
      As Initially Reported 4.15% 3.55%  
      As Corrected 4.39% 3.95%  
             

    For Three Months Ended September 30, 2024

    (Dollars in thousands, except per share data) Interest paid on average certificates of deposit Interest paid on average interest-bearing deposits Net interest income Net interest income after provision (recovery) for credit losses (Loss) income before income taxes Income tax (benefit) expense Net (loss) income (Loss) earnings per common share – basic (Loss) earnings per common share – diluted
    As Initially Reported $ 5,327 $ 5,861 $ 2,957 $ 2,957 $ (320 ) $ (173 ) $ (147 ) $ (0.01 ) $ (0.01 )
    As Corrected $ 5,627 $ 6,161 $ 2,657 $ 2,657 $ (620 ) $ (253 ) $ (367 ) $ (0.03 ) $ (0.03 )
                                                   
      Cost of average certificates of deposit Cost of average interest-bearing deposits (Loss) Return on Average Assets (Loss) Return on Average Equity Interest rate spread Net interest margin Efficiency Ratio
    As Initially Reported 4.26 % 3.84 % (0.09 )% (0.72 )% 0.81 % 1.24 % 109.75 %
    As Corrected 4.50 % 4.04 % (0.07 )% (0.52 )% 0.66 % 1.15 % 120.78 %
                                 

    For Nine Months Ended September 30, 2024

    (Dollars in thousands, except per share data) Interest paid on average certificates of deposit Interest paid on average interest-bearing deposits Net interest income Net interest income after provision (recovery) for credit losses (Loss) income before income taxes Income tax (benefit) expense Net (loss) income (Loss) earnings per common share – basic (Loss) earnings per common share – diluted
    As Initially Reported $ 16,484 $ 18,085 $ 8,352 $ 8,282 $ (1,762 ) $ (741 ) $ (1,020 ) $ (0.08 ) $ (0.08 )
    As Corrected $ 16,784 $ 18,385 $ 8,052 $ 7,982 $ (2,062 ) $ (821 ) $ (1,240 ) $ (0.10 ) $ (0.10 )
                                                   
                                                   
      Cost of average certificates of deposit Cost of average interest-bearing deposits (Loss) Return on Average Assets (Loss) Return on Average Equity Interest rate spread Net interest margin Efficiency Ratio
    As Initially Reported 4.31 % 3.88 % (0.17 )% (1.23 )% 0.73 % 1.23 % 118.23 %
    As Corrected 4.39 % 3.95 % (0.20 )% (1.44 )% 0.68 % 1.18 % 122.18 %
                                 

    The full text of the corrected release is a follows:

    Teaneck, New Jersey, November 1, 2024 – Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company for Bogota Savings Bank (the “Bank”), reported a net loss for the three months ended September 30, 2024 of $367,000, or $0.03 per basic and diluted share, compared to a net loss of $29,000, or $0.00 per basic and diluted share, for the comparable prior year period. The Company reported a net loss for the nine months ended September 30, 2024 of $1.2 million, or $0.10 per basic and diluted share, compared to net income of $1.8 million, or $0.14 per basic and diluted share, for the nine months ended September 30, 2023.

    On April 24, 2024, the Company announced it had received regulatory approval for the repurchase of up to 237,090 shares of its common stock, or approximately 5% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC). The repurchase program does not have a scheduled expiration date and the Board of Directors has the right to suspend or discontinue the program at any time. As of September 30, 2024, 163,790 shares have been repurchased pursuant to the program at a cost of $1.2 million.

    Other Financial Highlights:

    • Total assets increased $39.6 million, or 4.2%, to $978.9 million at September 30, 2024 from $939.3 million at December 31, 2023, due to an increase in securities, offset by a decrease in cash and cash equivalents and loans.
    • Cash and cash equivalents decreased $3.9 million, or 15.8%, to $21.0 million at September 30, 2024 from $24.9 million at December 31, 2023 as excess funds were used to purchase securities.
    • Securities increased $47.1 million, or 33.3%, to $188.7 million at September 30, 2024 from $141.5 million at December 31, 2023.
    • Net loans decreased $5.8 million, or 0.8%, to $708.9 million at September 30, 2024 from $714.7 million at December 31, 2023.
    • Total deposits at September 30, 2024 were $629.3 million, increasing $3.9 million, or 0.6%, as compared to $625.3 million at December 31, 2023, due to a $2.3 million increase in interest-bearing deposits, primarily in certificates of deposit, and a $1.6 million increase in non-interest bearing demand accounts. The average cost of deposits increased 128 basis points to 3.95% for the first three quarters of 2024 from 2.67% for the first nine months of 2023 due to higher interest rates and a larger percentage of deposits consisting of higher-costing certificates of deposit.
    • Federal Home Loan Bank advances increased $34.9 million, or 20.8% to $202.6 million at September 30, 2024 from $167.7 million as of December 31, 2023.

    Kevin Pace, President and Chief Executive Officer, said “The Bank continues its growth strategy focusing on core deposits and commercial lending. We have seen an uptick in our commercial pipeline this quarter that shows interest remains strong in our market. Offering new desirable technology through partnerships with our providers is a key initiative we are focusing on going into 2025.  This will allow us to attract new customers in our competitive environment.”

    “The Bank completed its third stock repurchase program earlier this year and promptly began its fourth buyback. We remain diligent in our efforts to show confidence and deliver value to our shareholders.”

    Income Statement Analysis

    Comparison of Operating Results for the Three Months Ended September 30, 2024 and September 30, 2023

    Net income decreased by $338,000 to a net loss of $367,000 for the three months ended September 30, 2024 from a net loss of $29,000 for the three months ended September 30, 2023. This decrease was primarily due to a decrease of $560,000 in net interest income, partially offset by a decrease of $171,000 in salaries and employee benefit costs, an increase of $128,000 in income tax benefit and a $38,000 increase in non-interest income.

    Interest income increased $1.3 million, or 14.3%, from $9.3 million for the three months ended September 30, 2023 to $10.6 million for the three months ended September 30, 2024 primarily due to higher yields on interest-earning assets and an increase in the average balance of securities. 

    Interest income on cash and cash equivalents decreased $30,000, or 17.9%, to $138,000 for the three months ended September 30, 2024 from $168,000 for the three months ended September 30, 2023 due to a $2.6 million decrease in the average balance to $10.2 million for the three months ended September 30, 2024 from $12.8 million for the three months ended September 30, 2023, reflecting the use of excess cash to purchase securities. The decrease was offset by an 18 basis point increase in the average yield from 5.21% for the three months ended September 30, 2023 to 5.39% for the three months ended September 30, 2024 due to the higher interest rate environment.

    Interest income on loans increased $401,000, or 5.0%, to $8.4 million for the three months ended September 30, 2024 compared to $8.0 million for the three months ended September 30, 2023 due primarily to a 24 basis point increase in the average yield from 4.45% for the three months ended September 30, 2023 to 4.69% for the three months ended September 30, 2024, and to a lesser extent, a $876,000 increase in the average balance to $711.6 million for the three months ended September 30, 2024 from $710.7 million for the three months ended September 30, 2023.

    Interest income on securities increased $889,000, or 88.2%, to $1.9 million for the three months ended September 30, 2024 from $1.0 million for the three months ended September 30, 2023 primarily due to a $48.7 million increase in the average balance to $187.2 million for the three months ended September 30, 2024 from $138.5 million for the three months ended September 30, 2023, and a 114 basis point increase in the average yield from 2.91% for the three months ended September 30, 2023 to 4.05% for the three months ended September 30, 2024 due to the higher interest rate environment. 

    Interest expense increased $1.9 million, or 31.1%, from $6.1 million for the three months ended September 30, 2023 to $8.0 million for the three months ended September 30, 2024 due to higher costs and average balances on certificates of deposit and borrowings.

    Interest expense on interest-bearing deposits increased $1.3 million, or 27.0%, to $6.2 million for the three months ended September 30, 2024 from $4.9 million for the three months ended September 30, 2023. The increase was due to a 93 basis point increase in the average cost of deposits to 4.04% for the three months ended September 30, 2024 from 3.11% for the three months ended September 30, 2023. The increase in the average cost of deposits was due to the higher interest rate environment and a change in the composition of the deposit portfolio.  The average balances of certificates of deposit decreased $831,000 to $497.3 million for the three months ended September 30, 2024 from $498.1 million for the three months ended September 30, 2023 while the average balance of NOW/money market accounts and savings accounts decreased $9.0 million and $2.1 million for the three months ended September 30, 2024, respectively, compared to the three months ended September 30, 2023.

    Interest expense on Federal Home Loan Bank advances increased $582,000, or 47.7%, from $1.2 million for the three months ended September 30, 2023 to $1.8 million for the three months ended September 30, 2024. The increase was primarily due to an increase in the average balance of $71.6 million to $196.9 million for the three months ended September 30, 2024 from $125.3 million for the three months ended September 30, 2023. The increase was slightly offset by a decrease in the average cost of borrowings of 22 basis points to 3.64% for the three months ended September 30, 2024 from 3.86% for the three months ended September 30, 2023 due to new borrowings being at lower rates. At September 30, 2024, cash flow hedges used to manage interest rate risk had a notional value of $65.0 million, while fair value hedges totaled $60.0 million in notional value. During the three months ended September 30, 2024, the use of the cash flow and fair value hedges reduced the interest expense on the Federal Home Loan Bank advances and certificates of deposit by $498,000.

    Net interest income decreased $560,000, or 17.4%, to $2.7 million for the three months ended September 30, 2024 from $3.2 million for the three months ended September 30, 2023.  The decrease reflected a 35 basis point decrease in our net interest rate spread to 0.66% for the three months ended September 30, 2024 from 1.01% for the three months ended September 30, 2023. Our net interest margin decreased 32 basis points to 1.15% for the three months ended September 30, 2024 from 1.47% for the three months ended September 30, 2023.

    We did not record a provision for credit losses for the three months ended September 30, 2024 or September 30, 2023 due to moderate loan growth and improved economic conditions.

    Non-interest income increased by $38,000, or 13.0%, to $327,000 for the three months ended September 30, 2024 from $290,000 for the three months ended September 30, 2023.  Bank-owned life insurance income increased $23,000, or 11.6%, due to higher balances during 2024 and gain on sale of loans increased $12,000 compared to no gain on sale of loans for the comparable period last year due to the sale of a $400,000 residential loan in 2024.

    For the three months ended September 30, 2024, non-interest expense decreased $56,000, or 1.5%, over the comparable 2023 period. This was due to a $171,000, or 7.5% reduction in salaries and employee benefits, which decreased due to lower headcount and increased expenses in 2023 related to the retirement of the previous Chief Executive Officer, and a $40,000, or 31.9%, decrease in advertising expenses.  Our FDIC insurance assessment also decreased by $26,000, or 19.8%.  These decreases were partially offset by an increase in professional fees of $99,000, or 66.4%, due to higher consulting expense related to strategic business planning. Data processing expense also increased $100,000, or 48.8%, due to higher processing costs.

    Income tax expense decreased $128,000, or 102.1%, to a benefit of $253,000 for the three months ended September 30, 2024 from a $125,000 benefit for the three months ended September 30, 2023. The decrease was due to a reduction of $466,000 in taxable income. 

    Comparison of Operating Results for the Nine Months Ended September 30, 2024 and September 30, 2023

    Net income decreased by $3.1 million, or 168.1%, to a net loss of $1.2 million for the nine months ended September 30, 2024 from net income of $1.8 million for the nine months ended September 30, 2023.   This decrease was primarily due to a decrease of $4.0 million in net interest income, partially offset by a decrease of $1.2 million in income tax expense.

    Interest income increased $3.4 million, or 12.4%, from $27.7 million for the nine months ended September 30, 2023 to $31.1 million for the nine months ended September 30, 2024 due to higher yields on interest-earning assets and an increase in the average balance of securities, partially offset by a decrease in the average balance of loans and cash and cash equivalents. 

    Interest income on cash and cash equivalents decreased $8,000, or 1.9%, to $415,000 for the nine months ended September 30, 2024 from $423,000 for the nine months ended September 30, 2023 due a $2.3 million decrease in the average balance to $9.1 million for the nine months ended September 30, 2024 from $11.4 million for the nine months ended September 30, 2023, reflecting the decrease of liquidity due to increased securities purchases. This decrease was offset by a 111 basis point increase in the average yield due to the higher interest rate environment.

    Interest income on loans increased $1.1 million, or 4.5%, to $24.9 million for the nine months ended September 30, 2024 compared to $23.8 million for the nine months ended September 30, 2023 due primarily to a 20 basis point increase in the average yield from 4.46% for the nine months ended September 30, 2023 to 4.66% for the nine months ended September 30, 2024, offset by a $1.9 million decrease in the average balance to $711.7 million for the nine months ended September 30, 2024 from $713.6 million for the nine months ended September 30, 2023.

    Interest income on securities increased $2.2 million, or 69.4%, to $5.3 million for the nine months ended September 30, 2024 from $3.1 million for the nine months ended September 30, 2023 primarily due to a 112 basis point increase in the average yield from 2.80% for the nine months ended September 30, 2023 to 3.92% for the nine months ended September 30, 2024, and a $31.0 million increase in the average balance to $179.8 million for the nine months ended September 30, 2024 from $148.8 million for the nine months ended September 30, 2023.

    Income from other interest-earning assets, which primarily consisted of Federal Home Loan Bank stock, increased $209,000, or 27.1% to $981,000 for the nine months ended September 30, 2024 from $772,000 for the nine months ended September 30, 2023 due to dividends paid on such stock.

    Interest expense increased $7.4 million, or 47.4%, from $15.7 million for the nine months ended September 30, 2023 to $23.1 million for the nine months ended September 30, 2024 due to higher costs and average balances on certificates of deposit and borrowings.

    Interest expense on interest-bearing deposits increased $5.6 million, or 43.9%, to $18.4 million for the nine months ended September 30, 2024 from $12.8 million for the nine months ended September 30, 2023. The increase was due to a 128 basis point increase in the average cost of deposits to 3.95% for the nine months ended September 30, 2024 from 2.67% for the nine months ended September 30, 2023. The increase in the average cost of deposits was due to the higher interest rate environment and a change in the composition of the deposit portfolio.  The average balances of certificates of deposit increased $12.0 million to $510.5 million for the nine months ended September 30, 2024 from $498.5 million for the nine months ended September 30, 2023 while average NOW/money market accounts and savings accounts decreased $24.2 million and $5.7 million for the nine months ended September 30, 2024, respectively, compared to the nine months ended September 30, 2023.

    Interest expense on Federal Home Loan Bank advances increased $1.8 million, or 62.7%, from $2.9 million for the nine months ended September 30, 2023 to $4.7 million for the nine months ended September 30, 2024. The increase was primarily due to an increase in the average balance of $60.7 million to $171.6 million for the nine months ended September 30, 2024 from $110.9 million for the nine months ended September 30, 2023. The increase was also due to an increase in the average cost of borrowings of 17 basis points to 3.67% for the nine months ended September 30, 2024 from 3.50% for the nine months ended September 30, 2023 due to new borrowings being at higher rates. At September 30, 2024, cash flow hedges used to manage interest rate risk had a notional value of $65.0 million, while fair value hedges totaled $60.0 million in notional value. During the nine months ended September 30, 2024, the use of the cash flow hedges reduced the interest expense on the Federal Home Loan Bank advances and certificates of deposit by $1.2 million.

    Net interest income decreased $4.0 million, or 33.1%, to $8.0 million for the nine months ended September 30, 2024 from $12.0 million for the nine months ended September 30, 2023.  The decrease reflected a 73 basis point decrease in our net interest rate spread to 0.68% for the nine months ended September 30, 2024 from 1.41% for the nine months ended September 30, 2023. Our net interest margin decreased 64 basis points to 1.18% for the nine months ended September 30, 2024 from 1.82% for the nine months ended September 30, 2023.

    We recorded a $70,000 provision for credit losses for the nine months ended September 30, 2024 compared to a $125,000 recovery for credit losses for the nine-month period ended September 30, 2023, which was due to a decrease in loan balances in 2023. The entire provision in the first three quarters of 2024 was due to an increase in held-to-maturity corporate securities.

    Non-interest income increased by $73,000, or 8.5%, to $929,000 for the nine months ended September 30, 2024 from $856,000 for the nine months ended September 30, 2023.  The increase was primarily due to bank-owned life insurance income, which increased $74,000, or 12.9%, due to higher balances during 2024.

    For the nine months ended September 30, 2024, non-interest expense increased $163,000, or 1.5%, over the comparable 2023 period. Professional fees increased $270,000, or 65.5% due to higher consulting expense related to strategic business planning. Data processing expense increased $210,000, or 29.3%, due to higher processing costs. These were offset by a $333,000, or 4.9%, reduction in salaries and employee benefit, which decreased due to lower headcount and increased expenses in 2023 related to the retirement of the previous Chief Executive Officer.

    Income tax expense decreased $1.2 million, or 312.9%, to a benefit of $821,000 for the nine months ended September 30, 2024 from a $386,000 expense for the nine months ended September 30, 2023. The decrease was due to a reduction of $4.3 million in taxable income. 

    Balance Sheet Analysis

    Total assets were $978.9 million at September 30, 2024, representing an increase of $39.6 million, or 4.2%, from December 31, 2023.  Cash and cash equivalents decreased $3.9 million during the period primarily due to the purchase of new securities offset by loan repayments. Net loans decreased $5.8 million, or 0.8%, due to $22.5 million in repayments including a $12.6 million decrease in the balance of residential loans, as well as a $9.1 million decrease in the balance of construction loans and a decrease of $915,000 in multifamily loans. The decrease was partially offset by new production of $16.7 million, including $13.1 million and $3.6 million of commercial real estate and commercial and industrial loans, respectively.  The Company also purchased a pool of residential loans totaling $10.4 million. Due to the interest rate environment, we have experienced a decrease in demand for residential and construction loans, which have been primary drivers of our loan growth in recent periods.  Securities held to maturity increased $7.4 million, or 10.3%, and securities available for sale increased $40.0 million, or 57.6%, due to new purchases of mortgage-backed securities with excess cash. 

    Delinquent loans increased $8.9 million to $21.5 million, or 3.0% of total loans, at September 30, 2024, compared to $12.6 million, or 1.8% of total loans, at December 31, 2023. The increase was mostly due to four commercial real estate loans to three customers with a balance of $8.1 million. Three of the past due commercial real estate loans are being actively managed with the customers and are expected to be brought current, while one totaling $758,000 has been placed on nonaccrual, but is considered well-secured with a loan-to-value of 59%. During the same timeframe, non-performing assets increased from $12.8 million at December 31, 2023 to $13.8 million, which represented 1.41% of total assets at September 30, 2024. No loans were charged-off during the three or nine months ended September 30, 2024 or September 30, 2023. The Company’s allowance for credit losses related to loans was 0.39% of total loans and 19.94% of non-performing loans at September 30, 2024 compared to 0.39% of total loans and 21.81% of non-performing loans at December 31, 2023.  The Bank does not have any exposure to commercial real estate loans secured by office space. At September 30, 2024, the Company’s allowance for credit losses related to held-to-maturity securities totaled $108,000 or 0.13% of the total held-to-maturity securities portfolio.

    Total liabilities increased $39.8 million, or 5.0%, to $841.9 million mainly due to a $34.9 million increase in borrowings and a $3.9 million increase in total deposits. The increase in deposits reflected an increase in certificate of deposit accounts, which increased by $505,000 to $493.8 million from $493.3 million at December 31, 2023, an increase in NOW deposit accounts, which increased by $4.2 million to $45.5 million from $41.3 million at December 31, 2023, and by an increase in noninterest bearing demand accounts, which increased by $1.6 million from $30.6 million at December 31, 2023 to $32.1 million at September 30, 2024. This was offset by a $2.6 million, or 18.0%, decrease in money market accounts.  At September 30, 2024, brokered deposits were $101.1 million or 16.1% of deposits and municipal deposits were $36.0 million or 5.7% of deposits.  At September 30, 2024, uninsured deposits represented 10.7% of the Bank’s total deposits. Federal Home Loan Bank advances increased $34.9 million, or 20.8%, due to new borrowings, for which the durations have primarily been short-term in nature as we remain mindful of the changing interest rate environment and the potential for further interest rate cuts from the Federal Reserve. Total borrowing capacity at the Federal Home Loan Bank is $297.9 million of which $202.7 million has been advanced.

    Total stockholders’ equity decreased $233,000 to $136.9 million, due to a net loss of $1.2 million and the repurchase of 163,790 shares of stock at a cost of $1.2 million, offset by a decrease in accumulated other comprehensive loss for securities available for sale of $1.6 million and stock compensation of $225,000 for the nine months ended September 30, 2024. At September 30, 2024, the Company’s ratio of average stockholders’ equity-to-total assets was 15.04%, compared to 15.32% at December 31, 2023.

    About Bogota Financial Corp.

    Bogota Financial Corp. is a Maryland corporation organized as the mid-tier holding company of Bogota Savings Bank and is the majority-owned subsidiary of Bogota Financial, MHC. Bogota Savings Bank is a New Jersey chartered stock savings bank that has served the banking needs of its customers in northern and central New Jersey since 1893. It operates from seven offices located in Bogota, Hasbrouck Heights, Upper Saddle River, Newark, Oak Ridge, Parsippany and Teaneck, New Jersey and operates a loan production office in Spring Lake, New Jersey.

    Forward-Looking Statements

    This press release contains certain forward-looking statements about the Company and the Bank. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, inflation, general economic conditions or conditions within the securities markets, real estate market values in the Bank’s lending area, changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; the availability of low-cost funding; our continued reliance on brokered and municipal deposits; demand for loans in our market area; changes in the quality of our loan and security portfolios, economic assumptions or changes in our methodology, either of which may impact our allowance for credit losses calculation, increases in non-performing and classified loans, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees and legislative, accounting and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.
    The Company undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

    BOGOTA FINANCIAL CORP.
    CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
    (unaudited)
               
      As of     As of  
      September 30, 2024     December 31, 2023  
    Assets              
    Cash and due from banks $ 10,630,086     $ 13,567,115  
    Interest-bearing deposits in other banks   10,372,434       11,362,356  
    Cash and cash equivalents   21,002,520       24,929,471  
    Securities available for sale, at fair value   108,560,811       68,888,179  
    Securities held to maturity, net of allowance for securities credit losses of $108,000 and zero, respectively (fair value – $74,603,097 and $65,374,753, respectively)   80,103,753       72,656,179  
    Loans, net of allowance for credit losses of $2,747,949 and $2,785,949, respectively   708,896,566       714,688,635  
    Premises and equipment, net   7,853,076       7,687,387  
    Federal Home Loan Bank (FHLB) stock and other restricted securities   10,180,100       8,616,100  
    Accrued interest receivable   4,352,967       3,932,785  
    Core deposit intangibles   165,454       206,116  
    Bank-owned life insurance   31,635,988       30,987,851  
    Other assets   6,138,029       6,731,500  
    Total Assets $ 978,889,264     $ 939,324,203  
    Liabilities and Equity              
    Non-interest bearing deposits $ 32,125,742     $ 30,554,842  
    Interest bearing deposits   597,141,995       594,792,300  
    Total deposits   629,267,737       625,347,142  
    FHLB advances-short term   53,500,000       37,500,000  
    FHLB advances-long term   149,065,610       130,189,663  
    Advance payments by borrowers for taxes and insurance   3,265,262       2,733,709  
    Other liabilities   6,850,898       6,380,486  
    Total liabilities   841,949,507       802,151,000  
                   
    Stockholders’ Equity              
    Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at September 30, 2024 and December 31, 2023   —       —  
    Common stock $0.01 par value, 30,000,000 shares authorized, 13,092,357 issued and outstanding at September 30, 2024 and 13,279,230 at December 31, 2023   130,823       132,792  
    Additional paid-in capital   55,315,975       56,149,915  
    Retained earnings   90,936,649       92,177,068  
    Unearned ESOP shares (389,674 shares at September 30, 2024 and 409,750 shares at December 31, 2023)   (4,595,895 )     (4,821,798 )
    Accumulated other comprehensive loss   (4,847,795 )     (6,464,774 )
    Total stockholders’ equity   136,939,757       137,173,203  
    Total liabilities and stockholders’ equity $ 978,889,264     $ 939,324,203  
     
    BOGOTA FINANCIAL CORP.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (unaudited)
     
      Three Months Ended     Nine Months Ended  
      September 30,     September 30,  
      2024     2023     2024     2023  
    Interest income                              
    Loans, including fees $ 8,381,581     $ 7,980,388     $ 24,888,377     $ 23,821,545  
    Securities                              
    Taxable   1,884,276       994,791       5,247,336       3,042,389  
    Tax-exempt   13,137       13,159       39,409       78,293  
    Other interest-earning assets   341,268       301,081       980,536       771,584  
    Total interest income   10,620,262       9,289,419       31,155,658       27,713,811  
    Interest expense                              
    Deposits   6,160,547       4,851,926       18,384,323       12,777,907  
    FHLB advances   1,802,387       1,220,166       4,719,056       2,900,359  
    Total interest expense   7,962,934       6,072,092       23,103,379       15,678,266  
    Net interest income   2,657,328       3,217,327       8,052,279       12,035,545  
    Provision (recovery) for credit losses   —       —       70,000       (125,000 )
    Net interest income after provision (recovery) for credit losses   2,657,328       3,217,327       7,982,279       12,160,545  
    Non-interest income                              
    Fees and service charges   56,610       61,529       164,400       159,381  
    Gain on sale of loans   11,710       —       11,710       29,375  
    Bank-owned life insurance   221,122       197,873       648,137       574,073  
    Other   37,943       30,332       105,420       93,660  
    Total non-interest income   327,385       289,734       929,667       856,489  
    Non-interest expense                              
    Salaries and employee benefits   2,102,993       2,274,347       6,404,946       6,737,952  
    Occupancy and equipment   380,714       372,626       1,118,739       1,114,170  
    FDIC insurance assessment   106,313       132,571       313,626       319,690  
    Data processing   306,167       205,721       928,292       717,913  
    Advertising   85,750       126,000       310,950       369,383  
    Director fees   159,851       159,336       467,100       478,011  
    Professional fees   248,420       149,251       682,517       412,519  
    Other   214,686       241,530       747,598       661,300  
    Total non-interest expense   3,604,894       3,661,382       10,973,768       10,810,938  
    (Loss) income before income taxes   (620,181 )     (154,321 )     (2,061,822 )     2,206,096  
    Income tax (benefit) expense   (253,221 )     (125,268 )     (821,403 )     385,801  
    Net (loss) income $ (366,960 )   $ (29,053 )   $ (1,240,419 )   $ 1,820,295  
    (Loss) earnings per Share – basic $ (0.03 )   $ (0.00 )   $ (0.10 )   $ 0.14  
    (Loss) earnings per Share – diluted $ (0.03 )   $ (0.00 )   $ (0.10 )   $ 0.14  
    Weighted average shares outstanding – basic   12,702,683       13,037,903       12,702,683       13,103,951  
    Weighted average shares outstanding – diluted   12,717,904       13,037,903       12,734,624       13,103,951  
                                   
    BOGOTA FINANCIAL CORP.
    SELECTED RATIOS
    (unaudited)
               
      At or For the Three Months     At or for the Nine Months  
      Ended September 30,     Ended September 30,  
      2024     2023     2024     2023  
    Performance Ratios (1):                              
    (Loss) return on average assets (2)   (0.07 )%     (0.01 )%     (0.20 )%     0.26 %
    (Loss) return on average equity (3)   (0.52 )%     (0.08 )%     (1.44 )%     1.75 %
    Interest rate spread (4)   0.66 %     1.01 %     0.68 %     1.41 %
    Net interest margin (5)   1.15 %     1.47 %     1.18 %     1.82 %
    Efficiency ratio (6)   120.78 %     104.40 %     122.18 %     83.05 %
    Average interest-earning assets to average interest-bearing liabilities   114.30 %     116.68 %     114.62 %     117.21 %
    Net loans to deposits   110.67 %     110.08 %     114.43 %     110.08 %
    Average equity to average assets (7)   14.01 %     15.00 %     14.14 %     14.88 %
    Capital Ratios:                              
    Tier 1 capital to average assets                   13.47 %     15.67 %
    Asset Quality Ratios:                              
    Allowance for credit losses as a percent of total loans                   0.39 %     0.39 %
    Allowance for credit losses as a percent of non-performing loans                   19.94 %     22.62 %
    Net charge-offs to average outstanding loans during the period                   0.00 %     0.00 %
    Non-performing loans as a percent of total loans                   1.94 %     1.73 %
    Non-performing assets as a percent of total assets                   1.41 %     1.33 %
                                   
    (1) Certain performance ratios for the three and nine months ended September 30, 2024 and 2023 are annualized.
    (2) Represents net (loss) income divided by average total assets.
    (3) Represents net (loss) income divided by average stockholders’ equity.
    (4) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of average interest-bearing liabilities. Tax exempt income is reported on a tax equivalent basis using a combined federal and state marginal tax rate of 27.5% for 2024 and 2023.
    (5) Represents net interest income as a percent of average interest-earning assets. Tax exempt income is reported on a tax equivalent basis using a combined federal and state marginal tax rate of 27.5% for 2024 and 2023.
    (6) Represents non-interest expenses divided by the sum of net interest income and non-interest income.
    (7) Represents average stockholders’ equity divided by average total assets.
     

    LOANS

    Loans are summarized as follows at September 30, 2024 and December 31, 2023:

     
      September 30,     December 31,  
      2024     2023  
      (unaudited)  
    Real estate:              
    Residential First Mortgage $ 473,492,871     $ 486,052,422  
    Commercial Real Estate   112,899,496       99,830,514  
    Multi-Family Real Estate   74,697,352       75,612,566  
    Construction   40,243,916       49,302,040  
    Commercial and Industrial   10,229,503       6,658,370  
    Consumer   81,377       18,672  
    Total loans   711,644,515       717,474,584  
    Allowance for credit losses   (2,747,949 )     (2,785,949 )
    Net loans $ 708,896,566     $ 714,688,635  
     

    The following tables set forth the distribution of total deposit accounts, by account type, at the dates indicated:

     
      At September 30,     At December 31,  
      2024     2023  
      Amount     Percent     Average
    Rate    		     Amount     Percent     Average
    Rate    		  
                                                   
      (unaudited)  
    Noninterest bearing demand accounts $ 32,125,742       5.11 %     — %   $ 30,554,842       4.89 %     — %
    NOW accounts   45,493,204       7.23 %     2.21       41,320,723       6.61 %     1.90  
    Money market accounts   12,003,291       1.91 %     0.30       14,641,846       2.34 %     0.30  
    Savings accounts   45,865,501       7.29 %     1.82       45,554,964       7.28 %     1.76  
    Certificates of deposit   493,779,999       78.47 %     4.15       493,274,767       78.88 %     4.00  
    Total $ 629,267,737       100.00 %     3.55 %   $ 625,347,142       100.00 %     3.42 %
     

    Average Balance Sheets and Related Yields and Rates

    The following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances have been calculated using daily balances. Nonaccrual loans are included in average balances only. Loan fees are included in interest income on loans and are not material.

     
      Three Months Ended September 30,  
      2024     2023  
      Average
    Balance    		     Interest and Dividends     Yield/ Cost     Average
    Balance    		     Interest and Dividends     Yield/ Cost  
      (Dollars in thousands)  
    Assets: (unaudited)  
    Cash and cash equivalents $ 10,195     $ 138       5.39 %   $ 12,764     $ 168       5.21 %
    Loans   711,601       8,381       4.69 %     710,725       7,981       4.45 %
    Securities   187,212       1,897       4.05 %     138,479       1,008       2.91 %
    Other interest-earning assets   9,908       203       8.20 %     6,620       132       8.04 %
    Total interest-earning assets   918,916       10,619       4.60 %     868,588       9,289       4.25 %
                                                   
    Non-interest-earning assets   56,061                       54,179                  
    Total assets $ 974,977                     $ 922,767                  
    Liabilities and equity:                                              
    NOW and money market accounts $ 65,767     $ 329       1.99 %   $ 74,785     $ 354       1.88 %
    Savings accounts   44,029       205       1.85 %     46,177       214       1.83 %
    Certificates of deposit (1)   497,251       5,626       4.50 %     498,082       4,284       3.41 %
    Total interest-bearing deposits   607,047       6,160       4.04 %     619,044       4,852       3.11 %
                                                   
    Federal Home Loan Bank advances (1)   196,885       1,802       3.64 %     125,344       1,220       3.86 %
    Total interest-bearing liabilities   803,932       7,962       3.94 %     744,388       6,072       3.24 %
    Non-interest-bearing deposits   31,679                       38,257                  
    Other non-interest-bearing liabilities   2,724                       1,727                  
    Total liabilities   838,335                       784,372                  
                                                   
    Total equity   136,642                       138,395                  
    Total liabilities and equity $ 974,977                     $ 922,767                  
    Net interest income         $ 2,657                     $ 3,217          
    Interest rate spread (2)                   0.66 %                     1.01 %
    Net interest margin (3)                   1.15 %                     1.47 %
    Average interest-earning assets to average interest-bearing liabilities   114.30 %                     116.68 %                
     
    1. Cash flow and fair value hedges are used to manage interest rate risk. During the three months ended September 30, 2024 and 2023, the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expense of $498,000 and $92,000, respectively.
    2. Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
    3. Net interest margin represents net interest income divided by average total interest-earning assets.
     
      Nine Months Ended September 30,  
      2024     2023  
      Average Balance     Interest and Dividends     Yield/ Cost     Average Balance     Interest and Dividends     Yield/ Cost  
      (Dollars in thousands)  
    Assets:                                              
    Cash and cash equivalents $ 9,072     $ 415       6.09 %   $ 11,352     $ 423       4.98 %
    Loans   711,697       24,888       4.66 %     713,603       23,822       4.46 %
    Securities   179,818       5,287       3.92 %     148,802       3,121       2.80 %
    Other interest-earning assets   8,903       566       8.48 %     6,110       348       7.62 %
    Total interest-earning assets   909,490       31,156       4.57 %     879,867       27,714       4.20 %
    Non-interest-earning assets   58,221                       54,380                  
    Total assets $ 967,711                     $ 934,247                  
    Liabilities and equity:                                              
    NOW and money market accounts $ 67,628     $ 993       1.96 %   $ 91,781     $ 1,089       1.59 %
    Savings accounts   43,824       608       1.85 %     49,529       375       1.01 %
    Certificates of deposit (1)   510,494       16,784       4.39 %     498,460       11,314       3.03 %
    Total interest-bearing deposits   621,946       18,385       3.95 %     639,770       12,778       2.67 %
    Federal Home Loan Bank advances (1)   171,565       4,719       3.67 %     110,875       2,900       3.50 %
    Total interest-bearing liabilities   793,511       23,104       3.89 %     750,645       15,678       2.79 %
    Non-interest-bearing deposits   31,225                       38,253                  
    Other non-interest-bearing liabilities   6,154                       6,351                  
    Total liabilities   830,890                       795,249                  
    Total equity   136,821                       138,998                  
    Total liabilities and equity $ 967,711                     $ 934,247                  
    Net interest income         $ 8,052                     $ 12,036          
    Interest rate spread (2)                   0.68 %                     1.41 %
    Net interest margin (3)                   1.18 %                     1.82 %
    Average interest-earning assets to average interest-bearing liabilities   114.62 %                     117.21 %                
     
    1. Cash flow and fair value hedges are used to manage interest rate risk. During the nine months ended September 30, 2024 and 2023, the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expense of $1.2 million and $139,000, respectively.
    2. Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
    3. Net interest margin represents net interest income divided by average total interest-earning assets.
     

    Rate/Volume Analysis

    The following table sets forth the effects of changing rates and volumes on net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on the changes due to rate and the changes due to volume.

     
      Three Months Ended September 30, 2024     Nine Months Ended September 30, 2024  
      Compared to     Compared to  
      Three Months Ended September 30, 2023     Nine Months Ended September 30, 2023  
      Increase (Decrease) Due to     Increase (Decrease) Due to  
      Volume     Rate     Net     Volume     Rate     Net  
      (In thousands)  
    Interest income: (unaudited)  
    Cash and cash equivalents $ (66 )   $ 36     $ (30 )   $ (123 )   $ 115     $ (8 )
    Loans receivable   9       391       400       (101 )     1,167       1,066  
    Securities   420       469       889       742       1,424       2,166  
    Other interest earning assets   68       3       71       175       43       218  
    Total interest-earning assets   432       898       1,330       692       2,750       3,442  
                                                   
    Interest expense:                                              
    NOW and money market accounts   (128 )     103       (25 )     (413 )     317       (96 )
    Savings accounts   (24 )     15       (9 )     (73 )     306       233  
    Certificates of deposit   (49 )     1,391       1,342       279       5,191       5,470  
    Federal Home Loan Bank advances   1,031       (449 )     582       1,667       152       1,819  
    Total interest-bearing liabilities   830       1,060       1,890       1,461       5,965       7,426  
    Net decrease in net interest income $ (398 )   $ (162 )   $ (560 )   $ (768 )   $ (3,216 )   $ (3,984 )
     

    Contacts
    Kevin Pace – President & CEO, 201-862-0660 ext. 1110

    The MIL Network –

  • MIL-OSI USA: New Jersey Resident Pleads Guilty to Helping Russia’s Defense Sector Evade U.S. Export Controls

    Source: US State of North Dakota

    Defendant Facilitated Russia’s Acquisition of Millions of Dollars of U.S.-Made Dual-Use Electronics Used in Radar, Surveillance, and Military Research and Development

    Vadim Yermolenko, 43, a dual U.S.-Russian national and resident of New Jersey, pleaded guilty to conspiracy to violate the Export Control Reform Act, conspiracy to commit bank fraud, and conspiracy to defraud the United States for his role in a transnational procurement and money laundering network that sought to acquire sensitive dual-use electronics for Russian military and intelligence services.

    “This defendant joins the nearly two dozen other criminals that our Task Force KleptoCapture has brought to justice in American courtrooms over the past two and a half years for enabling Russia’s military aggression,” said Attorney General Merrick B. Garland. “This defendant admitted to playing a central role in a now-disrupted scheme with Russian intelligence services to smuggle sniper rifle ammunition and U.S. military grade equipment into Russia. The Justice Department will never stop working to aggressively disrupt and prosecute both the criminal networks and the individuals responsible for bolstering the Russian war machine.”

    “The illegal export of sensitive, dual-use technologies in support of Russia’s war effort poses a significant threat to the United States and its allies and must not be tolerated,” said FBI Director Christopher Wray. “The defendant in this case played a key role in exporting U.S. technology that in the hands of our adversaries could pose great danger to our national security. The FBI and its partners will continue to focus on protecting strategic innovation at home and hold accountable anyone who facilitates illegal transfers to hostile nations like Russia.”

    “To facilitate the Russian war machine, the defendant played a critical role in exporting sensitive, dual-use technologies to Russia, facilitating shipping and the movement of millions of dollars through U.S. financial institutions,” said U.S. Attorney Breon Peace for the Eastern District of New York. “This plea highlights my Office and our law enforcement partners continued commitment to use all tools available to prosecute those who unlawfully procure U.S. technology to send to Russia.”

    According to court documents, the defendant was affiliated with Serniya Engineering and Sertal LLC, Moscow-based companies that operate under the direction of Russian intelligence services to procure advanced electronics and sophisticated testing equipment for Russia’s military industrial complex and research and development sector. Serniya and Sertal operated a vast network of shell companies and bank accounts throughout the world, including the United States, that were used in furtherance of the scheme to conceal the involvement of the Russian government and the true Russian end users of U.S.-origin equipment.

    The defendant and his co-conspirators unlawfully purchased and exported highly sensitive, export controlled electronic components, some of which can be used in the development of nuclear and hypersonic weapons, quantum computing and other military applications. Following Russia’s invasion of Ukraine in February 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce (DOC) Bureau of Industry and Security (BIS) levied sanctions and imposed additional export restrictions on Serniya, Sertal, and several individuals and companies used in the scheme, calling them “instrumental to the Russian Federation’s war machine.”

    Sertal was licensed to conduct highly sensitive and classified procurement activities by Russia’s Federal Security Service (FSB), Russia’s principal security agency and the main successor agency to the Soviet Union’s KGB. The Serniya network’s Russian clients included State Corporation Rostec, the state-owned defense conglomerate; State Atomic Energy Corporation Rosatom (Rosatom); the Ministry of Defense; the Foreign Intelligence Service (SVR); and various components of the FSB, including the Department of Military Counterintelligence and the Directorate for Scientific and Technological Intelligence, commonly known as “Directorate T.”

    To carry out the scheme, the defendant helped set up numerous shell companies and dozens of bank accounts in the U.S. to illicitly move money and export-controlled goods. During the period charged in the indictment, more than $12 million passed through accounts owned or controlled by the defendant. These funds were used in part to purchase sensitive equipment used in radar, surveillance and military research and development. In one instance, money from one of the defendant’s accounts was used to purchase export-controlled sniper bullets, which were intercepted in Estonia before they could be smuggled into Russia.

    Co-defendant Alexey Brayman previously pleaded guilty to conspiracy to defraud the United States and is awaiting sentence. The case against co-defendant Vadim Konoshchenok, a suspected FSB operative, was dismissed after Konoshchenok was removed from the United States as part of a prisoner exchange negotiated between the United States and Russia. Defendant Nikolaos Bogonikolos’ case remains pending. Defendants Boris Livshits, Alexey Ippolitov, Svetlana Skvortsova, and Yevgeniy Grinin remain at large.        

    The FBI, BIS, and IRS are investigating the case.

    The U.S. Customs and Border Protection, Department of Justice’s Office of International Affairs, and Estonian authorities provided valuable assistance.

    Assistant U.S. Attorneys Artie McConnell, Andrew D. Reich, and Matthew Skurnik for the Eastern District of New York are prosecuting the case, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

    Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

    MIL OSI USA News –

  • MIL-OSI USA: Georgia CPA Sentenced in Syndicated Conservation Easement Tax Scheme

    Source: US State of North Dakota

    Defendant Helped Clients File Tax Returns Claiming $14M in False Deductions, Causing Nearly $5M in Loss to the IRS

    A Georgia accountant was sentenced today to 28 months in prison for his role in the promotion and sale of abusive syndicated conservation easement tax shelters.

    According to court documents and statements made in court, Herbert Lewis was a CPA and return preparer at an Atlanta-based accounting firm. Beginning at least in 2014 and through at least 2019, Lewis promoted and sold tax deductions to his wealthy clients in the form of units in illegal syndicated conservation easement tax shelters organized and created by co-defendants Jack Fisher, James Sinnott and others.

    According to court documents and statements made in court, Lewis also knew that, contrary to law, the transactions related to these illegal tax shelters lacked economic substance, that his wealthy clients participated only to obtain a tax deduction and that his clients received only a tax benefit for their participation in the shelters. For example, the scheme entailed the creation of partnerships that would purchase land and land-owning companies and then donate conservation easements over that land or the land itself. A client who purchased units in one of these partnerships had a “vote” ostensibly on what to do with the land the partnership owned. However, Lewis knew that the vote held by the partnership each year was just for optics and that the land invariably would be donated largely as a conservation easement.

    In some cases, in order to make it appear that his clients had joined the partnerships before the date of the conservation easement donation, which was necessary to claim the tax benefits, Lewis also instructed and caused his clients to falsely backdate documents — such as subscription agreements and checks — related to the partnerships. In 2019 alone, Lewis assisted 15 clients with claiming false deductions on their 2018 returns.

    In total, Lewis assisted in the preparation of tax returns that claimed nearly $14 million in false deductions based on backdated documents, causing a tax loss to the IRS of nearly $5 million.   

    Lewis earned over $1 million in commissions for his role in promoting and selling the illegal tax shelters to clients. Lewis also concealed the amount of commissions he had earned from selling units in these shelters by not fully reporting the commissions on his personal returns and instead fraudulently reporting commission income he had earned as income on the tax returns of nominee entities in his children’s names.

    In addition to his prison sentence, U.S. District Court Judge Timothy C. Batten Sr. for the Northern District of Georgia ordered Lewis to serve three years of supervised release and to pay $4,878,990.90 in restitution.

    Nine additional defendants have previously pleaded guilty to criminal conduct related to the syndicated conservation easement tax shelter scheme. These other defendants include appraiser Walter Douglas “Terry” Roberts, accountant Stein Agee, CPA Corey Agee, CPA Ralph Anderson, CPA James Benkoil, CPA Victor Smith, CPA William Tomasello, CPA and attorney Randall Lenz and attorney Vi Bui.

    Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia and IRS Criminal Investigation Chief Guy Ficco made the announcement. They also thanked U.S. Attorney Dena J. King for the Western District of North Carolina for her office’s assistance.

    IRS Criminal Investigation and the U.S. Postal Inspection Service investigated the case.

    Trial Attorneys Richard M. Rolwing, Parker Tobin, Jessica Kraft and Nicholas J. Schilling Jr. of the Justice Department’s Tax Division and Assistant U.S. Attorney Christopher Huber, Deputy Chief of the Complex Frauds Section of the Northern District of Georgia, are prosecuting the case.

    MIL OSI USA News –

  • MIL-OSI USA: Owner of Florida Labor-Staffing Companies Pleads Guilty to Tax Fraud and Money Laundering

    Source: US State of North Dakota

    A Ukrainian national pleaded guilty today to conspiracy to defraud the United States and conspiracy to commit money laundering.

    According to the court documents and statements made in court, between April 2008 and July 2021, Oleksandr Yurchyk and others owned and operated a series of labor-staffing companies in southern Florida, including Paradise Choice LLC, Paradise Choice Cleaning LLC, Tropical City Services LLC and Tropical City Group LLC. Through these staffing companies, Yurchyk and others facilitated the employment of non-resident aliens in the hospitality industry who were not authorized to work in the United States and helped evade the assessment and collection of federal income and employment taxes. Yurchyk and his co-defendants also laundered more than $11 million of proceeds from their scheme.

    Yurchyk is scheduled to be sentenced on Jan. 27, 2025. He faces a maximum penalty of 20 years in prison for the conspiracy to commit money laundering and five years in prison for the conspiracy to defraud the United States. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

    Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Markenzy Lapointe for the Southern District of Florida made the announcement.

    Homeland Security Investigations and IRS Criminal Investigation are investigating the case.

    Senior Litigation Counsel Sean Beaty and Trial Attorneys Matthew B. Hicks and Wilson R. Stamm of the Justice Department’s Tax Division and Senior Litigation Counsel Christopher J. Clark for the Southern District of Florida are prosecuting the case.

    MIL OSI USA News –

  • MIL-OSI USA: Court Permanently Stops Texas Professional and Business from Organizing and Selling “Tax Plans”

    Source: US State of North Dakota

    Agreed Order also Bars Professional from Preparing Tax Returns and Business from Preparing Tax Returns Reflecting Certain “Tax Plans”

    The U.S. District Court for the Northern District of Texas entered permanent injunctions today against Charles Dombek and The Optimal Financial Group LLC barring them from promoting any tax plan that involves creating or using sham management companies, deducting personal non-deductible expenses as business expenses or assisting in the creation of “captive” insurance companies. The injunctions also prohibit Dombek from preparing any federal tax returns for anyone other than himself and Optimal from preparing certain federal tax returns reflecting such tax plans. Dombek and Optimal consented to entry of the injunctions.

    According to the government’s complaint, Dombek is a licensed CPA and served as Optimal’s manager and president. Allegedly, Dombek and Optimal promoted a tax scheme throughout the United States to illegally reduce customers’ income tax liabilities by using sham management companies to improperly shift income to be taxed at lower tax rates, improperly defer taxable income or claim personal expenses as bogus business deductions. As alleged by the government, Dombek promoted himself as the “premier dental CPA” in America. The complaint further alleges that in promoting the schemes, Dombek and Optimal made false statements about the tax benefits of the scheme that they knew or had reason to know were false, then prepared and signed tax returns for their customers reflecting the sham transactions, expenses and deductions. The government contended that the total harm to the treasury from the scheme could have been $10 million or more.

    Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

    Each year the IRS highlights some of the tax scams that put taxpayers at risk of losing money, personal information, data and more. In the IRS’s most recent list, it specifically warned taxpayers “to beware of promoters peddling bogus tax schemes aimed at reducing taxes or avoiding them altogether.”

    Working with the IRS, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters over the past decade. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

    MIL OSI USA News –

  • MIL-OSI USA: Compound Ingredient Supplier Medisca Inc., to Pay $21.75M to Resolve Allegations of False and Inflated Average Wholesale Prices for Ingredients Used in Compounded Prescriptions

    Source: US State of California

    The Justice Department announced today that Medisca Inc. (Medisca), has agreed to pay $21.75 million to resolve allegations concerning the establishment of false and inflated Average Wholesale Prices (AWPs) for two ingredients used in compound prescriptions. Medisca’s pricing scheme allegedly caused pharmacies that purchased those ingredients to submit false prescription claims to the Defense Health Agency, which administers the TRICARE Program for the Department of Defense and the Department of Labor’s Office of Workers’ Compensation Programs (federal health care programs).

    “We will not tolerate fraudulent pricing schemes targeting health care programs that support veterans and other federal beneficiaries,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As today’s settlement demonstrates, we will hold accountable not just those who submit false claims, but all who participate in schemes designed to defraud the American taxpayers.”

    Compounding pharmacies purchase ingredients or chemicals from ingredient suppliers, such as Medisca, to prepare and fill compound prescriptions for patients who require a specially made prescription that is not generally available in the marketplace. Medisca knew that compound prescription reimbursement under federal health care programs was based in part on the AWPs it reported to various price listing agencies. The United States alleged that Medisca knowingly inflated the AWPs for resveratrol (NDC No. 38779-2863) and mometasone furoate (NDC No. 38779-2413) in order to increase the reimbursement that its pharmacy customers received from the federal healthcare programs for using those Medisca ingredients.

    Medisca acquired resveratrol from manufacturers for approximately $0.37 per gram. It repackaged and sold resveratrol for under $2 per gram. Medisca reported an AWP for resveratrol at $777 per gram, creating a spread of over $775 for each gram of resveratrol used by a pharmacy customer in a compound prescription reimbursed by the federal healthcare programs. Medisca acquired mometasone furoate from manufacturers for under $8 per gram. It repackaged and sold that ingredient to compound pharmacies for over $1,000 per gram. Medisca reported an AWP for mometasone furoate at over $7,300 per gram, thereby creating a spread of approximately $6,300 for each gram of the ingredient used by a pharmacy customer in a compound prescription reimbursed by the federal healthcare programs.  

    Medisca allegedly used the high AWPs it reported and the resulting profit potential it created for its customers as an inducement to its compound pharmacy customers to purchase those ingredients. Medisca’s alleged fraudulent pricing scheme enabled its pharmacy customers to bill federal healthcare programs inflated amounts – often thousands of dollars per prescription – for compound formulations containing those ingredients.

    “The systems establishing federal reimbursements for compounded pharmaceuticals should not be viewed by companies as an opportunity to artificially inflate reimbursements from federal payors such as TRICARE,” said U.S. Attorney Damien M. Diggs for the Eastern District of Texas. “When companies seek to manipulate the system for their own gain, the Eastern District of Texas will hold them accountable.”

    “When federal healthcare programs are defrauded it hurts all Americans,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “My office is committed to using the False Claims Act (FCA) to hold individuals and companies accountable for the impact their actions have on our critical programs. Taxpayers deserve honest pricing and assurances that the government is never overcharged.”

    “This settlement sends a clear message about the unwavering commitment of the Defense Criminal Investigation Service (DCIS) to protect the integrity of TRICARE, the Department of Defense’s health care benefit program which serves our U.S. military, their family members, and military retirees,” said Acting Special Agent in Charge Ryan Settle of the Department of Defense – Office of Inspector General, DCIS Southwest Field Office. “Health care providers who use fraudulent means to seek financial gain at the expense of TRICARE and the taxpayer will be diligently investigated and held accountable.”

    The settlement resolves claims brought under the whistleblower or qui tam provisions of the FCA by Doug McMakin against Medisca. Mr. McMakin is a pharmacist who owned and operated a compounding pharmacy that dispensed compounded prescriptions. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. Mr. McMakin will receive $3,425,625 from the proceeds of the settlement. The lawsuit is captioned United States ex rel. McMakin v. Medisca Inc. (EDTX).  

    The resolution of these matters was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorneys’ Offices for the Eastern District of Texas and the Western District of Texas, with investigative support from the DCIS, U.S. Postal Service Office of Inspector General (USPS OIG) and the Department of Labor.  

    The investigation and resolution of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

    Senior Trial Counsel Sanjay Bhambhani and Trial Attorney John Deck of the Civil Division, Assistant U.S. Attorney Mary Kruger for the Western District of Texas and Assistant U.S. Attorney James Gillingham for the Eastern District of Texas handled the matter, with investigative assistance from Special Agents Nicholas Koechig of DCIS and Timothy Jones of USPS OIG.

    The claims resolved by the settlement are allegations only. There has been no determination of liability.

    Settlement

    MIL OSI USA News –

  • MIL-OSI Security: Court Permanently Stops Texas Professional and Business from Organizing and Selling “Tax Plans”

    Source: United States Attorneys General

    Agreed Order also Bars Professional from Preparing Tax Returns and Business from Preparing Tax Returns Reflecting Certain “Tax Plans”

    The U.S. District Court for the Northern District of Texas entered permanent injunctions today against Charles Dombek and The Optimal Financial Group LLC barring them from promoting any tax plan that involves creating or using sham management companies, deducting personal non-deductible expenses as business expenses or assisting in the creation of “captive” insurance companies. The injunctions also prohibit Dombek from preparing any federal tax returns for anyone other than himself and Optimal from preparing certain federal tax returns reflecting such tax plans. Dombek and Optimal consented to entry of the injunctions.

    According to the government’s complaint, Dombek is a licensed CPA and served as Optimal’s manager and president. Allegedly, Dombek and Optimal promoted a tax scheme throughout the United States to illegally reduce customers’ income tax liabilities by using sham management companies to improperly shift income to be taxed at lower tax rates, improperly defer taxable income or claim personal expenses as bogus business deductions. As alleged by the government, Dombek promoted himself as the “premier dental CPA” in America. The complaint further alleges that in promoting the schemes, Dombek and Optimal made false statements about the tax benefits of the scheme that they knew or had reason to know were false, then prepared and signed tax returns for their customers reflecting the sham transactions, expenses and deductions. The government contended that the total harm to the treasury from the scheme could have been $10 million or more.

    Deputy Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.

    Each year the IRS highlights some of the tax scams that put taxpayers at risk of losing money, personal information, data and more. In the IRS’s most recent list, it specifically warned taxpayers “to beware of promoters peddling bogus tax schemes aimed at reducing taxes or avoiding them altogether.”

    Working with the IRS, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters over the past decade. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

    MIL Security OSI –

  • MIL-OSI Security: Compound Ingredient Supplier Medisca Inc., to Pay $21.75M to Resolve Allegations of False and Inflated Average Wholesale Prices for Ingredients Used in Compounded Prescriptions

    Source: United States Attorneys General 7

    The Justice Department announced today that Medisca Inc. (Medisca), has agreed to pay $21.75 million to resolve allegations concerning the establishment of false and inflated Average Wholesale Prices (AWPs) for two ingredients used in compound prescriptions. Medisca’s pricing scheme allegedly caused pharmacies that purchased those ingredients to submit false prescription claims to the Defense Health Agency, which administers the TRICARE Program for the Department of Defense and the Department of Labor’s Office of Workers’ Compensation Programs (federal health care programs).

    “We will not tolerate fraudulent pricing schemes targeting health care programs that support veterans and other federal beneficiaries,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “As today’s settlement demonstrates, we will hold accountable not just those who submit false claims, but all who participate in schemes designed to defraud the American taxpayers.”

    Compounding pharmacies purchase ingredients or chemicals from ingredient suppliers, such as Medisca, to prepare and fill compound prescriptions for patients who require a specially made prescription that is not generally available in the marketplace. Medisca knew that compound prescription reimbursement under federal health care programs was based in part on the AWPs it reported to various price listing agencies. The United States alleged that Medisca knowingly inflated the AWPs for resveratrol (NDC No. 38779-2863) and mometasone furoate (NDC No. 38779-2413) in order to increase the reimbursement that its pharmacy customers received from the federal healthcare programs for using those Medisca ingredients.

    Medisca acquired resveratrol from manufacturers for approximately $0.37 per gram. It repackaged and sold resveratrol for under $2 per gram. Medisca reported an AWP for resveratrol at $777 per gram, creating a spread of over $775 for each gram of resveratrol used by a pharmacy customer in a compound prescription reimbursed by the federal healthcare programs. Medisca acquired mometasone furoate from manufacturers for under $8 per gram. It repackaged and sold that ingredient to compound pharmacies for over $1,000 per gram. Medisca reported an AWP for mometasone furoate at over $7,300 per gram, thereby creating a spread of approximately $6,300 for each gram of the ingredient used by a pharmacy customer in a compound prescription reimbursed by the federal healthcare programs.  

    Medisca allegedly used the high AWPs it reported and the resulting profit potential it created for its customers as an inducement to its compound pharmacy customers to purchase those ingredients. Medisca’s alleged fraudulent pricing scheme enabled its pharmacy customers to bill federal healthcare programs inflated amounts – often thousands of dollars per prescription – for compound formulations containing those ingredients.

    “The systems establishing federal reimbursements for compounded pharmaceuticals should not be viewed by companies as an opportunity to artificially inflate reimbursements from federal payors such as TRICARE,” said U.S. Attorney Damien M. Diggs for the Eastern District of Texas. “When companies seek to manipulate the system for their own gain, the Eastern District of Texas will hold them accountable.”

    “When federal healthcare programs are defrauded it hurts all Americans,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “My office is committed to using the False Claims Act (FCA) to hold individuals and companies accountable for the impact their actions have on our critical programs. Taxpayers deserve honest pricing and assurances that the government is never overcharged.”

    “This settlement sends a clear message about the unwavering commitment of the Defense Criminal Investigation Service (DCIS) to protect the integrity of TRICARE, the Department of Defense’s health care benefit program which serves our U.S. military, their family members, and military retirees,” said Acting Special Agent in Charge Ryan Settle of the Department of Defense – Office of Inspector General, DCIS Southwest Field Office. “Health care providers who use fraudulent means to seek financial gain at the expense of TRICARE and the taxpayer will be diligently investigated and held accountable.”

    The settlement resolves claims brought under the whistleblower or qui tam provisions of the FCA by Doug McMakin against Medisca. Mr. McMakin is a pharmacist who owned and operated a compounding pharmacy that dispensed compounded prescriptions. Under the FCA, private parties may sue on behalf of the government for false claims for government funds and receive a share of any recovery. Mr. McMakin will receive $3,425,625 from the proceeds of the settlement. The lawsuit is captioned United States ex rel. McMakin v. Medisca Inc. (EDTX).  

    The resolution of these matters was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorneys’ Offices for the Eastern District of Texas and the Western District of Texas, with investigative support from the DCIS, U.S. Postal Service Office of Inspector General (USPS OIG) and the Department of Labor.  

    The investigation and resolution of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the FCA. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

    Senior Trial Counsel Sanjay Bhambhani and Trial Attorney John Deck of the Civil Division, Assistant U.S. Attorney Mary Kruger for the Western District of Texas and Assistant U.S. Attorney James Gillingham for the Eastern District of Texas handled the matter, with investigative assistance from Special Agents Nicholas Koechig of DCIS and Timothy Jones of USPS OIG.

    The claims resolved by the settlement are allegations only. There has been no determination of liability.

    Settlement

    MIL Security OSI –

  • MIL-OSI Security: Georgia CPA Sentenced in Syndicated Conservation Easement Tax Scheme

    Source: United States Attorneys General 7

    Defendant Helped Clients File Tax Returns Claiming $14M in False Deductions, Causing Nearly $5M in Loss to the IRS

    A Georgia accountant was sentenced today to 28 months in prison for his role in the promotion and sale of abusive syndicated conservation easement tax shelters.

    According to court documents and statements made in court, Herbert Lewis was a CPA and return preparer at an Atlanta-based accounting firm. Beginning at least in 2014 and through at least 2019, Lewis promoted and sold tax deductions to his wealthy clients in the form of units in illegal syndicated conservation easement tax shelters organized and created by co-defendants Jack Fisher, James Sinnott and others.

    According to court documents and statements made in court, Lewis also knew that, contrary to law, the transactions related to these illegal tax shelters lacked economic substance, that his wealthy clients participated only to obtain a tax deduction and that his clients received only a tax benefit for their participation in the shelters. For example, the scheme entailed the creation of partnerships that would purchase land and land-owning companies and then donate conservation easements over that land or the land itself. A client who purchased units in one of these partnerships had a “vote” ostensibly on what to do with the land the partnership owned. However, Lewis knew that the vote held by the partnership each year was just for optics and that the land invariably would be donated largely as a conservation easement.

    In some cases, in order to make it appear that his clients had joined the partnerships before the date of the conservation easement donation, which was necessary to claim the tax benefits, Lewis also instructed and caused his clients to falsely backdate documents — such as subscription agreements and checks — related to the partnerships. In 2019 alone, Lewis assisted 15 clients with claiming false deductions on their 2018 returns.

    In total, Lewis assisted in the preparation of tax returns that claimed nearly $14 million in false deductions based on backdated documents, causing a tax loss to the IRS of nearly $5 million.   

    Lewis earned over $1 million in commissions for his role in promoting and selling the illegal tax shelters to clients. Lewis also concealed the amount of commissions he had earned from selling units in these shelters by not fully reporting the commissions on his personal returns and instead fraudulently reporting commission income he had earned as income on the tax returns of nominee entities in his children’s names.

    In addition to his prison sentence, U.S. District Court Judge Timothy C. Batten Sr. for the Northern District of Georgia ordered Lewis to serve three years of supervised release and to pay $4,878,990.90 in restitution.

    Nine additional defendants have previously pleaded guilty to criminal conduct related to the syndicated conservation easement tax shelter scheme. These other defendants include appraiser Walter Douglas “Terry” Roberts, accountant Stein Agee, CPA Corey Agee, CPA Ralph Anderson, CPA James Benkoil, CPA Victor Smith, CPA William Tomasello, CPA and attorney Randall Lenz and attorney Vi Bui.

    Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia and IRS Criminal Investigation Chief Guy Ficco made the announcement. They also thanked U.S. Attorney Dena J. King for the Western District of North Carolina for her office’s assistance.

    IRS Criminal Investigation and the U.S. Postal Inspection Service investigated the case.

    Trial Attorneys Richard M. Rolwing, Parker Tobin, Jessica Kraft and Nicholas J. Schilling Jr. of the Justice Department’s Tax Division and Assistant U.S. Attorney Christopher Huber, Deputy Chief of the Complex Frauds Section of the Northern District of Georgia, are prosecuting the case.

    MIL Security OSI –

  • MIL-OSI Security: Jury Convicts San Diego Man in $35 Million Dollar Securities Fraud and COVID-Relief Fraud Scheme

    Source: Office of United States Attorneys

    SAN DIEGO – After an eight-day trial, a federal jury has convicted Denny Thakorbhai Bhakta on all 25 counts of securities fraud, bank fraud and money laundering in connection with a $35 million dollar investment fraud scheme and COVID-relief fraud scheme.

    Bhakta’s uncle, who was swindled out of $4.5 million, testified during the trial that he came to the U.S. as an immigrant, with only a suitcase and $8 in his pocket, and because of the defendant, he “lost everything he had worked for in 57 years in America. Everything.” Bhatka’s fraud scheme targeting numerous victims, including a childhood friend who lost hundreds of thousands of dollars; a friend of his family who lost $1.6 million; a high school classmate and her father who together lost more than $800,000; a cousin who lost $40,000; and an 88-year-old investor who was defrauded out of  $50,000.

    “This sophisticated scheme unraveled after several victims came forward and exposed the fraud,” said U.S. Attorney Tara McGrath. “Many of the victims are people who represent the best of us—hard working, honest Americans who made investments based on a trusted relationship. The jury’s verdict is a resounding affirmation that justice will prevail over deceit.”

    The evidence at trial showed Bhakta solicited investors in his companies Fusion Hotel Management LLC and Fusion Hospitality Corporation (collectively “Fusion”). Between at least 2016 and up to 2021, Bhakta falsely told investors that Fusion routinely acquired discounted blocks of hotel rooms from Hilton, which Fusion then sold to United Airlines and other companies at a higher price for a significant profit. To support these lies, Bhakta provided fabricated bank statements, fake contracts, and profit and loss statements purporting to show millions in revenue and profit. Instead of buying blocks of hotel rooms with investors’ funds, however, Bhakta used the money he obtained from investors for gambling, to make Ponzi-style payments to other investors, and to pay for Bhakta’s personal expenses, including a Mercedez-Benz S-Class and a Porsche 911 Turbo S.

    During the trial, prosecutors introduced evidence that Bhakta was flown into Las Vegas on the Wynn private jet and in just one 7.5-hour gambling binge in 2018, Bhakta lost $1 million at the Wynn Las Vegas. Through casino records, prosecutors demonstrated how Bhakta repeatedly took investors’ money straight to casinos and gambled (and lost) millions of dollars of investor money.

    As prosecutors argued at trial, in 2020, Bhakta doubled down on the fraud. Through the Paycheck Protection Program (“PPP”), Bhakta applied for 18 separate PPP loans totaling $4.4 million. To fraudulently obtain the PPP loans, and unbeknownst to his victim/investors, Bhakta created fake W-2 and other IRS documents and used the names and personally identifying information of his victim-investors to claim them as employees of Fusion and other entities under Bhakta’s control.  Bhakta used the more than $4.4 million he received in PPP loans to keep the Ponzi scheme going and to continue gambling and losing money at casinos.

    Bhakta was remanded into custody after the jury’s verdict. A sentencing hearing is set for January 25, 2025, at 9:00 a.m. in Courtroom 4D.

    This case is being prosecuted by Assistant U.S. Attorneys Kevin Mokhtari and Eric Olah.

    The Securities and Exchange Commission has also take civil action against the defendant.

    DEFENDANTS                                             Case Number 21cr3352-JLS                            

    Denny Thakorbhai Bhakta                             Age: 42                                   San Diego, CA

    SUMMARY OF CHARGES

    Securities Fraud—Title 15, U.S.C. §§ 78j(b), 78ff; Title 17, C.F.R. § 240.10b-5

    Maximum penalty:  Twenty years in prison and $5 million fine

    Bank Fraud—Title 18, U.S.C., Section 1344(2)

    Maximum penalty:  Thirty years in prison and $1 million fine

    Money Laundering– Title 18, U.S.C., Section 1957

    Maximum penalty: Ten years in prison and fine twice the amount of the criminally derived property involved in the transaction

    INVESTIGATING AGENCIES

    Federal Bureau of Investigation

    U.S. Securities and Exchange Commission, Los Angeles Regional Office

    MIL Security OSI –

  • MIL-OSI Security: Madison Man Sentenced to 3 Years for Illegally Possessing a Firearm

    Source: Office of United States Attorneys

    MADISON, WIS. – Timothy M. O’Shea, United States Attorney for the Western District of Wisconsin, announced that Tyez D. D. Boyd, 27, Madison, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 3 years in federal prison for possessing a firearm as a felon. The prison term will be followed by 3 years of supervised release. Boyd pleaded guilty to this charge on August 14, 2024.

    On November 17, 2022, Madison Police Department officers stopped a vehicle in Madison on suspicion that its occupants were engaged in drug trafficking. Officers had intercepted a phone call earlier in the day between the front seat passenger, Davonte King, and a known fentanyl pill dealer setting up a drug deal. Tyez Boyd was a passenger in the rear seat.

    Officers took King out of the vehicle and found he was in possession of fentanyl pills, cocaine, and over $1,000 in cash. Officers also found a loaded Taurus 9mm handgun under the front passenger seat where King had been seated. King is prohibited from legally possessing firearms because of a prior felony conviction.

    Officers searched Boyd after he got out of the vehicle and found a loaded Kahr .45 caliber handgun in his pocket. Boyd is prohibited from legally possessing firearms because of multiple prior felony convictions. At the time of the stop, Boyd was on state probation for two cases, one involving a strangulation conviction and one involving a domestic violence conviction. Boyd also had three open criminal cases at the time, each of which involved acts of violence. Boyd had two active warrants for his arrest as well. His state probation has since been revoked and he was sentenced to 18 months in state prison on January 27, 2023.

    At sentencing, Judge Peterson said Boyd’s possession of a firearm was dangerous by itself, especially when he was carrying it into a dangerous situation with a drug trafficker. Judge Peterson found Boyd’s case was aggravated by his criminal history, which included instances of domestic violence, as well as his history of noncompliance while on supervision. Finally, Judge Peterson said this crime deserved a 4-year sentence but reduced that sentence for time he had already served on his multiple state revocation sentences.

    Co-defendant Davonte King pleaded guilty to possessing fentanyl intended for distribution and possessing a firearm in furtherance of a drug trafficking crime and was sentenced by Judge Peterson on September 5, 2024, to 7 years in federal prison.

    The charges against Boyd and King were the result of an investigation conducted by the U.S. Postal Inspection Service, Drug Enforcement Administration, IRS Criminal Investigations, Wisconsin Department of Justice Division of Criminal Investigation, and Dane County Narcotics Task Force. The ATF Madison Crime Gun Task Force also investigated the case. The task force consists of federal agents from ATF and Task Force Officers (TFOs) from local agencies including the Dane County and Clark County Sheriff’s Offices and the Fitchburg, Madison, Sun Prairie, and La Crosse Police Departments. The Dane County District Attorney’s Office assisted with the investigation. Assistant U.S. Attorney Steven P. Anderson prosecuted this case.

    This case has been brought as part of Project Safe Neighborhoods (PSN), the U.S. Justice Department’s program to reduce violent crime. The PSN approach emphasizes coordination between state and federal prosecutors and all levels of law enforcement to address gun crime, especially felons illegally possessing firearms and ammunition and violent and drug crimes that involve the use of firearms.

    MIL Security OSI –

  • MIL-OSI: Walstreamz Set to Expand its E-commerce Solutions with the Launch of Ecom Private Label, eBay Automation, and TikTok Automation

    Source: GlobeNewswire (MIL-OSI)

    PISCATAWAY, N.J., Nov. 02, 2024 (GLOBE NEWSWIRE) — In the latest record, Walstreamz set to expand its e-commerce solutions with the launch of Ecom Private Label, eBay Automation, and TikTok Automation. The platform designed these services to empower entrepreneurs and individuals seeking to generate consistent returns without the need for constant oversight.

    The platform’s Ecom Private Label service provides a turnkey option for people who want to produce and market their branded goods on well-known e-commerce sites. With this service, clients can concentrate on marketing and sales while Walstreamz sources products, brand the products, and package the products as well.

    Walstreamz manages the entire fulfillment process for its clients. Customers can quickly and easily launch an online business by utilizing Walstreamz’s Ecom Private label services. In addition, Walstreamz’s Ecom Private label service paves the way for its clients to maximize their reach and grow their business to unexpected heights.

    By focusing on the other new e-commerce venture, Walstreamz’s eBay Automation service offers cutting-edge tools and tactics for individuals trying to increase their eBay sales. Order fulfillment, inventory tracking, customer support, and automated listing management are all included in this service. Clients can boost their productivity and volume of sales on eBay by automating these laborious activities. Walstreamz provides exceptional services to its clients, ensuring complete customer satisfaction. The platform also manages their clients’ order fulfillment to listing management, creating opportunities for clients to increase their sales and boost their business.

    Moreover, Walstreamz underscores the enormous potential of TikTok, as a platform for sales and marketing. The platform created a TikTok Automation service that helps to connect clients with this effective marketing and sales tool. With the use of this TikTok Automation service, users may produce interesting content, enhance their profiles, and expand their TikTok following. Clients can increase traffic and revenue to their website or online store by taking advantage of TikTok’s reach and algorithm.

    Consequently, by offering comprehensive solutions, Walsteamz pushes the boundaries towards success and intends to establish a reputable online store. These services enable customers to start their online business fast and simply and include store design, setup, product listing, and marketing.

    About Walstreamz:

    Walstreamz is a technology-driven company dedicated to providing innovative online business solutions. With a focus on passive income and automation, the platform empowers individuals and entrepreneurs to achieve financial freedom and success. Walstreamz is also a renowned service provider offering Shopify done for you, Amazon wholesale automation, and Walmart dropshipping automation.

    The platform’s Amazon FBA automation service offers a comprehensive solution for anyone wishing to sell their goods on Amazon. Product procurement, inventory control, fulfillment, and customer service are all included in this service. On the biggest online marketplace in the world, clients can increase their sales potential by utilizing Amazon’s extensive customer base and effective fulfillment network.

    With Walstreamz’s Walmart Dropshipping automation service, customers may easily sell goods at Walmart without having to keep inventory. This service helps customers reach a wider audience and boost revenues by taking care of order fulfillment, shipping, and product sourcing.

    Visit the brand website Walstreamz.

    Website | Facebook | Instagram

    Media Details
    Person Contact Name: Andrew William
    Webmail: andrewwilliam@walstreamz.com
    Location: 371 Hoes Ln Ste 200, Piscataway, NJ 08854
    Company Name: Walstreamz
    Website: https://walstreamz.com/

    Disclaimer: This content is provided by the sponsor. The statements, views, and opinions expressed in this column are solely those of the content provider. The information shared in this press release is not a solicitation for investment, nor is it intended as investment, financial, or trading advice. It is strongly recommended that you conduct thorough research and consult with a professional financial advisor before making any investment or trading decisions. Please conduct your own research and invest at your own risk.

    The MIL Network –

  • MIL-OSI China: WSTDF 2024: Harnessing science for sustainable future

    Source: China State Council Information Office 2

    Attendees take part in the “Science and Technology for Risk-Informed Sustainable Development” thematic session at the 2024 World Science and Technology Development Forum (WSTDF), in Beijing, Oct. 24, 2024. [Photo courtesy of WSTDF]
    The 2024 World Science and Technology Development Forum (WSTDF) held a thematic session in Beijing on Oct. 24 focused on “Science and Technology for Risk-Informed Sustainable Development.” Leading representatives of policymakers, scholars and private sector took part in the event, discussing how to mobilize science and technology to navigate emerging global risks and build a safer, more inclusive and sustainable future.
    The session was hosted by the Integrated Research on Disaster Risk (IRDR), the International Society for Digital Earth (ISDE) and the International Research Center of Big Data for Sustainable Development Goals (CBAS), and supported by the International Science Council (ISC) and the U.N. Office for Disaster Risk Reduction (UNDRR). Salvatore Arico, CEO of the ISC, and Marco Toscano-Rivalta, head of UNDRR’s Regional Office for Asia and the Pacific, co-chaired the event, and it was co-moderated by IRDR Executive Director Yang Saini and Senior Science Officer Han Qunli.
    Collaboration and shared solutions for global risks
    As climate change accelerates and disaster risks become more complex, the importance of international scientific cooperation grows ever more crucial. Wu Guoxiong, an academician at the Chinese Academy of Sciences (CAS) and a researcher at the CAS Institute of Atmospheric Physics, highlighted the significance of international cooperation in early warnings for disasters. He pointed to the Sub-seasonal to Seasonal (S2S) Prediction Project as a successful model of global collaboration. Countries including China, the United Kingdom, the United States and Japan participate in the project, which allows real-time comparisons of their climate prediction models, improving collective capacity to address climate-related disasters.
    Rajib Shaw, chair of the UNDRR Asia-Pacific Scientific and Technical Advisory Group, emphasized the need for increased global cooperation to bridge technological divides. He noted that technologies such as artificial intelligence and drones are vital for disaster risk reduction, yet many Global South countries lack access to these advanced tools, making the collaboration essential.
    Manon Burger, biochemistry publishing director for Elsevier, underlined the importance of open access to scientific research in fostering global knowledge sharing. “We publish more than 3,000 journals, many of which are available open access, ensuring that researchers worldwide can stay updated on the latest scientific advancements,” Burger said. She also introduced Elsevier Foundation, which has partnered with over 100 institutions in 70 countries since it was established in 2005, offering approximately $16 million in funding for initiatives supporting climate action and inclusive health care. 
    Josephine Ngaira, professor of geography (climatology) in the School of Disaster Management and Humanitarian Assistance at Masinde Muliro University of Science and Technology in Kenya, stressed the need to address the specific challenges of grassroots communities and vulnerable populations in disaster risk management. She advocated for inclusive models that ensure technological benefits reach all levels of society, advancing sustainable development worldwide.
    DRR education and empowerment of young professionals  
    Young people are a driving force behind technological innovation and sustainable development. Shabhaz Khan, director of the UNESCO Regional Office for East Asia, stated that the youth is highly recognized by the United Nations, and can be mobilized and engaged in pilot disaster research activities.
    Salvatore Arico, CEO of the ISC, underscored the importance of interdisciplinary training for young researchers. He pointed out that current education systems often remain siloed within single disciplines, whereas solving complex global issues requires interdisciplinary research and training. He advocated for education reforms to provide young scientists with more diverse learning opportunities and to encourage cross-sector exploration.
    Khamarrul Azahari Razak, director of Malaysia’s Disaster Preparedness and Prevention Center, emphasized the importance of investing in human resources and listening to the voices of young people. Meanwhile, professor Christopher Garimoi Orach from the School of Public Health at Makerere University in Uganda, highlighted the need to strengthen disaster risk management education in developing countries, particularly at the higher education level. He noted that training specialists in disaster risk reduction is crucial for future global risk preparedness.
    Building social resilience through government policies
    In tackling global risks, national policies and government support are the keys. Robert Walker, fellow of the Royal Society of Arts and the Academy of Social Sciences Academy of UK and professor at the University of Oxford, stated that social policy should focus on enhancing social resilience by providing people with a sense of security, thus reducing their anxieties and enabling them to contribute to disaster risk reduction. Walker praised China’s efforts in promoting social security and resilience through advancing common prosperity, poverty reduction and energy transition.
    Salvatore Arico further emphasized that collaboration between governments, communities and scientists is essential for addressing global challenges such as climate change, land degradation and declining water quality. He noted that considering the practical applicability of scientific methods from the beginning of policy design would help enhance implementation effectiveness and ensure technology-driven progress.
    Rajib Shaw called for greater adaptability in governance mechanisms. Given the existing gap between sci-tech advancements and governance structures, he suggested policy adjustments from governments to facilitate adaptive governance, thus ensuing effective application of scientific tools in disaster risk reduction and management.

    MIL OSI China News –

  • MIL-Evening Report: Albanese flags radical changes to student debt – with a 20% overall cut and drop in payment rates

    Source: The Conversation (Au and NZ) – By Andrew Norton, Professor in the Practice of Higher Education Policy, Australian National University

    Taoty/Shutterstock

    Over the weekend, the Albanese government announced radical changes to student loans, which would kick in after the next federal election.

    Three million Australians with student debt could see their balances cut by 20%. The remaining debt would be repaid under a new system, with no compulsory repayments for people earning less than A$67,000 a year. Both changes require parliamentary approval.

    The changes will apply to everyone with a student debt, including all HELP (formerly HECS), vocational education and Australian apprenticeship support loans, as well as other student support loans.

    People with student debt would undoubtedly benefit from the proposed changes. But they come with a hefty price tag and some disadvantages.

    What are the proposed cuts to student debt?

    As of June 30 this year, Australia’s higher education student debt totalled about $75.1 billion – although this is soon set to drop by about $3 billion. Legislation to partially reverse recent indexation to debts will go to the Senate later this month.

    However, staying with the $75 billion, a 20% cut would be about $15 billion.

    Using the government’s figures, someone with the average HELP debt of $27,600 would see around $5,520 cut from their HELP loans next year.

    Vocational education students owed $8.4 billion as of June 30 2024. Their balances would reduce by about $1.7 billion under the changes.

    Based on previous student support loan data, this debt is more than $3 billion. The changes would see it drop by about $600 million.

    These reductions total $17.3 billion compared to the government’s estimate of $16 billion. But the upcoming indexation changes may explain this difference.

    Repayments set to change

    These changes have two important elements: the income at which repayments start and how repayments are calculated.

    These changes come amid a cost-of-living crisis and rising fees for students.

    There was a noted outcry earlier this year when the cost of an arts degree hit $50,000 for 2025.

    No compulsory repayments if you earn under $67,000

    With parliament’s approval, for 2025-26 compulsory repayments on student loans would not start until the debtor was earning $67,000. This is up from about $56,000.

    This would help a significant number of Australians. In 2023-24 more than 400,000 debtors had incomes between $50,000 and $70,000.

    Changes to how repayments are calculated

    Another significant change is to how repayments are calculated. Currently, when a debtor’s income reaches one of 18 income levels they repay a higher percentage, based on all their income.

    This can produce strange results. Take a graduate earning $62,850 a year. They are in the 1% of income repayment rate, so they owe the Australian Taxation Office $628.50 in HELP repayments. But if their income goes up by $1 to $62,851 they enter the 2% repayment bracket, and owe the tax office $1,257. So a $1 pay increase would reduce the graduate’s take home pay by more than $600.

    Under the government’s proposal, repayments would be calculated on income above a threshold, ignoring all income below the first threshold.

    The new system would start with a 15% repayment rate at incomes between $67,000 and $124,999. Income at $125,000 or above would have a 17% repayment rate.

    So, take a graduate on $70,000 a year. Under the current system, they will repay 2.5% of all their income, which is $1,750. Under the proposed system their repayments will be calculated only on the $3,000 difference between $67,000 and $70,000. This means they pay 15% of $3,000 or $450.

    The government says on average, repayments will drop by $680 per individual debtor.

    But those earning $180,000 plus will repay more student debt each year due to the new system. This is not a large group.
    Of the 1.16 million people who made a HELP repayment in 2021-22, all but 16,000 earned less than $180,000.

    The cost of an arts degree is set to reach $50,000 in 2025, amid growing concerns over study costs.
    rongyiquan/Shutterstock

    There are some disadvantages

    The downside of reduced annual repayments is longer repayment periods and more indexation of HELP balances.

    People who want to repay more quickly can make voluntary repayments, which have increased significantly in recent years. But most people take the default option of compulsory repayments only.

    While people who currently hold debt will see their repayment times reduced after the 20% cut to their balance, future borrowers won’t have this benefit.

    Given the pattern of recent announcements, it would not be surprising if the government also announced reduced student contributions for future borrowers.

    But it is also surprising the government has been stalling for two years on the high cost of arts degrees, set to hit almost $17,000 a year next year. These high fees should have been reduced long ago.

    The cost to government

    The 20% reduction in student debt balances will also come at a very significant cost to government and taxpayers.

    This will not be the full $16 billion they have announced, since that includes debt that is not expected to be repaid anyway.

    For higher education debt, the government actuary estimates 24% of the debt outstanding as of June 30 this year will not be repaid. Even so, a 20% cut to the $57.1 billion “good” debt would still cost $11.4 billion.

    Cutting vocational education debt by 20% would add around another $1 billion to the cost, after deducting debt that won’t be repaid. Debts for student income support tend to have high bad debt rates, but the 20% cut for them would also add to the government’s expenditure.

    The government will also incur further costs from slowing down future repayments.

    Is this the best way?

    The last few years have highlighted how stressful and damaging high levels of student debt can be for younger Australians.

    And as Labor looks ahead to the next federal poll, reducing individuals’ debts and repayments could be a useful election selling point.

    However, the Albanese govenrment’s plan comes with a high price tag and the priorities may not be entirely right. Managing future debt, such as by reversing fee hikes under the Job-ready Graduates program, is as important as reducing old debt.

    Andrew Norton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

    – ref. Albanese flags radical changes to student debt – with a 20% overall cut and drop in payment rates – https://theconversation.com/albanese-flags-radical-changes-to-student-debt-with-a-20-overall-cut-and-drop-in-payment-rates-242740

    MIL OSI Analysis – EveningReport.nz –

  • MIL-OSI USA News: Remarks by Vice President Harris in Press Gaggle | Milwaukee,  WI

    Source: The White House

    Pfister Hotel
    Milwaukee, Wisconsin

    THE VICE PRESIDENT:  Hi.  Good morning, everyone.

         Q    Good morning.

    THE VICE PRESIDENT:  Okay.  Well, it’s good to be back in Milwaukee.  We had a wonderful evening last night.  People are enthusiastic, and the road to the White House definitely runs through Milwaukee, and I’m honored to have the support of people here. 

    I’m going to continue to remind people: Go to IWillVote.com to know where you vote and — and how you can vote, in terms of in-person and all of those other details that are very important to exercising the power of your vote in this very critical and important election. 

    I also want to speak to the comments that have been recently made by the speaker of the House.  It is just further evidence of everything that I’ve actually been talking about for months now, about Trump’s intention to implement Project 2025.

    We have talked repeatedly — and the American people know what’s in it.  We’ve talked repeatedly about their intention to get rid of the Affordable Care Act; now to get rid of the CHIPS Act. 

    And let’s talk about manufacturing, which is a critical issue for many of the states that will make the difference in this election.  Donald Trump, when he was president, lost 200,000 manufacturing jobs.  We have created over 700[,000] new manufacturing jobs. 

    It is my plan and intention to continue to invest in American manufacturing, the work being done by American workers, upholding and lifting up good union jobs, which are good-paying jobs, and doing the work of investing in American industries, including our industries of the future. 

    That is the way we are going to win the competition with China for the 21st century, and that is the kind of leadership that America deserves in their president. 

         Q    Madam President, one on — Madam President —

         AIDE:  Mary.  Mary.

         Q    Oh, sorry.

         Q    What’s your message to Milwaukee voters who are saying, you know, Trump might be better for the economy, and we’re hearing that from — including Black men voters who are skeptical that things are just too expensive for them?

    THE VICE PRESIDENT:  Well, first of all, let me make it very clear that I intend to earn the vote of everyone, and I don’t take anyone’s vote for granted, and my highest priority as president will be to bring down the cost because, to that point, look, I know the cost of groceries is too high still, everyone knows it.  And so, my plan includes what we’re going to do in terms of taking on corporate price gouging and having the first-ever national ban on corporate price gouging on groceries. 

    My plan includes addressing the issue of affordable housing, including for first-time homebuyers, giving them a $25,000 down payment assistance so they can just get their foot in the door. 

    My plan includes addressing the needs of parents — in particular, young parents — which is why I will expand the Child Tax Credit to $6,000 for the first year of their child’s life, which helps pay for everything from child care to a crib and a car seat. 

    My plan includes what we’re going to do to invest in our small businesses, including increasing tax breaks for small businesses. 

    And overall, my plan, which is about building an opportunity economy, has been reviewed by leading economists in our country, from Goldman Sachs to 32 Nobel laureates, all whom have said that my economic plan actually will strengthen America’s economy.  They’ve reviewed Donald Trump’s plan and have determined he will weaken America’s economy, he will ignite inflation, and he will bring on a recession by the middle of next year. 

         AIDE:  Akayla.

    Q    Hi, Madam Vice President.  On the comments from the speaker, he walked back initially saying that they would repeal the CHIPS Act, but he still wants to impose changes to the bill.  Are you concerned about Republicans seeking any changes to the CHIPS Act?

    THE VICE PRESIDENT:  Well, let’s be clear why he walked it back: Because it’s not popular, and their agenda is not popular. 

    And that’s why people are showing up by the thousands — tens of thousands to talk about an agenda that actually is focused on lifting them up.  That’s why I have the support of, yes, Democrats and independents and Republicans, because they want a president of the United States who stops playing politics with their lives. 

    They want a president of the United States who invest in affordable health care regardless of who they vote for. 

    They want a president of the United States who invests in American manufacturing and American workers. 

    And that’s the work I will do, and that is the work I’m committed to do, and I’m very proud to have the support of many leaders from every party who understand that that’s the kind of leadership that we need moving forward.

    AIDE:  Asma.

    Q    Thank you.  Madam Vice President, I wanted to ask you about your day-one agenda.  I know you said the other day — you talked about having an executive order that would eliminate college degrees for certain federal jobs. 

    THE VICE PRESIDENT:  Yes.

    Q    Can you tell us about some other day-one priorities?

     THE VICE PRESIDENT:  Absolutely.  Well, it — obviously —

    Q    (Inaudible.)

    THE VICE PRESIDENT:  — there’s more than one.

     Q    Yes.

    THE VICE PRESIDENT:  And one of them is going to be to submit, basically, a package of proposals that are about bringing down costs. 

    So, for example, housing.  What we need to do in terms of creating a tax benefit for folks who want homeownership, what we’re going to do to create a $25,000 down payment assistance plan, what we’re going to do for small businesses.  All of that will require a lot of work. 

    And day one is also me getting on the phone with members of the Republican Party, with leaders, with the private sector.  A lot of my plan includes working with the private sector. 

    My plan includes cutting through red tape on the issue of housing.  Again, that includes working with local and state leaders to cut through the red tape, as well as creating incentives for the private-sector builders and developers to actually build new housing so we can increase supply and bring down the cost. 

         AIDE:  Charles.

         Q    Madam President, thank you —

         THE VICE PRESIDENT:  Vice President.

         Q    — for making this —

         THE VICE PRESIDENT:  Three days.

         Q    Vice President.

         THE VICE PRESIDENT:  But I appreciate that.

         Q    That will go viral, I’m sure.

         Tomorrow, faith leaders in Milwaukee and across the state will be praying about this election —

         THE VICE PRESIDENT:  Yes.

         Q    — and encouraging people to get out and vote. 

         THE VICE PRESIDENT:  Yes.

         Q    I think, last week, I heard you say, “God’s power works through us.” 

         THE VICE PRESIDENT:  Yes.

         Q    What does your faith tell you about who God wants to win this election and lead our divided country?

    THE VICE PRESIDENT:  My faith and my belief in God tells me that we all must think about our lives through our ability to do good works, and through those works, to lift people up, to help the needy, to help the poor, to help the elderly.  And my plan for my presidency is informed with that spirit and that approach.  And I do believe that people understand that that really is the sign of a real leader, which is not defining one’s strength based on who you beat down, but defining the strength of a leader based on who you lift up. 

         AIDE:  Thank you.

         THE VICE PRESIDENT:  Thank you.  Thank you.

                                   END

    MIL OSI USA News –

  • MIL-OSI New Zealand: Release: National’s FamilyBoost a colossal flop

    Source: New Zealand Labour Party

    Nicola Willis continues to over promise and under deliver, with most families receiving only $30 a week from National’s flagship FamilyBoost flop.

    “Only 1,094 households have received the full amount of the FamilyBoost payment,” Labour Finance spokesperson Barbara Edmonds said.

    “This is after Christopher Luxon promised 100,000 families would be eligible for the payment and said $250 was up for grabs in tax cuts. Only 33,000 families have received anything at all, that’s a third of what was promised. Half of those families got roughly $30 a week.

    “We have long known National wants to make it difficult for anyone to get this money – and their efforts are paying off.

    “Receiving this financial help shouldn’t be a bureaucratic nightmare, but under National busy parents have to find invoices or proof of payment from childcare centres and claim back the money themselves from Inland Revenue.

    “Child poverty is projected to increase and unemployment is up under National. Rents and rates are high, and more Kiwis are leaving New Zealand than ever before. This Government is failing families.

    “Nicola Willis can swear she understands the needs of New Zealand families until she’s blue in the face, but when her boss is calling Kiwis ‘customers’, her colleague is calling workers ‘losers’, and she is failing to make life easier for Kiwis who are struggling, the proof is really in her severely lacking pudding,” Barbara Edmonds said.

    Stay in the loop by signing up to our mailing list and following us on Facebook, Instagram, and X.

    MIL OSI New Zealand News –

  • MIL-OSI Australia: Interview with Melissa Clarke, Afternoon Briefing, ABC

    Source: Australian Treasurer

    MELISSA CLARKE:

    But first, a new report shows more than 1,200 companies paid no tax in the past financial year. An annual report from the Australian Taxation Office shows of the nearly 4,000 firms that lodged their returns, around 30 per cent did not pay tax. But the overall amount of corporate tax being paid to the ATO has increased by 17 per cent, which the government says is partly due to a crackdown on tax avoidance, as well as increasing profits by some companies. The Assistant Treasurer and Minister for Financial Services, Stephen Jones, joined me a short time ago. Stephen Jones, thanks for joining us. We see that corporate tax receipts are up 17 per cent under new figures the ATO have released. Is it a case of a tax avoidance crackdown working or is it just that companies are doing particularly well and recording record profits and paying more tax?

    STEPHEN JONES:

    Look, I think the good thing about this is we’re seeing strong compliance. We put about $200 million into a tax compliance taskforce focusing on large businesses and multinationals, and I’m very pleased to see that it’s reaping rewards. Australians want to ensure that whether you’re a big business or a small business, you’re paying your fair share. So, pleased to see that in the numbers today that we’re getting strong revenue coming through. Of course, it’s what pays for Medicare, it’s what pays for defence, it’s what pays for all the services that Australians expect us to deliver for them.

    CLARKE:

    How can we quantify, though, how much of that increased corporate tax revenue for the government is coming because of the tax crackdown, to make sure that they’re not profit shifting or avoiding, how much is due to that compared to just some companies in particular – we know a lot of our large mining companies have just had a really good year of sales.

    JONES:

    Well, frankly, from a bottom line point of view, it doesn’t matter that much. We want to ensure that as we continue to try and balance the budgets. Delivering 2 strong budgets in our first 2 terms of office means that we can do more, and ensuring that we’re getting every dollar that is owed through the taxation system is a key part of that strategy. Australians expect the Albanese government to do that. So, a bit of this, a bit of that, a bit of strong revenue coming through from those traditional sectors like resources and banking and financial services, but also knowing that we’ve got a strong compliance effort going on there as well, to ensure that we’re getting every dollar that is owed to the Australian people.

    CLARKE:

    There’s still something like 1,200 large companies not paying any tax at all. Is that acceptable? Can the crackdown on tax avoidance reach those companies that are not just, you know, rightly perhaps for some of them, not recording paying tax this time of year due to losses or various, various reasons they might not, but likely some of them are still finding ways to move their profits elsewhere.

    JONES:

    If it’s avoidance that’s going on, then it’s not acceptable and we’ll track it down. We’re putting a lot of effort into ensuring that we’re cracking down on tax avoidance, particularly in the area of multinational tax avoidance, working through multilateral organisations, through the OECD, but also here at home, ensuring that we’re getting every dollar that is owed. Big priority for the government, huge priority for the government in that multinational area. And of course, as you say, there’ll be some of those businesses who aren’t paying tax because they’re not making any money, they’re breaking even or they’ve made a huge capital investment and any money they have made is being offset against the capital investments that they’ve made. So, some of that is signs of healthy economic activity, particularly if there’s been a big capital investment. We want that. It’s going to drive productivity, but if it’s avoidance, we’re onto it.

    CLARKE:

    Is it inevitable that there’ll be some level of avoidance so long as Australia has a corporate tax rate of 30 per cent? Is there any value in looking at a lower corporate tax rate in the hope that it might mean there is less accounting shuffling done, and that could actually lead to a better outcome? Or are you convinced the 30 per cent tax rate is the right one to remain at?

    JONES:

    Look, a couple of things to say about that. It’s 30 per cent, that’s the headline rate. But of course, there are a whole range of offsets and allowances that are made, which means the actual rate, the underlying rate, is significantly less than that for most businesses and have used, as you’ve just pointed out, a whole heap of businesses, one‑third of them in today’s report, that aren’t paying any corporate tax at all. So, that’s the first point I’d make. The second point I’d make is Australians expect our businesses, particularly our resources businesses, our banking businesses and the multinational organisations, to be paying their fair share. And if we want to be able to continue to balance our budgets, we’ve got to ensure that whether you’re an individual taxpayer or a corporate taxpayer, you’re paying your fair share.

    CLARKE:

    The Australian Financial Complaints Authority has been reporting of the number of complaints that it is dealing with, and it’s dealing with an order of 900 complaints about scams every month. But it is reporting that does seem to be going down slightly. Why do you think that is?

    JONES:

    Look a sign of success, I’ve got to say. You would be aware, Melissa, that the government’s put a big emphasis on reducing scams and preventing scams. Phase one involved standing up a National Anti‑Scam Centre and pulling down fake investment websites. We’re blocking about a million calls and messages a day, which is a significant uplift in our effort. More legislation coming into parliament in a fortnight to uplift our effort here. So, our strategy is working. There’s no other country in the world that can say they’re having the success that Australia is having, which is why people are now starting to talk about the Australian model for scam prevention. That’s all great, but it doesn’t mean we can rest on our laurels because as soon as we do, the scammers come back, losses go up again and that’s not good enough.

    CLARKE:

    Is this a sign that this is an area that really does need strong government intervention, that the financial institutions can’t be relied upon to do the right thing, to make sure that customers are as protected as they can be and that a government has to step in here?

    JONES:

    Yeah, look, 100 per cent. You know, the approach of our predecessors on this was that if you get scammed out of money, you’re a mug and you’re on your own basically. It was a private problem, not a public problem. We think that’s wrong because scams have been industrialised, but they’ve also, if you don’t get on top of it, people won’t answer phone calls that they don’t recognise, they won’t respond to emails because they think it’s a fraud. They won’t respond to SMS messages because they think they’re bogus. Whether you care about it from the social aspect, which I do, or you understand that it’s actually undermining the rails of modern commerce unless we get on top of it, you should have 2 strong motivations for wanting to do it. And that’s the approach of the Albanese government. This is a public problem, not a private problem and we’ve got to get on top of it. So, we’re really leaning, it is a priority for us. We are leaning into it. We want to ensure that we are the hardest country on earth for a criminal to make a buck through scams.

    CLARKE:

    Well, it’s interesting then to look at some of the other findings of the last financial year from the Financial Complaints Authority, because they also note that complaints about financial institutions dealing with hardship has gone up, and it also is quite critical of a number of insurance companies saying they’re not taking enough of a resolution mindset, that it’s still too adversarial and not doing enough to resolve complaints that people have about those services. Does that then suggest that maybe this is requiring more government intervention with banks and insurers to put more pressure on them to resolve complaints earlier in the process?

    JONES:

    Can I say, in the area of insurance, when somebody’s lost their property because there’s been a fire or a flood or some other tragedy, the last thing they need is to have to be involved in a brawl and a dragged out fight with their insurance company. Prompt payment, prompt resolution, prompt clarification of rights is what is needed. And it’s exactly why I got Dr Daniel Mulino to chair the recent inquiry into insurance claims handling, particularly arising out of the NSW and Queensland floods recently. He’s done a great job. A series of recommendations to both government and industry. We’re going through them now. An excellent report, and you’ll see us implementing a lot of those recommendations as soon as possible. Like, the insurance industry doesn’t have to wait. The message to them is get better. We want to ensure that you’re looking after your customers, and they’re not adding insult to injury after they’ve had their properties wiped out through a flood.

    CLARKE:

    And look, before we let you go, I do want to ask you about the issue that has taken up much time in Canberra this week, of politicians accepting flight upgrades or access to the Chairman’s Lounge from Qantas. Given the risk of the perception of a conflict that this creates, do we need our politicians, yourself included, to perhaps rethink whether or not they should be accepting flight upgrades or a Chairman’s Lounge? Is the declaration process not enough to allay public concern that it might be influencing policy decisions?

    JONES:

    Look, I don’t think it does. Can I first start by saying I don’t think it does influence policy decisions, I’ve read all the stuff, and I’ve watched all the stuff over the last week, and, you know, there’s a lot of strong words that have been said about it. I’m certain that it doesn’t influence policy decisions. You know, should politicians be banned from, you know, upgrades or Qantas lounge? Frankly, I don’t care one way or the other. It’s not a big deal to me. But, yeah, I think Australians are actually focused on, is Medicare working properly? How’s cost of living? Is my job secure? Am I getting a pay rise? Frankly, they’re the issues. I know it’s fascinating in Canberra, and I know there’s a lot of tit‑for‑tat stuff going on here, but I think Australians are really in a different place.

    CLARKE:

    I know you say that you don’t believe that it creates any influence on policy decisions, but it can create the perception that there could be, and we know that that’s important when it comes to transparency and accountability. So, given the perception issue and given that we have had things like the decision to not grant Qatar extra, you know, slots coming into major airports, which, you know, at the time you said was to help keep Qantas viable and competitive, would there not be some value in reassessing that issue of perception that might remain even if the policy influence isn’t affected?

    JONES:

    You know, I think we’ve got to continually assess these things to ensure that we are keeping pace with community expectations. I actually don’t think it makes a difference. Both Qantas and Virgin have the same sorts of lounges. I think Rex does as well. Like, I don’t think it’s exceptional. When I’ve been into any of them, you’ll see sports people, you’ll see business people. Yes. You’ll see politicians, you know, so there’s – frankly, I don’t think it changes the way people make a decision either way. All of the airlines have these facilities available to them, so it’s not like people are making a pro‑Qantas or an anti‑Qantas decision, depending on which door they walk through. I just don’t think that happens. But I do accept your point, frankly, around perceptions, I’m not sure where it ends. But I do accept your point that, you know, that we’ve got to ensure that we’re continually reviewing behaviours and arrangements to keep place with community norms.

    CLARKE:

    Alright. Something I think we’ll keep assessing and perhaps perpetually keep assessing. Stephen Jones, thanks very much.

    JONES:

    Good to be with you.

    MIL OSI News –

  • MIL-OSI Canada: Minister Valdez wraps up activities to celebrate Small Business Month and highlights government supports for entrepreneurs

    Source: Government of Canada News (2)

    News release

    November 1, 2024 – Ottawa, Ontario

    The Honourable Rechie Valdez, Minister of Small Business, celebrated Small Business Month (SBM) by meeting with local entrepreneurs and business organizations to highlight the federal government supports that are available to help them thrive.

    Minister Valdez kicked off October by announcing that the federal government has negotiated lower credit card interchange fees by up to 27% for small businesses across Canada. These lower fees for Visa and Mastercard took effect on October 19, 2024. Minister Valdez also announced that the Canada Carbon Rebate will be distributing $2.5 billion to about 600,000 small and medium-sized businesses across Canada where the federal fuel charge applies. The amount is dependent on a business’ number of employees. For example, Ontarian small businesses will receive $401 per employee. Small and medium-sized businesses that filed their taxes before July 15 will receive an automatic payment by the end of this year.

    Throughout SBM, Minister Valdez met with small business owners across the country. She also engaged with diverse groups of entrepreneurs at the Mississauga Board of Trade, the CanadianSME Magazine Small Business Summit, the Casa Foundation for International Development’s Friends of Africa summit, the Elevate Festival, the Alliance of Nigerian Entrepreneurs gathering, the RPA Women Entrepreneur Awards Gala, the Federation of African Canadian Economics’ Small Business Sunday event, the Toronto Small Business Forum, and the Misfit Ventures Misfits Unleashed event.

    During these engagements, Minister Valdez highlighted the federal government’s groundbreaking investments—through programs like the 2SLGBTQI+ Entrepreneurship Program, the Women Entrepreneurship Strategy and the Black Entrepreneurship Program—that are helping fight the systemic barriers under-represented entrepreneurs face. She also spotlighted federal government investments in inclusive venture capital and Futurpreneur, as well as support for Indigenous entrepreneurs.

    Minister Valdez also updated entrepreneurs on federal investments to help small businesses adopt digital tools and innovations, including the $2.4 billion committed in Budget 2024 to secure Canada’s artificial intelligence (AI) advantage. This includes $200 million in the Regional Artificial Intelligence Initiative, which will help bring new AI technologies to market and accelerate AI adoption by small businesses across the country. She also mentioned the Canada Digital Adoption Program, which has helped more than 60,000 small businesses improve their digital capabilities and adopt e-commerce platforms.

    The Minister wrapped up her SBM-related activities on October 30 by announcing a new partnership between the First Nations Health Authority and the CAN Health Network that will help over 200 First Nations communities across British Columbia access health care innovations from Canadian start-ups. Start-ups in the health care sector have expressed that they face unique challenges breaking into the new market and increasing uptake of their technologies. The federal government’s investment in the CAN Health Network is connecting innovative health care providers with promising start-ups that are offering made-in-Canada solutions to meet their unique needs and challenges.

    Quotes

    “Small businesses are the heart of our communities and the backbone of our economy, employing nearly 8 million hard-working Canadians. It was incredible to spend Small Business Month celebrating their invaluable contributions and meeting key organizations that are dedicated to helping entrepreneurs thrive. Our government will continue to have the backs of small businesses from coast to coast to coast, whether they’re just starting out, looking to grow or striving to extend their reach into new markets.”
    – The Honourable Rechie Valdez, Minister of Small Business 

    Quick facts

    • The Canada Carbon Rebate for Small Businesses is a refundable tax credit to return a portion of federal fuel charge proceeds directly to eligible businesses.

      • Businesses will not have to apply for this rebate. The Canada Revenue Agency will determine and automatically issue the rebate amounts for eligible businesses based on the payment rates of each applicable province for the corresponding fuel charge years, as specified by the Minister of Finance.
      • The rebate will be available to eligible Canadian-controlled private corporations that had 499 or fewer employees in Canada throughout the calendar year in which the applicable fuel charge year began.
      • The federal fuel charge currently applies in the provinces of Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island and Saskatchewan. The Government of Canada does not keep any direct proceeds from pollution pricing. All direct fuel charge proceeds are returned in the province or territory of origin.

    • The Code of Conduct for the Payment Card Industry in Canada was first released in 2010 and was last updated in 2015.

      • All major payment card network operators in Canada incorporate the code into their rules, making it binding on all their network participants: issuers, acquirers and payment processors.
      • More than 1 million businesses that accept payment cards in Canada will benefit from the code revisions. In 2023, these businesses accepted approximately 14.1 billion card payments worth $1.2 trillion.
      • The increased transparency and disclosure elements of the revised code require payment processors to notify eligible businesses if network fee reductions will not be passed on in full. Additionally, payment processors must remind those businesses of their right to terminate their contract, enabling them to switch to a processor that passes on the benefits of rate reductions.
      • Under the existing code, businesses have the right to exit their contracts without penalty if they do not receive the full benefits of certain network fee decreases, such as the upcoming small business interchange reductions. But businesses have not always been aware of this right.

    • Businesses pay fees to process credit card transactions, with the largest component being the interchange fee paid to credit card–issuing financial institutions, such as banks. The federal government has finalized agreements to lower these fees for small businesses starting on October 19, 2024. Visa and Mastercard have agreed to:

      • reduce domestic consumer credit interchange fees for in-store transactions to an annual weighted average interchange rate of 0.95%
      • reduce domestic consumer credit interchange fees for online transactions by 10 basis points, resulting in reductions of up to 7%
      • provide free access to online fraud and cybersecurity resources to help small businesses grow their online sales while preventing fraud and chargebacks
      • allow small businesses to qualify with each credit card network individually

    • Small businesses with an annual Visa sales volume below $300,000 will qualify for the lower interchange fees from Visa, and those with an annual Mastercard sales volume below $175,000 will qualify for the lower fees from Mastercard.

    • Non-profit organizations with transaction volumes below these thresholds will also benefit from reduced rates.

    Contacts

    Callie Franson
    Senior Communications Advisor and Issues Manager
    Office of the Minister of Small Business
    callie.franson@ised-isde.gc.ca

    Media Relations
    Innovation, Science and Economic Development Canada
    media@ised-isde.gc.ca

    Stay connected

    Follow Canada Business on social media.
    X (Twitter): @canadabusiness | Facebook: Canada Business | Instagram: @cdnbusiness

    For easy access to government programs for businesses, download the Canada Business app.

    MIL OSI Canada News –

  • MIL-OSI USA: Scott Statement on the October Jobs Report

    Source: United States House of Representatives – Congressman Bobby Scott (3rd District of Virginia)

    Headline: Scott Statement on the October Jobs Report

    As originally released by the Committee on Education and the Workforce, Democrats

    WASHINGTON –Ranking Member Robert C. “Bobby” Scott (VA-03) released the following statement after the Bureau of Labor Statistics announced that the economy added 12,000 jobs in October, and the unemployment rate remained unchanged at 4.1 percent. To date, President Biden is the first President on record without a month of job loss in the seasonally adjusted data. Every other administration has seen at least one month of job loss.

    “Without question, Americans are better off today, then they were four years ago. Since President Biden took office, the economy has added 16.1 million jobs, inflation has fallen to 2.4 percent over the year, and wages continue to grow, particularly among low-wage workers. Four years ago, the economy was in freefall, Americans were hoarding toilet paper and standing in line at foodbanks. President Trump was on track to achieve the worst job performance in modern history, and the unemployment rate was 6.8 percent, compared to today’s rate of 4.1 percent.

    “The contrast between the records of this administration and the prior administration could not be starker. For example, President Trump is the first president in nearly 100 years to have lost more jobs than he created during his time in office. During President Trump’s tenure, ten months of which he spent mismanaging the COVID-19 pandemic, the economy lost 2.7 million jobs. During President Biden’s time in office, nearly two years of which were spent recovering from the COVID-19 pandemic, the economy has added 16.1 million jobs. That is more jobs than any President has created in four years.

    “The Biden-Harris Administration’s responsible stewardship of the economy and investment in workers has paid off. In the past four years, Democrats ensured working people were not left behind during this country’s economic recovery. But the work is not over. Despite the resilience of the economy, there is more that can be done to lower costs, whether at the grocery store, the pharmacy counter, or when buying a home. Democrats are offering proposals to end price gouging, lower prescription drug costs, expand homeownership, increase the Pell Grant, and lower the cost of childcare, among many other priorities. Moreover, to help families make ends meet, Democrats are proposing to expand the Child Tax Credit, which would provide as much as $300 per month per child.

    “As we look ahead, we remain steadfast in our commitment to safeguarding the rights of workers and fostering an economy that works for everyone. Together with the Biden-Harris Administration and my colleagues in Congress, we will continue to champion policies that empower working families and drive sustainable growth. The path forward is one of opportunity, equity, and shared success for all.”

    MIL OSI USA News –

  • MIL-OSI: First National Corporation Reports Third Quarter 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    STRASBURG, Va., Nov. 01, 2024 (GLOBE NEWSWIRE) — First National Corporation (the “Company” or “First National”) (NASDAQ: FXNC), reported unaudited consolidated net income of $2.2 million and basic and diluted earnings per common share of $0.36 for the third quarter of 2024 and adjusted net income(1) of $2.4 million and adjusted basic and diluted earnings per common share(1) of $0.39.

    (Dollars in thousands, except earnings per share)   Three Months Ended  
        Sept 30, 2024     Jun 30, 2024     Sept 30, 2023  
    Net income   $ 2,248     $ 2,442     $ 3,121  
    Basic and diluted earnings per share   $ 0.36     $ 0.39     $ 0.50  
    Return on average assets     0.62 %     0.68 %     0.91 %
    Return on average equity     7.28 %     8.31 %     10.96 %
                             
    Non-GAAP Measures:                        
    Adjusted net income(1)   $ 2,448     $ 3,008     $ 3,121  
    Adjusted basic and diluted earnings per share(1)   $ 0.39     $ 0.48     $ 0.50  
    Adjusted return on average assets(1)     0.67 %     0.84 %     0.91 %
    Adjusted return on average equity(1)     7.93 %     10.23 %     10.96 %
    Adjusted pre-provision, pre-tax earnings(1)   $ 4,712     $ 4,092     $ 3,952  
    Adjusted pre-provision, pre-tax return on average assets(1)     1.29 %     1.14 %     1.16 %
    Net interest margin(1)     3.43 %     3.40 %     3.35 %
    Efficiency ratio(1)     67.95 %     70.65 %     70.67 %

    *See “Non-GAAP Financial Measures” and “Non-GAAP Reconciliations” for additional information and detailed calculations of adjustments.

    “During the third quarter the company saw continued improvement in net interest margin thanks to proactive deposit pricing boosted by sticky noninterest-bearing deposits continuing to represent 31% of total deposits,” said Scott C. Harvard, President and CEO. “We also benefited from a 16% increase in ATM and check card fees and an 8% increase in wealth management fees in the quarter. During the quarter loans acquired from third party lenders continued to be a drag on what otherwise was excellent financial performance, with an adjusted pre-provision, pre-tax return on average assets of 1.29% for the period. We continue to be excited about the recent acquisition of Touchstone Bankshares, Inc., which closed on October 1, and look forward to integrating our two companies and building value for our shareholders.”

    THIRD QUARTER HIGHLIGHTS

    Key highlights of the three months ending September 30, 2024, are as follows. Comparisons are to the three-month period ending June 30, 2024, unless otherwise stated:

      ● Net interest margin(1) continued to improve to 3.43%
      ● Loan balances increased by 2%, annualized
      ● Noninterest-bearing deposits were stable at 31% of total deposits
      ● Noninterest income increased by 19%
      ● Adjusted ROA and ROE(1) of 0.67% and 7.93% respectively
      ● Tangible book value per share(1) increased to $19.37 from $17.38 one year ago


    MERGER WITH TOUCHSTONE BANKSHARES, INC.

    The Company completed the acquisition of Touchstone Bankshares, Inc. (“Touchstone”) with and into the Company, effective October 1, 2024 (the “Merger”). Immediately following the Merger, Touchstone Bank, the wholly owned subsidiary of Touchstone, was merged with and into First Bank. Pursuant to the previously announced terms of the Merger, each outstanding share of Touchstone common stock and preferred stock (on an as-converted, one-for-one basis, which shares of preferred stock converted automatically to common stock at the effective time of the Merger) received 0.8122 shares of the Company’s common stock.

    Following the Merger, the former branches of Touchstone Bank assumed in the Merger continued to operate in Virginia as Touchstone Bank, a division of First Bank, and, in North Carolina, as Touchstone Bank, a division of First Bank, Strasburg, Virginia, until the systems integration is completed in February 2025. With the addition of Touchstone, the Company would have had approximately $2.1 billion in assets, $1.5 billion in loans and $1.8 billion in deposits on a combined pro-forma basis as of September 30, 2024. The combined company delivers banking services through thirty-three branch offices in Virginia and North Carolina and three loan production offices, in addition to its full complement of online banking services. During the third quarter of 2024, the Company incurred pre-tax merger costs of approximately $219 thousand related to the Merger. Effective October 1, 2024, common stock outstanding of First National Corporation totaled 8,970,345.

    NET INTEREST INCOME

    Net interest income increased $255 thousand, or 2%, to $11.7 million for the third quarter of 2024 compared to the second quarter of 2024. Total interest income increased by $389 thousand, or 2%, and was partially offset by a $134 thousand, or 2%, increase in total interest expense. The net interest margin(1) increased to 3.43%, up from 3.40% for the second quarter.

    The $389 thousand increase in total interest income was attributable to a $475 thousand increase in interest and fees on loans, which was partially offset by a $43 thousand decrease in interest income on securities and a $41 thousand decrease in interest on deposits in banks. The increase in interest and fees on loans was attributable to a 9-basis point increase in the yield on the loan portfolio and a $9.2 million increase in the average balance of loans. The decrease in interest income on deposits in other banks was attributable to a $2.9 million decrease in average balances. The decrease in interest income on securities was attributable to a $1.7 million decrease in the average balance of total securities and an 8-basis point decrease in yield. The yield on total earning assets increased to 5.08% from 5.03% in the second quarter.

    The $134 thousand increase in total interest expense was primarily attributable to a $138 thousand increase in interest expense on deposits. The increase in interest expense on deposits resulted from a $933 thousand increase in the average balance of interest-bearing deposits and a 4-basis point increase in cost. The total cost of funds was 1.72% for the third quarter of 2024, which was a 3-basis point increase compared to the second quarter of 2024.
      
    NONINTEREST INCOME

    Noninterest income totaled $3.2 million for the third quarter of 2024, which was a $517 thousand, or 19%, increase from the second quarter of 2024 and was attributable to increases in all income categories. ATM and check card fees and fees for other customer services increased $125 thousand and $98 thousand, respectively. There were also increases in wealth management fees, service charges on deposit accounts, and brokered mortgage fees of $73 thousand, $63 thousand, and $60 thousand, respectively.

    NONINTEREST EXPENSE

    Noninterest expense totaled $10.5 million for the third quarter of 2024, which was a decrease of $200 thousand, or 2%, compared to the second quarter of 2024. The decrease was primarily attributable to a $528 thousand decrease in legal and professional fees, which was a result of lower merger-related expenses in the third quarter compared to the prior period. Merger expenses totaled $219 thousand for the third quarter of 2024 compared to $571 thousand in the second quarter of 2024.

    ASSET QUALITY

    Overview

    Loans that were past due greater than 30 days and still accruing interest as a percentage of total loans were 0.24% on September 30, 2024, 0.24% on June 30, 2024, and 0.18% on September 30, 2023. Nonperforming assets (“NPAs”) as a percentage of total assets decreased to 0.41% on September 30, 2024, compared to 0.59% on June 30, 2024, and increased from 0.23% on September 30, 2023. Annualized net charge-offs as a percentage of total loans were 0.63% for the third quarter of 2024, 0.19% for the second quarter of 2024 and 0.03% for the third quarter of 2023. The allowance for credit losses on loans totaled $12.7 million, or 1.28% of total loans on September 30, 2024, $12.6 million, or 1.27% of total loans on June 30, 2024, and $8.9 million, or 0.93% of total loans on September 30, 2023.

    Past Due Loans

    Loans past due greater than 30 days and still accruing interest totaled $2.4 million on September 30, 2024, $2.4 million on June 30, 2024, and $1.8 million on September 30, 2023. There were no loans greater than 90 days past due and still accruing on September 30, 2024 and June 30, 2024, compared to $370 thousand on September 30, 2023.

    Nonperforming Assets

    NPAs decreased to $6.0 million on September 30, 2024 from $8.5 million on June 30, 2024. NPA’s totaled $3.1 million on September 30, 2023. NPA’s represented 0.41%, 0.59%, and 0.23% of total assets, respectively. The NPAs were primarily comprised of commercial and industrial loans.

    Net Charge-offs

    Net charge-offs totaled $1.6 million for the third quarter of 2024, $482 thousand for the second quarter of 2024, and $83 thousand for the third quarter of 2023.

    Provision for Credit Losses

    The provision for credit losses totaled $1.7 million for the third quarter of 2024, $400 thousand for the second quarter of 2024, and $100 thousand in the third quarter of 2023. The provision in the third quarter of 2024 was comprised of a $1.7 million provision for credit losses on loans, a $5 thousand recovery of credit losses on held-to-maturity securities, and a $17 thousand recovery of credit losses on unfunded commitments. The provision for credit losses on loans in the third quarter of 2024 was primarily attributable to increases in specific reserves on commercial and industrial loans and an increase in the general reserve component of the allowance for credit losses on loans related to an increase in projected losses, which resulted from a higher projected unemployment rate when compared to the prior quarterly period.

    Allowance for Credit Losses on Loans

    The allowance for credit losses on loans totaled $12.7 million on September 30, 2024, $12.6 million on June 30, 2024, and $8.9 million on September 30, 2023. During the third quarter of 2024, the specific reserve component of the allowance decreased by $373 thousand, while the general reserve component of the allowance increased by $524 thousand. Net charge-offs increased in the third quarter and were primarily comprised of commercial and industrial loans with specific reserves that were established in prior periods.

    The following table provides the changes in the allowance for credit losses on loans for the three-month periods ended (dollars in thousands):

        Sept 30, 2024     Jun 30, 2024     Sept 30, 2023  
    Allowance for credit losses on loans, beginning of period   $ 12,553     $ 12,603     $ 8,858  
    Net charge-offs     (1,572 )     (482 )     (83 )
    Provision for credit losses on loans     1,723       432       121  
    Allowance for credit losses on loans, end of period   $ 12,704     $ 12,553     $ 8,896  

    The allowance for credit losses on loans as a percentage of total loans totaled 1.28% on September 30, 2024, 1.27% on June 30, 2024, and 0.93% on September 30, 2023.

     Allowance for Credit Losses on Unfunded Commitments

    The allowance for credit losses on unfunded commitments totaled $370 thousand on September 30, 2024, $387 thousand on June 30, 2024 and $189 on September 30, 2023. There was a $17 thousand recovery of credit losses on unfunded commitments in the third quarter of 2024, a $26 thousand recovery of credit losses on unfunded commitments in the second quarter of 2024, and an $8 thousand recovery of credit losses on unfunded commitments in the third quarter of 2023.

    Allowance for Credit Losses on Securities 

    The allowance for credit losses on securities held-to-maturity (“HTM”) totaled $105 thousand on September 30, 2024, compared to $110 thousand on June 30, 2024, and $131 thousand on September 30, 2023. The recovery of credit losses on securities totaled $5 thousand for the third quarter of 2024, $7 thousand for the second quarter of 2024 and $12 thousand for the third quarter of 2023.

    LIQUIDITY

    Liquidity sources available to the Bank, including interest-bearing deposits in banks, unpledged securities available for sale, at fair value, unpledged securities held-to-maturity, at par, that were eligible to be pledged to the Federal Reserve Bank through its Bank Term Funding Program, and available lines of credit totaled $499.1 million on September 30, 2024, $533.3 million on June 30, 2024, and $532.1 million on September 30, 2023.

    The Bank maintains liquidity to fund loan growth and to meet potential demand from deposit customers. The estimated amount of uninsured customer deposits totaled $400.1 million on September 30, 2024, $419.4 million on June 30, 2024, and $346.9 million on September 30, 2023. Excluding municipal deposits, the estimated amount of uninsured customer deposits totaled $322.6 million on September 30, 2024, $324.6 million on June 30, 2024, and $268.4 million on September 30, 2023.

    BALANCE SHEET

    Assets totaled $1.5 billion on September 30, 2024, which was a $6.8 million, or 2% (annualized), decrease from June 30, 2024, and an $84.8 million, or 6%, increase from September 30, 2023. The decrease in total assets from the second quarter of 2024 was primarily due to a $9.1 million decrease in cash and cash equivalents and a $2.2 million decrease in other assets, which was partially offset by a $4.6 million increase in loans, net of allowance for credit losses. Total assets increased from September 30, 2023 primarily from a $76.4 million increase in cash and cash equivalents and a $38.4 million increase in loans, net of the allowance for credit losses on loans, which were partially offset by a $28.5 million decrease in securities held to maturity.

    On September 30, 2024, loans totaled $994.7 million, an increase of $4.7 million or 1.9% (annualized) from $990.0 million, on June 30, 2024. Quarterly average loans totaled $991.2 million, an increase of $9.2 million or 3.8% (annualized) from the second quarter of 2024. On September 30, 2024, loans increased $42.2 million, or 4%, from one year ago, and quarterly average loans increased $68.2 million, or 7%, when comparing the third quarter of 2024 to the same period in 2023.

    On September 30, 2024, securities totaled $269.6 million, a decrease of $875 thousand from June 30, 2024, and a decrease of $30.7 million from September 30, 2023. AFS securities totaled $146.0 million on September 30, 2024, $144.8 million on June 30, 2024, and $148.2 million on September 30, 2023. On September 30, 2024, total net unrealized losses on the AFS securities portfolio were $17.3 million, a decrease of $4.6 million from total net unrealized losses on AFS securities of $21.9 million on June 30, 2024. HTM securities are carried at cost and totaled $121.5 million on September 30, 2024, $123.6 million on June 30, 2024, and $150.0 million on September 30, 2023, and had net unrealized losses of $7.8 million on September 30, 2024, a decrease of $3.6 million compared to the prior quarter.

    On September 30, 2024, total deposits were $1.3 billion, a decrease of $12.5 million or approximately 4% (annualized) from June 30, 2024. Quarterly average deposits decreased from the second quarter of 2024 by $5.3 million or 2% (annualized). Total deposits increased $18.1 million or 1% from September 30, 2023, and quarterly average deposits for the third quarter of 2024 increased $31.2 million or 3% from the third quarter of 2023. Total deposits decreased from the prior quarter due to a $14.4 million decrease in noninterest-bearing deposits and a $1.3 million decrease in interest-bearing demand deposits, which were partially offset by a $3.1 million increase in time deposits.

    On September 30, 2024 and June 30, 2024, other borrowings totaled $50.0 million and were comprised of funds borrowed from the Federal Reserve Bank through their Bank Term Funding Program. On September 30, 2024, other borrowings had a fixed interest rate of 4.76% and a maturity date of January 15, 2025. The Bank benefited from the borrowings with a reduction in interest rate risk and an increase in net interest income. There were no other borrowings on September 30, 2023.

    The following table provides capital ratios at the periods ended:

        Sept 30, 2024     Jun 30, 2024     Sept 30, 2023  
    Total capital ratio(2)     14.29 %     14.13 %     14.80 %
    Tier 1 capital ratio(2)     13.04 %     12.88 %     13.86 %
    Common equity Tier 1 capital ratio(2)     13.04 %     12.88 %     13.86 %
    Leverage ratio(2)     9.23 %     9.17 %     9.96 %
    Common equity to total assets(3)     8.62 %     8.23 %     8.20 %
    Tangible common equity to tangible assets(1)(3)     8.43 %     8.03 %     8.00 %

    During the third quarter of 2024, the Company declared and paid cash dividends of $0.15 per common share, which was consistent with the second quarter of 2024 and the third quarter of 2023. 

    NON-GAAP FINANCIAL MEASURES

    In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures that the Company’s management believes provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. The non-GAAP financial measures presented in this document include adjusted net income, adjusted basic and diluted earnings per share, adjusted return on average assets, adjusted return on average equity, pre-provision pre-tax earnings, adjusted pre-provision pre-tax earnings, fully taxable equivalent interest income, the net interest margin, the efficiency ratio, tangible book value per share, and tangible common equity to tangible assets.

    The Company believes certain non-GAAP financial measures enhance the understanding of its business, performance and financial position. Non-GAAP financial measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure is included at the end of this release.

    ABOUT FIRST NATIONAL CORPORATION

    First National Corporation (NASDAQ: FXNC) is the parent company and bank holding company of First Bank (the “Bank”), a community bank that first opened for business in 1907 in Strasburg, Virginia. The Bank offers loan and deposit products and services through its website, www.fbvirginia.com, its mobile banking platform, a network of ATMs located throughout its market area, three loan production offices, a customer service center in a retirement community, and thirty-three bank branch office locations located throughout the Shenandoah Valley, the Roanoke Valley, the central and south-central regions of Virginia, the city of Richmond, and in northern North Carolina. In addition to providing traditional banking services, the Bank operates a wealth management division under the name First Bank Wealth Management. The Bank also owns First Bank Financial Services, Inc., which owns an interest in an entity that provides title insurance services.

     FORWARD-LOOKING STATEMENTS

    Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company’s plans, objectives, expectations and intentions and other statements that are not historical facts, and other statements identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” and “projects,” as well as similar expression. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties. For details on factors that could affect expectations, future events, or results, see the risk factors and other cautionary language included in First National’s Annual Report on Form 10-K for the year ended December 31, 2023, and most recent Quarterly Report on Form 10-Q and other filings with the Securities and Exchange Commission (the “SEC”).

    Additional risks and uncertainties may include, but are not limited to: (1) the risk that the cost savings and any revenue synergies from the Merger may not be realized or take longer than anticipated to be realized, including due to the state of the economy or other competitive factors in the areas in which the parties operate, (2) disruption from the Merger of customer, supplier, employee or other business partner relationships, including diversion of management’s attention from ongoing business operations and opportunities due to the Merger, (3) the possibility that the costs, fees, expenses and charges related to the Merger may be greater than anticipated, (4) reputational risk and the reaction of each of the parties’ customers, suppliers, employees or other business partners to the Merger, (5) the risks relating to the integration of Touchstone’s operations into the operations of First National, including the risk that such integration will be materially delayed or will be more costly or difficult than expected, (6) the risk of expansion into new geographic or product markets, (7) the dilution caused by First National’s issuance of additional shares of its common stock in the Merger, and (8) general competitive, economic, political and market conditions. All subsequent written and oral forward-looking statements concerning First National or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. First National does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

    CONTACTS

    Scott C. Harvard   M. Shane Bell
    President and CEO   Executive Vice President and CFO
    (540) 465-9121   (540) 465-9121
    sharvard@fbvirginia.com   sbell@fbvirginia.com

      
    FIRST NATIONAL CORPORATION
    Performance Summary
    (in thousands, except share and per share data)
    (unaudited)

          As of or For the Three Months Ended     As of or For the Nine Months Ended  
        Sept 30, 2024     Jun 30, 2024     Sept 30, 2023     Sept 30, 2024     Sept 30, 2023  
    Income Statement                                        
    Interest and dividend income                                        
    Interest and fees on loans   $ 14,479     $ 14,004     $ 12,640     $ 41,967     $ 36,038  
    Interest on deposits in banks     1,538       1,579       338       4,405       1,441  
    Taxable interest on securities     1,091       1,134       1,323       3,449       3,968  
    Tax-exempt interest on securities     303       306       304       914       917  
    Dividends     33       32       26       98       81  
    Total interest and dividend income   $ 17,444     $ 17,055     $ 14,631     $ 50,833     $ 42,445  
    Interest expense                                        
    Interest on deposits   $ 4,958     $ 4,820     $ 3,810     $ 14,549     $ 9,428  
    Interest on subordinated debt     69       69       69       207       207  
    Interest on junior subordinated debt     68       66       69       202       203  
    Interest on other borrowings     600       606       —       1,782       3  
    Total interest expense   $ 5,695     $ 5,561     $ 3,948     $ 16,740     $ 9,841  
    Net interest income   $ 11,749     $ 11,494     $ 10,683     $ 34,093     $ 32,604  
    Provision for credit losses     1,700       400       100       3,100       200  
    Net interest income after provision for credit losses   $ 10,049     $ 11,094     $ 10,583     $ 30,993     $ 32,404  
    Noninterest income                                        
    Service charges on deposit accounts   $ 675     $ 612     $ 733     $ 1,941     $ 2,062  
    ATM and check card fees     934       809       976       2,513       2,624  
    Wealth management fees     952       879       811       2,714       2,336  
    Fees for other customer services     276       178       122       649       538  
    Brokered mortgage fees     92       32       38       162       73  
    Income from bank owned life insurance     191       149       175       491       459  
    Net gains on securities available for sale     39       —       —       39       —  
    Other operating income     44       27       198       1,427       623  
    Total noninterest income   $ 3,203     $ 2,686     $ 3,053     $ 9,936     $ 8,715  
    Noninterest expense                                        
    Salaries and employee benefits   $ 5,927     $ 5,839     $ 5,505     $ 17,637     $ 16,040  
    Occupancy     585       548       534       1,668       1,586  
    Equipment     726       691       598       2,008       1,756  
    Marketing     262       273       204       730       720  
    Supplies     123       115       128       354       423  
    Legal and professional fees     596       1,124       439       2,172       1,204  
    ATM and check card expense     394       368       440       1,123       1,265  
    FDIC assessment     195       203       161       575       479  
    Bank franchise tax     262       261       262       785       778  
    Data processing expense     290       163       266       699       720  
    Amortization expense     4       5       5       13       14  
    Other real estate owned expense (income), net     10       —       15       10       (201 )
    Net losses on disposal of premises and equipment     2       —       —       50       —  
    Other operating expense     1,083       1,069       1,227       3,181       3,358  
    Total noninterest expense   $ 10,459     $ 10,659     $ 9,784     $ 31,005     $ 28,142  
    Income before income taxes   $ 2,793     $ 3,121     $ 3,852     $ 9,924     $ 12,977  
    Income tax expense     545       679       731       2,025       2,502  
    Net income   $ 2,248     $ 2,442     $ 3,121     $ 7,899     $ 10,475  

      
    FIRST NATIONAL CORPORATION
    Performance Summary
    (in thousands, except share and per share data)
    (unaudited)

          For the Three Months Ended       For the Nine Months Ended  
        Sept 30, 2024     Jun 30, 2024     Sept 30, 2023     Sept 30, 2024     Sept 30, 2023  
    Common Share and Per Common Share Data                                        
    Earnings per common share, basic   $ 0.36     $ 0.39     $ 0.50     $ 1.26     $ 1.67  
    Adjusted earnings per common share, basic (1)   $ 0.39       0.48       0.50     $ 1.38     $ 1.67  
    Weighted average shares, basic     6,287,997       6,278,113       6,256,663       6,278,668       6,266,707  
    Earnings per common share, diluted   $ 0.36     $ 0.39     $ 0.50     $ 1.26     $ 1.67  
    Adjusted earnings per common share, diluted (1)   $ 0.39       0.48       0.50     $ 1.38     $ 1.67  
    Weighted average shares, diluted     6,303,282       6,289,405       6,271,351       6,291,775       6,276,502  
    Shares outstanding at period end     6,296,705       6,280,406       6,260,934       6,296,705       6,260,934  
    Tangible book value per share at period end (1)   $ 19.37     $ 18.59     $ 17.38     $ 19.37     $ 17.38  
    Cash dividends   $ 0.15     $ 0.15     $ 0.15     $ 0.45     $ 0.45  
                                             
    Key Performance Ratios                                        
    Return on average assets     0.62 %     0.68 %     0.91 %     0.73 %     1.03 %
    Adjusted return on average assets (1)     0.67 %     0.84 %     0.91 %     0.80 %     1.03 %
    Return on average equity     7.28 %     8.31 %     10.96 %     8.84 %     12.57 %
    Adjusted return on average equity (1)     7.93 %     10.23 %     10.96 %     9.70 %     12.57 %
    Net interest margin(1)     3.43 %     3.40 %     3.35 %     3.36 %     3.44 %
    Efficiency ratio (1)     67.95 %     70.65 %     70.67 %     68.05 %     68.17 %
                                             
    Average Balances                                        
    Average assets   $ 1,449,185     $ 1,448,478     $ 1,355,113     $ 1,441,965     $ 1,360,154  
    Average earning assets     1,374,566       1,370,187       1,275,111       1,366,639       1,278,135  
    Average shareholders’ equity     122,802       118,255       112,987       119,303       111,460  
                                             
    Asset Quality                                        
    Loan charge-offs   $ 1,667     $ 521     $ 143     $ 2,601     $ 1,228  
    Loan recoveries     95       39       60       185       326  
    Net charge-offs     1,572       482       83       2,416       902  
    Non-accrual loans     5,929       8,549       3,116       5,929       3,116  
    Other real estate owned, net     56       —       —       56       —  
    Nonperforming assets (5)     5,985       8,549       3,116       5,985       3,116  
    Loans 30 to 89 days past due, accruing     2,358       2,399       1,395       2,358       1,395  
    Loans over 90 days past due, accruing     —       —       370       —       370  
    Special mention loans     516       1,380       —       516       —  
    Substandard loans, accruing     1,713       279       1,683       1,713       1,683  
                                             
    Capital Ratios (2)                                        
    Total capital   $ 148,477     $ 147,500     $ 146,163     $ 148,477     $ 146,163  
    Tier 1 capital     135,490       134,451       136,947       135,490       136,947  
    Common equity Tier 1 capital     135,490       134,451       136,947       135,490       136,947  
    Total capital to risk-weighted assets     14.29 %     14.13 %     14.80 %     14.29 %     14.80 %
    Tier 1 capital to risk-weighted assets     13.04 %     12.88 %     13.86 %     13.04 %     13.86 %
    Common equity Tier 1 capital to risk-weighted assets     13.04 %     12.88 %     13.86 %     13.04 %     13.86 %
    Leverage ratio     9.23 %     9.17 %     9.97 %     9.23 %     9.97 %

      
    FIRST NATIONAL CORPORATION
    Performance Summary
    (in thousands, except share and per share data)
    (unaudited)

        For the Period Ended  
        Sept 30, 2024     Jun 30, 2024     Mar 31, 2024     Dec 31, 2023     Sept 30, 2023  
    Balance Sheet                                        
    Cash and due from banks   $ 18,197     $ 16,729     $ 14,476     $ 17,194     $ 17,168  
    Interest-bearing deposits in banks     108,319       118,906       124,232       69,967       32,931  
    Cash and cash equivalents   $ 126,516     $ 135,635     $ 138,708     $ 87,161     $ 50,099  
    Securities available for sale, at fair value     146,013       144,816       147,675       152,857       148,175  
    Securities held to maturity, at amortized cost (net of allowance for credit losses)     121,425       123,497       125,825       148,244       149,948  
    Restricted securities, at cost     2,112       2,112       2,112       2,078       2,077  
    Loans, net of allowance for credit losses     982,016       977,423       960,371       957,456       943,603  
    Other real estate owned, net     56       —       —       —       —  
    Premises and equipment, net     22,960       22,205       21,993       22,142       21,363  
    Accrued interest receivable     4,794       4,916       4,978       4,655       4,502  
    Bank owned life insurance     24,992       24,802       24,652       24,902       24,734  
    Goodwill     3,030       3,030       3,030       3,030       3,030  
    Core deposit intangibles, net     104       108       113       117       122  
    Other assets     16,698       18,984       17,738       16,653       18,567  
    Total assets   $ 1,450,716     $ 1,457,528     $ 1,447,195     $ 1,419,295     $ 1,366,220  
                                             
    Noninterest-bearing demand deposits   $ 383,400     $ 397,770     $ 384,092     $ 379,208     $ 403,774  
    Savings and interest-bearing demand deposits     663,925       665,208       677,458       662,169       646,980  
    Time deposits     205,930       202,818       197,587       192,349       184,419  
    Total deposits   $ 1,253,255     $ 1,265,796     $ 1,259,137     $ 1,233,726     $ 1,235,173  
    Other borrowings     50,000       50,000       50,000       50,000       —  
    Subordinated debt, net     4,999       4,998       4,998       4,997       4,997  
    Junior subordinated debt     9,279       9,279       9,279       9,279       9,279  
    Accrued interest payable and other liabilities     8,068       7,564       5,965       5,022       4,792  
    Total liabilities   $ 1,325,601     $ 1,337,637     $ 1,329,379     $ 1,303,024     $ 1,254,241  
                                             
    Preferred stock   $ —     $ —     $ —     $ —     $ —  
    Common stock     7,871       7,851       7,847       7,829       7,826  
    Surplus     33,409       33,116       33,021       32,950       32,840  
    Retained earnings     99,270       97,966       96,465       94,198       95,988  
    Accumulated other comprehensive (loss), net     (15,435 )     (19,042 )     (19,517 )     (18,706 )     (24,675 )
    Total shareholders’ equity   $ 125,115     $ 119,891     $ 117,816     $ 116,271     $ 111,979  
    Total liabilities and shareholders’ equity   $ 1,450,716     $ 1,457,528     $ 1,447,195     $ 1,419,295     $ 1,366,220  
                                             
    Loan Data                                        
    Mortgage real estate loans:                                        
    Construction and land development   $ 61,446     $ 60,919     $ 53,364     $ 52,680     $ 50,405  
    Secured by farmland     9,099       8,911       9,079       9,154       7,113  
    Secured by 1-4 family residential     351,004       346,976       347,014       344,369       340,773  
    Other real estate loans     440,648       440,857       436,006       438,118       426,065  
    Loans to farmers (except those secured by real estate)     633       349       332       455       667  
    Commercial and industrial loans (except those secured by real estate)     114,190       115,951       113,230       112,619       116,463  
    Consumer installment loans     5,396       5,068       4,808       4,753       4,596  
    Deposit overdrafts     253       365       251       222       368  
    All other loans     12,051       10,580       8,890       7,060       6,049  
    Total loans   $ 994,720     $ 989,976     $ 972,974     $ 969,430     $ 952,499  
    Allowance for credit losses     (12,704 )     (12,553 )     (12,603 )     (11,974 )     (8,896 )
    Loans, net   $ 982,016     $ 977,423     $ 960,371     $ 957,456     $ 943,603  


      
    FIRST NATIONAL CORPORATION
    Non-GAAP Reconciliations
    (in thousands, except share and per share data)
    (unaudited)

          For the Three Months Ended       For the Nine Months Ended  
        Sept 30, 2024     Jun 30, 2024     Sept 30, 2023     Sept 30, 2024     Sept 30, 2023  
    Adjusted Net Income                                        
    Net income (GAAP)   $ 2,248     $ 2,442     $ 3,121     $ 7,899     $ 10,475  
    Add: Merger-related expenses     219       571       —       790       —  
    Subtract: Tax effect of adjustment (4)     (19 )     (5 )     —       (24 )     —  
    Adjusted net income (non-GAAP)   $ 2,448     $ 3,008     $ 3,121     $ 8,665     $ 10,475  
                                             
    Adjusted Earnings Per Share, Basic                                        
    Weighted average shares, basic     6,287,997       6,278,113       6,256,663       6,278,668       6,266,707  
    Basic earnings per share (GAAP)   $ 0.36     $ 0.39     $ 0.50     $ 1.26     $ 1.67  
    Adjusted earnings per share, basic (Non-GAAP)   $ 0.39     $ 0.48     $ 0.50     $ 1.38     $ 1.67  
                                             
    Adjusted Earnings Per Share, Diluted                                        
    Weighted average shares, diluted     6,303,282       6,289,405       6,271,351       6,291,775       6,276,502  
    Diluted earnings per share (GAAP)   $ 0.36     $ 0.39     $ 0.50     $ 1.26     $ 1.67  
    Adjusted diluted earnings per share (Non-GAAP)   $ 0.39     $ 0.48     $ 0.50     $ 1.38     $ 1.67  
                                             
    Adjusted Pre-Provision, Pre-Tax Earnings                                        
    Net interest income   $ 11,749     $ 11,494     $ 10,683     $ 34,093     $ 32,604  
    Total noninterest income     3,203       2,686       3,053       9,936       8,715  
    Net revenue   $ 14,952     $ 14,180     $ 13,736     $ 44,029     $ 41,319  
    Total noninterest expense     10,459       10,659       9,784       31,005       28,142  
    Pre-provision, pre-tax earnings   $ 4,493     $ 3,521     $ 3,952     $ 13,024     $ 13,177  
    Add: Merger expenses     219       571       –       790       –  
    Adjusted pre-provision, pre-tax, earnings   $ 4,712     $ 4,092     $ 3,952     $ 13,814     $ 13,177  
                                             
    Adjusted Performance Ratios                                        
    Average assets   $ 1,449,264     $ 1,448,478     $ 1,355,178     $ 1,441,996     $ 1,360,154  
    Return on average assets (GAAP)     0.62 %     0.68 %     0.91 %     0.73 %     1.03 %
    Adjusted return on average assets (Non-GAAP)     0.67 %     0.84 %     0.91 %     0.80 %     1.03 %
                                             
    Average shareholders’ equity   $ 122,802     $ 118,255       11,309     $ 119,303     $ 111,460  
    Return on average equity (GAAP)     7.28 %     8.31 %     10.96 %     8.87 %     12.57 %
    Adjusted return on average equity (Non-GAAP)     7.93 %     10.23 %     10.96 %     9.70 %     12.57 %
                                             
    Pre-provision, pre-tax return on average assets     1.23 %     0.98 %     1.16 %     1.21 %     1.30 %
    Adjusted pre-provision, pre-tax return on average assets     1.29 %     1.14 %     1.16 %     1.28 %     1.30 %
                                             
    Net Interest Margin                                        
    Tax-equivalent net interest income   $ 11,842     $ 11,587     $ 10,764     $ 34,360     $ 32,848  
    Average earning assets     1,374,566       1,370,187       1,275,111       1,366,639       1,278,136  
    Net interest margin     3.43 %     3.40 %     3.35 %     3.36 %     3.44 %
                                             

      
    FIRST NATIONAL CORPORATION
    Non-GAAP Reconciliations
    (in thousands, except share and per share data)
    (unaudited)

        For the Three Months Ended     For the Nine Months Ended  
        Sept 30, 2024     June 30, 2024     Sept 30, 2023     Sept 30, 2024     Sept 30, 2023  
    Efficiency Ratio                                        
    Total noninterest expense   $ 10,459       $ 10,659     $ 9,784     $ 31,005     $ 28,142  
    Add: other real estate owned income, net     (10 )       —       (15 )     (10 )     201  
    Subtract: amortization of intangibles     (4 )       (4 )     (5 )     (13 )     (14 )
    Subtract: loss on disposal of premises and equipment, net     (2 )       —       —       (50 )     —  
    Subtract: merger expenses     (219 )       (571 )     —       (790 )     —  
    Subtotal   $ 10,224       $ 10,084     $ 9,764     $ 30,142     $ 28,329  
    Tax-equivalent net interest income   $ 11,842       $ 11,587     $ 10,764     $ 34,360     $ 32,848  
    Total noninterest income     3,203         2,686       3,053       9,936       8,715  
    Subtotal   $ 15,045       $ 14,273     $ 13,817     $ 44,296     $ 41,563  
                                             
    Efficiency ratio     67.95 %       70.65 %     70.67 %     68.05 %     68.16 %
    Tax-Equivalent Net Interest Income                                        
    GAAP measures:                                        
    Interest income – loans   $ 14,479     $ 14,004     $ 12,640     $ 41,967     $ 36,038  
    Interest income – investments and other     2,965       3,051       1,991       8,866       6,407  
    Interest expense – deposits     (4,958 )     (4,820 )     (3,810 )     (14,549 )     (9,428 )
    Interest expense – subordinated debt     (69 )     (69 )     (69 )     (207 )     (207 )
    Interest expense – junior subordinated debt     (68 )     (66 )     (69 )     (202 )     (203 )
    Interest expense – other borrowings     (600 )     (606 )     –       (1,782 )     (3 )
    Net interest income   $ 11,749     $ 11,494     $ 10,683     $ 34,093     $ 32,604  
    Non-GAAP measures:                                        
    Add: Tax benefit realized on non-taxable interest income – loans (4)   $ 13     $ 12     $ —     $ 25     $ —  
    Add: Tax benefit realized on non-taxable interest income – municipal securities (4)     80       81       81       242       244  
    Tax benefit realized on non-taxable interest income   $ 93     $ 93     $ 81     $ 267     $ 244  
    Tax-equivalent net interest income   $ 11,842     $ 11,587     $ 10,764     $ 34,360     $ 32,848  
                                             
                                             
    Tangible Common Equity and Tangible Assets                                        
    Total assets (GAAP)   $ 1,450,716     $ 1,457,528     $ 1,366,220     $ 1,451,032     $ 1,366,220  
    Subtract: goodwill     (3,030 )     (3,030 )     (3,030 )     (3,030 )     (3,030 )
    Subtract: core deposit intangibles, net     (104 )     (108 )     (122 )     (104 )     (122 )
    Tangible assets (Non-GAAP)   $ 1,447,582     $ 1,454,390     $ 1,363,068     $ 1,447,898     $ 1,363,068  
                                             
    Total shareholders’ equity (GAAP)   $ 125,115     $ 119,891     $ 111,979     $ 125,115     $ 111,979  
    Subtract: goodwill     (3,030 )     (3,030 )     (3,030 )     (3,030 )     (3,030 )
    Subtract: core deposit intangibles, net     (104 )     (108 )     (122 )     (104 )     (122 )
    Tangible common equity (Non-GAAP)   $ 121,981     $ 116,753     $ 108,827     $ 121,981     $ 108,827  
                                             
    Tangible common equity to tangible assets ratio     8.43 %     8.03 %     8.00 %     8.43 %     8.00 %
                                             

      
    FIRST NATIONAL CORPORATION
    Non-GAAP Reconciliations
    (in thousands, except share and per share data)
    (unaudited)

        For the Three Months Ended     For the Nine Months Ended  
        Sept 30, 2024     June 30, 2024     Sept 30, 2023     Sept 30, 2024     Sept 30, 2023  
    Tangible Book Value Per Share                                        
    Tangible common equity   $ 121,981     $ 116,753     $ 108,827     $ 121,981     $ 108,827  
    Common shares outstanding, ending     6,296,705       6,280,406       6,260,934       6,296,705       6,260,934  
    Tangible book value per share   $ 19.37     $ 18.59     $ 17.38     $ 19.37     $ 17.38  
                                             

    (1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” and “Non-GAAP Reconciliations” for additional information and detailed calculations of adjustments.

    (2) Capital ratios are for First Bank.

    (3) Capital ratios presented are for First National Corporation.

    (4)  The tax rate utilized in calculating the tax benefit is 21%. Certain merger-related expenses are non-deductible.

    (5) Nonperforming assets are comprised of nonaccrual loans and other real estate owned.

    The MIL Network –

  • MIL-OSI USA: H.R. 6213, National Quantum Initiative Reauthorization Act

    Source: US Congressional Budget Office

    Categories24/7 OSI, MIL-OSI, United States Government, US Congressional, US Congressional Budget Office

    By Fiscal Year, Millions of Dollars

    2025

    2025-2029

    2025-2034

    Direct Spending (Outlays)

    0

    0

    0

    Revenues

    0

    0

    0

    Increase or Decrease (-) in the Deficit

    0

    0

    0

    Spending Subject to Appropriation (Outlays)

    57

    1,326

    not estimated

    Increases net direct spending in any of the four consecutive 10-year periods beginning in 2035?

    No

    Statutory pay-as-you-go procedures apply?

    No

    Mandate Effects

    Increases on-budget deficits in any of the four consecutive 10-year periods beginning in 2035?

    No

    Contains intergovernmental mandate?

    No

    Contains private-sector mandate?

    No
    The bill would
    Estimated budgetary effects would mainly stem from

    MIL OSI USA News –

  • MIL-OSI: Guggenheim Investments Announces November 2024 Closed-End Fund Distributions

    Source: GlobeNewswire (MIL-OSI)

    NEW YORK, Nov. 01, 2024 (GLOBE NEWSWIRE) — Guggenheim Investments today announced that certain closed-end funds have declared their distributions. The table below summarizes the distribution schedule for each closed-end fund (collectively, the “Funds” and each, a “Fund”).

    The following dates apply to the distributions:

    Record Date  November 15, 2024
    Ex-Dividend Date November 15, 2024
    Payable Date  November 29, 2024
    Distribution Schedule
    NYSE
    Ticker    		 Closed-End Fund Name Distribution
    Per Share    		 Change from Previous
    Distribution    		 Frequency
    AVK Advent Convertible and Income Fund $0.1172†   Monthly
    GBAB Guggenheim Taxable Municipal Bond & Investment Grade Debt Trust $0.12573†   Monthly
    GOF Guggenheim Strategic Opportunities Fund $0.1821†   Monthly
    GUG Guggenheim Active Allocation Fund $0.11875†   Monthly

    † A portion of this distribution is estimated to be a return of capital rather than income. Final determination of the character of distributions will be made at year-end. The Section 19(a) notice referenced below provides more information and can be found at www.guggenheiminvestments.com.

    You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Distribution Policy.

    Past performance is not indicative of future performance. As of this announcement, the sources of each fund distribution are estimates. Distributions may be paid from sources of income other than ordinary income, such as short-term capital gains, long-term capital gains or return of capital. Unless otherwise noted, the distributions above are not anticipated to include a return of capital. If a distribution consists of something other than ordinary income, a Section 19(a) notice detailing the anticipated source(s) of the distribution will be made available. The Section 19(a) notice will be posted to a Fund’s website and to the Depository Trust & Clearing Corporation so that brokers can distribute such notices to Shareholders of the Fund. Section 19(a) notices are provided for informational purposes only and not for tax reporting purposes. The final determination of the source and tax characteristics of all distributions will be made after the end of the year. This information is not legal or tax advice. Consult a professional regarding your specific legal or tax matters.

    About Guggenheim Investments

    Guggenheim Investments is the global asset management and investment advisory division of Guggenheim Partners, LLC (“Guggenheim”), with more than $249 billion* in assets under management across fixed income, equity, and alternative strategies. We focus on the return and risk needs of insurance companies, corporate and public pension funds, sovereign wealth funds, endowments and foundations, consultants, wealth managers, and high-net-worth investors. Our 235+ investment professionals perform rigorous research to understand market trends and identify undervalued opportunities in areas that are often complex and underfollowed. This approach to investment management has enabled us to deliver innovative strategies providing diversification opportunities and attractive long-term results.

    Guggenheim Investments includes Guggenheim Funds Investment Advisors, LLC (“GFIA”), Guggenheim Partners Investment Management, LLC (“GPIM”) and Guggenheim Funds Distributors, LLC (“GFD”). GFIA serves as Investment Adviser for GBAB, GOF and GUG. GPIM serves as Investment Sub-Adviser for GBAB, GOF and GUG. GFD serves as servicing agent for AVK. The Investment Adviser for AVK is Advent Capital Management, LLC and is not affiliated with Guggenheim.

    *Assets under management are as of 09.30.2024 and include leverage of $14.8bn. Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Japan Limited, and GS GAMMA Advisors, LLC.

    This information does not represent an offer to sell securities of the Funds and it is not soliciting an offer to buy securities of the Funds. There can be no assurance that the Funds will achieve their investment objectives. Investments in the Funds involve operating expenses and fees. The net asset value of the Funds will fluctuate with the value of the underlying securities. It is important to note that closed-end funds trade on their market value, not net asset value, and closed-end funds often trade at a discount to their net asset value. Past performance is not indicative of future performance. An investment in closed-end funds is subject to investment risk, including the possible loss of the entire amount that you invest. Some general risks and considerations associated with investing in a closed-end fund may include: Investment and Market Risk; Lower Grade Securities Risk; Equity Securities Risk; Foreign Securities Risk; Interest Rate Risk; Illiquidity Risk; Derivative Risk; Management Risk; Anti-Takeover Provisions; Market Disruption Risk and Leverage Risk. See www.guggenheiminvestments.com/cef for a detailed discussion of Fund-specific risks.

    Investors should consider the investment objectives and policies, risk considerations, charges and expenses of any investment before they invest. For this and more information, visit www.guggenheiminvestments.com or contact a securities representative or Guggenheim Funds Distributors, LLC 227 West Monroe Street, Chicago, IL 60606, 800-345-7999.

    Analyst Inquiries
    William T. Korver
    cefs@guggenheiminvestments.com

    Not FDIC-Insured | Not Bank-Guaranteed | May Lose Value
    Member FINRA/SIPC (11/24) 63024

    The MIL Network –

  • MIL-OSI Asia-Pac: Significant Achievements made under Special Campaign 4.0 in Department of Health and Family Welfare

    Source: Government of India (2)

    Significant Achievements made under Special Campaign 4.0 in Department of Health and Family Welfare

    52,665 physical files reviewed, 31,659 physical files weeded out, 5,160 Public Grievances and 595 Appeals have been disposed of, Revenue of Rs.18,63,356 generated by selling of scrap materials and 1,433 Cleanliness Campaigns conducted

    Posted On: 01 NOV 2024 8:04PM by PIB Delhi

    The Department of Health and Family Welfare (DoHFW) launched Special Campaign 4.0 from October 2 to October 31, 2024, aimed at institutionalizing cleanliness (Swachhata) and reducing pending tasks across its headquarters, central government hospitals, attached offices, subordinate offices, autonomous bodies, and CPSUs nationwide.

    Under the leadership of Union Health Secretary Ms. Punya Salila Srivastava, the campaign’s implementation was regularly reviewed to ensure efficiency and meet established targets.

    Key achievements during the campaign include the disposition of 25 references from Members of Parliament, 3 Parliamentary assurances, 5,160 public grievances, and 595 associated appeals, as well as the simplification of 45 rules and processes. Additionally, 52,665 physical files were reviewed, resulting in the weeding out of 31,659 files, and 12,428 e-files were reviewed, with 10,174 closed. The campaign also saw the conduct of 1,433 cleanliness campaigns across various offices, freeing up 40,742 sq. ft. of office space, and generating revenue amounting to ₹18,63,356 from the sale of scrap materials and e-waste. These activities reflect DoHFW’s commitment to enhancing operational efficiency and promoting a culture of cleanliness within its institutions.

    The progress of implementation phase of the campaign was uploaded daily on SCDPM portal (https://scdpm.nic.in) of the Department of Administrative Reforms & Public Grievances (DARPG). Social media updates, PIB Statements and Best Practices were also uploaded on the portal by showcasing the progress in the campaign.

    Few highlights are as follows:

    On 16th October, 2024, Shri V. Srinivas, Secretary, Department of Administrative Reforms & Public Grievances (DARPG) along with Ms. Punya Salila Srivastava, Union Health Secretary reviewed the activities undertaken by DoHFW in ‘Special Campaign 4.0

     

    Training of Safai Mitras on ‘Swachhata Hi Sewa’ module on iGOT Platform was conducted on 23rd October, 2024 (chaired by Ms. Punya Salila Srivastava, Union Health Secretary) as a part of the Karmayogi Saptah (National Learning Week) and Special Campaign 4.0

     

      

    During Special Campaign 4.0, ‘Swachhata Hi Seva’ module was completed by more than 11,500 employees including officers on iGOT platform and more than 7,500 Safai Mitras in physical mode

     

    AIIMS, Jodhpur transforming plastic containers into planters which aims to minimize environmental impact of plastic while encouraging a culture of creativity and responsibility among staff

     

            

    Before                                  After

    Conversion of discarded chairs into functiona/ attractive benches and signage stands at Regional Institute of Medical Sciences (RIMS), Imphal to encourage upcycling

    DoHFW remain committed to the goals of Special Campaign 4.0 and will continue to contribute actively in the activities of the campaign even after the campaign ended on 31st October, 2024. It has been emphasised that with the combined efforts of all, lasting improvements in cleanliness and governance can be achieved.

    ***

    MV

    HFW/ Special Campaign 4.0 /01st November 2024/1

    (Release ID: 2070237) Visitor Counter : 25

    MIL OSI Asia Pacific News –

  • MIL-OSI Asia-Pac: CBIC and formations under it actively engage in Special Campaign 4.0

    Source: Government of India (2)

    CBIC and formations under it actively engage in Special Campaign 4.0

    433 public grievances, 80 public grievance appeals, and five MP references

    27,656 physical files eliminated out of 49,667 reviewed files

    819 cleanliness events organised across CBIC office premises in States and public areas

    Rs. 3.80 lakh (approx) generated from the disposal of 17,121 kg scrap, freeing 16,706 square feet of additional office space

    73 kg drugs, 49 lakhs foreign cigarettes, and other contraband worth Rs. 460 crore destroyed by Delhi Customs (Preventive) Commissionerate and Customs (Airport and General) Commissionerate jointly

    82.72 lakh sticks smuggled cigarettes worh Rs. 5.5 crore destroyed by Customs Commissionerate (Prev.), Vijayawada

    Posted On: 01 NOV 2024 7:11PM by PIB Delhi

    The Central Board of Indirect Taxes & Customs (CBIC), Department of Revenue, Ministry of Finance, actively engaged in the Special Campaign 4.0 from 2nd-31st October, 2024, with special focus on Swachhata.

    The initiatives during this period focused on instilling the principles of cleanliness while also addressing important backlogs in key work areas. The campaign prioritised addressing public complaints to enhance service delivery and responsiveness. Efforts were made to declutter and optimise office environments by removing outdated and unnecessary items including the clearance of seized contraband, such as narcotic substances and foreign-origin cigarettes, ensuring that these items were disposed of in compliance with legal regulations.

    This year, CBIC also marked the 10th anniversary of the Swachh Bharat Mission through the spirited celebration of ‘Swachhata Hi Seva 2024, under the theme ‘Swabhav Swachhata Sanskaar Swachhata (4S) campaign’. This initiative emphasised large-scale awareness and public participation in maintaining cleanliness, specifically targeting Cleanliness Target Units (CTUs) across the country. With active involvement from CBIC officers, staff and field offices, the campaign fostered a collaborative environment that significantly enhanced its impact.

    The concerted efforts of CBIC formations resulted in the achievement of several key milestones as follows:

    • Resolution of 433 public grievances, 80 public grievance appeals, and five MP references.
    • Elimination of 27,656 physical files out of 49,667 files reviewed.
    • Review and closure of 1,501 e-files out of 36,237 assessed
    • 819 cleanliness events organised across office premises and public areas.
    • Generation of approximately Rs. 3.80 lakh from the disposal of 17,121 kg scrap, freeing 16,706 square feet of additional office space.
    • Destruction of 73 kg of drugs, 49 lakhs foreign cigarettes, and other contraband worth Rs. 460 crore by Delhi Customs (Preventive) Commissionerate and Customs (Airport and General) Commissionerate jointly, besides Customs Commissionerate (Prev.), Vijayawada disposed of 82.72 lakh sticks of smuggled cigarettes valued at Rs. 5.5 crore as part of the ongoing battle against illicit imports.

    Several best practices were implemented across various Customs and GST offices to promote sustainability and employee welfare. A Bio-Gas Plant was set up in the Customs Colony in Vapi, turning waste into wealth.

    The CGST Faridabad Commissionerate transformed two abandoned rooms filled with old records and furniture into a cafeteria and a crèche within its premises. The CGST Jaipur Zone planted 11,000 saplings of over 100 native species using an innovative afforestation method that utilized organic waste and only 30% of the usual water requirement. The CGST Gurugram Audit Commissionerate reclaimed office space to develop a crèche for employee welfare. Additionally, efforts to ensure cleanliness extended to Valappu Beach in Cochin, where more than 400 officers, including 100 students, volunteered. The campaign also led to the cleaning of office premises and the repair and painting of old furniture, which were subsequently donated to Jila Parishad Hindi Ucha Primary School and Primary School, Umrer, Nagpur, with these initiatives being effectively showcased on social media platforms.

    Around 200 posts were shared on ‘X’ and other social media platforms through CBIC’s official handle and field offices, significantly amplifying the Swachhata message. Efforts will persist in building on these practices and ensuring their sustainability throughout the year.

    ****

    NB/KMN

    (Release ID: 2070219) Visitor Counter : 45

    MIL OSI Asia Pacific News –

  • MIL-OSI Asia-Pac: Activities of Department of Agriculture and Farmers’ Welfare during the last Week of Special Campaign 4.0

    Source: Government of India

    Posted On: 01 NOV 2024 5:46PM by PIB Delhi

    Special Campaign 4.0 was launched by DARPG for minimizing pendency in Government offices. Special Campaign 4.0 is being implemented in full swing. During the last week of Special Campaign 4.0, a number  of teams were constituted under Department of Agriculture & Farmers’ Welfare to visit the offices located in Delhi & NCR viz. Mahalanobis National Crop Forecasting Centre, Pusa, National Seeds Corporation, Pusa, National Centre for Organic and Natural Farming, Ghaziabad, Directorate of Extension, Pusa, Directorate of Wheat Development, Gurugram, Soil and Land Use Survey of India Noida, Small Farmers Agri-Business Consortium Houz Khas and Central Fertilizer Quality Control & Training Institute, Faridabad to review the progress and the performance of the subordinate / attached office and PSU under the administrative control of this department.

    The team inspected these office premises to review the progress made by these organization during the Special Campaign 4.0.

     

    By the end of last week of Special Campaign 4.0, five PIB Notes have been released and activities have been undertaken on various social media platforms, i.e. more than 234 tweets, 100 Facebook posts, 62 Instagram posts, 26 YouTube posts and 11 posts on Linked in have been made collectively by this department and its attached/subordinate offices and their field offices, etc.

    Progress/achievement of the Department during the last week of Special Campaign 4.0 ending on 31st October 2024 are as under:-

    S.No.

    Activities

    Targets

    Achievement

    1

    No.of cleanliness campaign site

    1791

    1360

    2

    No. of pending references from MPs

    50

    19

    3

    Pending Public Grievances

    22295

    20549

    4

    Pending PG Appeals

    698

    506

    5

    Record Management (Physical files reviewed)

    53660

    47950

    6

    Record Management (Physical files weeded out)

    18959

    18959

    7

    Space freed (area in Sq. ft.)

    53761

    8

    Revenue generated (Amount in Rupees)

    3846455.00

    *****

    SS

     

     

     

     

     

     

     

     

     

     

    (Release ID: 2070183) Visitor Counter : 20

    MIL OSI Asia Pacific News –

  • MIL-OSI Asia-Pac: Department of Financial Services (DFS), Ministry of Finance, successfully concludes Special Campaign 4.0

    Source: Government of India (2)

    Department of Financial Services (DFS), Ministry of Finance, successfully concludes Special Campaign 4.0

    Special Campaign 4.0 demonstrated commitment to cleanliness and efficiency for DFS and its affiliated organisations across the country

    100% disposal of Public Grievances and Appeals achieved

    More than 38,500 sites cleaned; Cleanliness drive frees up 11 lakh square feet space; PSBs and other financial institutions under DFS monetise Rs. 4.50 crore through scrap disposal

    Under the citizen centric initiatives, financial literacy camps organised in more than 510 locations

    Posted On: 01 NOV 2024 4:47PM by PIB Delhi

    The Department of Financial Services (DFS), Ministry of Finance, and its affiliated organisations successfully completed the one month-long Special Campaign 4.0 with special focus on minimising pendency, and institutionalising Swachhata from 2nd-31st October 2024.

    The DFS launched the Special Campaign 4.0 with special impetus on better space management, customer centric initiatives, making the environment clean and green, record management and disposal of scrap.

    All the organisations of DFS, Public Sector Banks (PSBs), Public Sector Insurance Companies and other Public Sector Financial Institutions like NABARD, SIDBI, EXIM Bank, NHB, IIFCL etc. actively participated in the Special Campaign 4.0.

    The DFS achieved 100% disposal of all identified Public Grievances, Public Appeals, PMO references and MP References. 11.79 lakh square feet of space has freed and revenue of Rs. 4.50 crore has been earned through scrap disposal. The campaign was conducted in more than 38,500 sites across the country.

    Twelve Public Sector Banks and 43 Regional Rural Banks organised Pension Grievances Weeks. In the camps, apart from the grievances registered & redressed, pensioners were also educated regarding submission of online life certificate and door step banking facilities.  In more than 52,208 branches across the country approx. 1.45 lakhs pensioners were contacted.   

    Various videos and static contents were posted on Social media platforms by PSBs and RRBs to spread awareness towards Cyber Security. Safety tips and practices were shared through these educational posts to combat against cyber related frauds.

    Highlights & achievements of the Department and its organisations:

    1. Cleanliness Campaigns/Sites/Offices Cleaned: 38,577
    2. Space Freed: 11,79,219.00 sq. ft.
    3. Revenue Earned from Scrap Disposal: Rs. 4,54,53,508.00
    4. Disposal of Public Grievances: 9,725
    5. Disposal of Public Grievances Appeals: 2,378

    The DFS sensitised its all organisations to use the opportunity of Special Campaign 4.0 to enhance customer interface and to undertake citizen centric initiatives. The organisations of DFS, being in the financial services sector, were conveyed to undertake the activities like Financial Literacy campaigns, Registration/Updation of Nomination in bank accounts, Activating Dormant Accounts, Renewal of Locker Agreements, Disposal of Pending Claims etc. The achievements during the Campaign on these parameters are as follows:

    1. Financial Literacy Camps organised: More than 510 locations across the country.
    2. Number of Dormant Accounts Activated- 79.97 lakh.
    3. Number of Accounts in which Nomination Updated: 29.02 lakh.
    4. Number of Locker Agreements Renewed- 1.10 lakh.
    5. LIC of India settled 12.77 lakh unclaimed policies and settled claims of more than 10,742 cr.

    All the activities undertaken by organisations were regularly posted on various social media platforms. More than 1,000 posts were made during the campaign. As part of the initiative, customers of various organisations, staff members, senior management & head of organisations also gave feedback about the initiatives during the campaign on various social media platforms.

    Link of social media posts on Cyber Security & Fraud:

     

    Link of Testimonial Videos are as follows:

     

    ****

    NB/KMN

    (Release ID: 2070163) Visitor Counter : 57

    MIL OSI Asia Pacific News –

  • MIL-OSI Security: New Jersey Resident Pleads Guilty to Helping Russia’s Defense Sector Evade U.S. Export Controls

    Source: Federal Bureau of Investigation FBI Crime News (b)

    Defendant Facilitated Russia’s Acquisition of Millions of Dollars of U.S.-Made Dual-Use Electronics Used in Radar, Surveillance, and Military Research and Development

    Vadim Yermolenko, 43, a dual U.S.-Russian national and resident of New Jersey, pleaded guilty to conspiracy to violate the Export Control Reform Act, conspiracy to commit bank fraud, and conspiracy to defraud the United States for his role in a transnational procurement and money laundering network that sought to acquire sensitive dual-use electronics for Russian military and intelligence services.

    “This defendant joins the nearly two dozen other criminals that our Task Force KleptoCapture has brought to justice in American courtrooms over the past two and a half years for enabling Russia’s military aggression,” said Attorney General Merrick B. Garland. “This defendant admitted to playing a central role in a now-disrupted scheme with Russian intelligence services to smuggle sniper rifle ammunition and U.S. military grade equipment into Russia. The Justice Department will never stop working to aggressively disrupt and prosecute both the criminal networks and the individuals responsible for bolstering the Russian war machine.”

    “The illegal export of sensitive, dual-use technologies in support of Russia’s war effort poses a significant threat to the United States and its allies and must not be tolerated,” said FBI Director Christopher Wray. “The defendant in this case played a key role in exporting U.S. technology that in the hands of our adversaries could pose great danger to our national security. The FBI and its partners will continue to focus on protecting strategic innovation at home and hold accountable anyone who facilitates illegal transfers to hostile nations like Russia.”

    “To facilitate the Russian war machine, the defendant played a critical role in exporting sensitive, dual-use technologies to Russia, facilitating shipping and the movement of millions of dollars through U.S. financial institutions,” said U.S. Attorney Breon Peace for the Eastern District of New York. “This plea highlights my Office and our law enforcement partners continued commitment to use all tools available to prosecute those who unlawfully procure U.S. technology to send to Russia.”

    According to court documents, the defendant was affiliated with Serniya Engineering and Sertal LLC, Moscow-based companies that operate under the direction of Russian intelligence services to procure advanced electronics and sophisticated testing equipment for Russia’s military industrial complex and research and development sector. Serniya and Sertal operated a vast network of shell companies and bank accounts throughout the world, including the United States, that were used in furtherance of the scheme to conceal the involvement of the Russian government and the true Russian end users of U.S.-origin equipment.

    The defendant and his co-conspirators unlawfully purchased and exported highly sensitive, export controlled electronic components, some of which can be used in the development of nuclear and hypersonic weapons, quantum computing and other military applications. Following Russia’s invasion of Ukraine in February 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce (DOC) Bureau of Industry and Security (BIS) levied sanctions and imposed additional export restrictions on Serniya, Sertal, and several individuals and companies used in the scheme, calling them “instrumental to the Russian Federation’s war machine.”

    Sertal was licensed to conduct highly sensitive and classified procurement activities by Russia’s Federal Security Service (FSB), Russia’s principal security agency and the main successor agency to the Soviet Union’s KGB. The Serniya network’s Russian clients included State Corporation Rostec, the state-owned defense conglomerate; State Atomic Energy Corporation Rosatom (Rosatom); the Ministry of Defense; the Foreign Intelligence Service (SVR); and various components of the FSB, including the Department of Military Counterintelligence and the Directorate for Scientific and Technological Intelligence, commonly known as “Directorate T.”

    To carry out the scheme, the defendant helped set up numerous shell companies and dozens of bank accounts in the U.S. to illicitly move money and export-controlled goods. During the period charged in the indictment, more than $12 million passed through accounts owned or controlled by the defendant. These funds were used in part to purchase sensitive equipment used in radar, surveillance and military research and development. In one instance, money from one of the defendant’s accounts was used to purchase export-controlled sniper bullets, which were intercepted in Estonia before they could be smuggled into Russia.

    Co-defendant Alexey Brayman previously pleaded guilty to conspiracy to defraud the United States and is awaiting sentence. The case against co-defendant Vadim Konoshchenok, a suspected FSB operative, was dismissed after Konoshchenok was removed from the United States as part of a prisoner exchange negotiated between the United States and Russia. Defendant Nikolaos Bogonikolos’ case remains pending. Defendants Boris Livshits, Alexey Ippolitov, Svetlana Skvortsova, and Yevgeniy Grinin remain at large.        

    The FBI, BIS, and IRS are investigating the case.

    The U.S. Customs and Border Protection, Department of Justice’s Office of International Affairs, and Estonian authorities provided valuable assistance.

    Assistant U.S. Attorneys Artie McConnell, Andrew D. Reich, and Matthew Skurnik for the Eastern District of New York are prosecuting the case, with assistance from Trial Attorney Scott A. Claffee of the National Security Division’s Counterintelligence and Export Control Section.

    Today’s actions were coordinated through the Justice Department’s Task Force KleptoCapture and the Justice and Commerce Departments’ Disruptive Technology Strike Force. Task Force KleptoCapture is an interagency law enforcement task force dedicated to enforcing the sweeping sanctions, export restrictions and economic countermeasures that the United States has imposed, along with its allies and partners, in response to Russia’s unprovoked military invasion of Ukraine. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states.

    MIL Security OSI –

  • MIL-OSI Global: Massachusetts could be the next state to get rid of the ‘subminimum wage’ for tipped workers

    Source: The Conversation – USA – By Jeannette Wicks-Lim, Research Professor, Political Economy Research Institute, UMass Amherst

    A Massachusetts ballot initiative would get rid of the state’s tipped minimum wage. AP Photo/Marta Lavandier

    The federal minimum wage for tipped workers has stood at US$2.13 an hour since 1991. Back then, it amounted to half the $4.25 regular minimum wage. But Congress has failed to increase the tipped minimum while periodically raising the regular wage floor. Today, the tipped rate is less than one-third of the $7.25 federal full minimum wage.

    As of October 2024, 30 states and Washington, D.C., had instituted their own, higher, regular minimum wages. The number of states taking this step keeps rising in part because Congress hasn’t raised the federal minimum wage since 2009. Over the years, many states have also adopted higher wages for tipped workers. Seven states have no tipped minimum wage at all, which means that employers must pay at least the state-mandated minimum wage to all workers, including those who earn tips.

    If Massachusetts voters approve a ballot initiative on Nov. 5, 2024, their state will gradually raise the state’s tipped minimum wage until it matches the state minimum wage. That is, it will rise from $6.75 to $15 per hour by 2029.

    Massachusetts would be joining eight states that require – or are on their way to requiring – the full minimum wage for tipped workers: Alaska, California, Minnesota, Montana, Nevada, Oregon, Washington and Michigan. Two major cities, Chicago and Washington, D.C., have similar measures on their books, too.

    To inform the debate about tipped wages, we – a labor economist and a sociologist – analyzed the potential impacts of implementing a full minimum wage for workers, businesses and consumers in Massachusetts. We found more evidence of potential upsides than downsides.

    Tipped minimum earners’ demographics

    For our study, we analyzed labor market data from the Bureau of Labor Statistics. We found that tipped workers are largely waiters, bartenders, hosts and bussers employed in bars and restaurants. They tend to earn low wages. Most are women, and they are disproportionately people of color.

    In Massachusetts, tipped workers typically earn low pay: On average, they take home $20.30 per hour, including what they get in gratuities. That’s about two-thirds of the state average hourly pay of $31.50.

    About 66% of tipped workers are women, compared with 49% in the state’s workforce as a whole. Some 43% are people of color, compared with 29% of all people employed in Massachusetts.

    Teens also make up a disproportionate share of Massachusetts’ tipped workers: 15%, versus 4% for the broader workforce. But the vast majority of tipped workers are at least 20 years old.

    Arguments for and against

    Proponents argue that eliminating the tipped minimum wage would boost pay for tipped workers and better ensure that workers are not subjected to wage theft. U.S. Sen. Elizabeth Warren of Massachusetts wants the federal government to take this step.

    Opponents argue that scrapping the lower minimum wage could backfire for tipped workers if their customers give smaller tips once they know employers have to pay tipped workers more – or some jobs are eliminated. They also worry that business costs would spike, raising prices. Massachusetts Gov. Maura Healey, a Democrat, opposes the measure.

    In Arizona, voters will cast their ballots on another ballot initiative that calls for a different type of tipped minimum wage reform. It calls for pegging the state’s tipped minimum wage to 25% below the full minimum wage. If approved, Arizona would effectively lower its tipped minimum wage, which currently stands at $11.35 an hour, to $10.76. Today, Arizona’s tipped minimum wage is $3.00 below the state’s full minimum wage of $14.35.

    Prone to wage theft

    When tipped workers’ base wages plus their tips do not add up to at least the state’s minimum wage, employers are supposed to make up the shortfall. This makes these workers particularly vulnerable to being underpaid, a form of wage theft.

    The consequences of this vulnerability are plain to see in restaurants and hotels. The hospitality industry, which employs the highest share of tipped workers, accounts for less than 6% of employed workers in Massachusetts.

    However, it accounts for nearly 14% of all complaints workers lodged with the Massachusetts attorney general’s office in 2023, including disproportionately high levels of complaints about minimum wage violations, the nonpayment of wages and tip violations.

    The hospitality industry also accounts for over 36% of all enforcement actions – investigations that produced evidence of labor violations – found by the Massachusetts attorney general’s office.

    The Massachusetts ballot initiative has stirred controversy in the state.

    Effects on earnings

    Two peer-reviewed economic studies that examined three decades of data found that tipped workers earn measurably more money as subminimum wage rates increase.

    Current wage rates that we observe in Bureau of Labor Statistics data reinforce those findings.

    Consider, for example, the $18.79 average hourly wage of tipped workers in states that treat tipped employees like other workers. This is 21.2% higher than the average $15.50 among tipped workers in states where the federal $2.13 subminimum wage remains in effect.

    Only part of this difference can be explained by the 15.7% difference in average wages for all workers in those different clusters of states.

    What could happen with business costs

    To be sure, more than doubling the $6.75 tipped rate in Massachusetts to $15.00 may sound like it could cause business costs to soar. A couple of factors, however, would soften the blow.

    First, we have calculated that the average tipped worker in Massachusetts restaurants earns about $11.75 an hour, before tips. Raising this rate to $15.00 is equal to a 28% increase – a much smaller lift than increasing the wage from $6.75 to $15.00. In addition, raising a worker’s wage from $11.75 to $15.00 by 2029 is equivalent to raising it to $13.00 in today’s dollars, or a 10% boost, after adjusting for projected inflation.

    Second, as we explained in our study, since tipped workers make up about 30% of Massachusetts restaurant workers, and the payrolls of these businesses typically amount to about 30% of their revenue, these numbers imply that eliminating the tipped minimum wage by 2029 would increase the average Massachusetts restaurant’s costs by 1%.

    Employers may also provide some other workers with raises, although they are not required to do so. That suggests the cost increase is more likely to be about double that, or 2% of sales.

    Expected impact on prices and jobs

    If the average Massachusetts restaurant were to pass its entire labor cost increase onto the consumer through higher prices, this would mean that restaurant prices would rise about 2%.

    This is equal to a $50 restaurant meal instead costing $51 – arguably a small price increase.

    The two studies mentioned above, which reviewed decades of data to see whether tipped workers earned more, also looked at whether businesses in states that increased their tipped minimum wage cut more jobs compared with businesses in states that didn’t.

    Although both research teams looked at basically the same data, one study found evidence of more job losses and the other did not, due to the different statistical choices they made. These studies, that is, produced inconclusive results about what raising the tipped minimum wage does to employment.

    There’s far more research on whether increasing the regular minimum wage has caused significant job losses. Studies have found that when it has gone up, employers have faced cost increases that are similar to what we’ve estimated for Massachusetts employers, if the state were to eliminate its tipped minimum wage. And that evidence points to no significant job losses.

    The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

    – ref. Massachusetts could be the next state to get rid of the ‘subminimum wage’ for tipped workers – https://theconversation.com/massachusetts-could-be-the-next-state-to-get-rid-of-the-subminimum-wage-for-tipped-workers-242097

    MIL OSI – Global Reports –