Colorado Business Litigation Lawyer Blog

According to the Federal Deposit Insurance Corporation (FDIC), there were 157 bank failures in 2010. Through January 21st of this year, 7 banks have failed. The most recent failure is United Western Bank in Denver, Colorado, whose deposits have been assumed by First Citizens Bank & Trust Co. of Raleigh, N.C. The year 2009 saw 140 failures, while there were only 25 failures in 2008, 3 in 2007 and none for 2006 and 2005. These failures paint a stark picture of the condition of our economy and of the banking system in particular, especially over the past two full years.

On the bright side, the deposits of most failed banks were assumed by other banks in transactions that were basically seamless, with the assuming banks opening for business either immediately or very shortly after the closure of the failed bank. Depositors of insured accounts were not affected by the transition. As most people are aware, checking and savings accounts in banks and thrift institutions are insured by the FDIC up to $250,000 per depositor, per insured bank, for each account ownership category.

The FDIC, an independent agency of the federal government, began operating on January 1, 1934, following the thousands of bank failures that occurred in the 1920s and early 1930s. The agency was created for the purpose of promoting confidence in the financial system. Today, the FDIC insures more than $7 trillion of deposits in virtually every bank and thrift in the U.S. No depositor of insured funds has lost a single cent since the FDIC began operations.

Funding for the FDIC is not provided by taxpayer dollars. Rather, it is funded by premiums that banks and thrift associations pay for deposit insurance coverage and from earnings from investments in U.S. Treasury securities. A five-person board of directors is appointed by the President and confirmed by the Senate. No more than three directors can be from the same political party.

To help determine if your deposits are fully insured, click here.

A bookkeeper at Impact on Education, a Boulder, Colorado-based charity, was arrested January 22, 2011, and charged with forgery and embezzlement of at least $160,000 of the charity’s funds. According to Boulder police, she forged more than 60 checks over several years. She remains in jail in lieu of $100,000 bail.

The charity’s website says Impact on Education (then The Foundation for Boulder Valley Schools) was founded in 1983. Its mission statement says it “leverages community resources to impact student learning, create opportunities, and build support of public education in the Boulder Valley School District.” The charity’s 2009 financial statement shows an income of about $1.5 million and net assets of almost $1 million.

A charity spokesperson, in speaking of the alleged embezzlement, says,” I could not understand it. I feel violated. It’s an unconscionable act.” The organization and independent auditors are carefully scrutinizing the records back to 2004, when the bookkeeper began working for the charity.

We would like to know if there were any internal or outside audits done on a regular basis and, if so, why the alleged shortages were not discovered. After all, that is one of the purposes of an audit. We can only speculate on what effect the alleged shortages will have on future contributions. Donors to nonprofit organizations have a right to expect that their gifts will be used for charitable purposes and not diverted to an employee. They also should expect that the organization will make reasonable efforts to see that the charity carries out the donors’ expectations.

We hope that Impact on Education will come forward with answers. The bookkeeper remains in jail in lieu of $100,000 bond. She is presumed innocent until and unless proven guilty through the legal process.

More fraud related postings:
"Colorado Man Indicted for Obtaining Fraudulent Mortgages," Colorado Business Litigation Lawyer Blog, posted 06/22/2010

"Colorado Victim Advocate Accused of Victimizing Victims," Colorado Business Litigation Lawyer Blog, posted 10/19/2010

Although the recent killings of six and the wounding of 14 others, including a member of U.S. Congress, at a political event outside a supermarket in Tucson has no direct connection to Colorado or the purpose of this blog, we would like to make some observations.

Here are some of the things that we believe no “liberal” or “conservative” political party or pundit or anyone else really knows about the incident at this time:

1. Did “targeting” of the congressional district by a political party somehow cause the shootings?
2. Did national political divisiveness or dissension have anything to do with the shooter’s decision process or his state of mind?
3. Did the shooter have any “rational” basis for his actions?
4. Would more restrictive gun control laws have prevented the tragedy?
5. Did constitutionally protected speech by any television or radio talk show personality influence or provoke the shooter’s actions and, if so, can or should anything be done about it?
6. Is it feasible or even possible to provide adequate protection to elected officials in public places that would prevent the same kind of tragedy in the future?
7. Can any state or federal law absolutely prevent a deranged person from gaining access to a deadly weapon and using it against an elected official or the public at large?

Everyone seems to have opinions on at least some of the issues raised by the questions. It is our belief that there are no ready or simple answers to the questions. The issues will be the subject of vigorous debate for quite some time.

One thing we do know is that we must allow our justice system to run its course, hopefully in an atmosphere of objectivity and calm. And irrespective of why the tragedy occurred, we want to extend our deepest sympathy to the victims, their families and friends. The killing or shooting of any innocent person diminishes us all.

The Associated Press reports that 23 percent of recent high school graduates nationwide can’t pass the Army’s entrance exam. Figures varied widely by state. In Colorado, for example, the figure was less than 20 percent while Hawaii had an ineligibility rate of almost 40 percent. The exam consists of basic math, science and reading questions. To make matters even worse, the Marines, Air Force, Navy and Coast Guard all require a higher passing score than the Army does.

The Education Trust, a children's advocacy group, says that the study examined scores of 350,000 high school graduates, ages 17 through 20, who took the Army entrance test between 2004 and 2009. This is the first time the Army has publicly released this test data.

Equally alarming is the fact that 75 percent of applicants, 17 to 24 years of age, don’t even qualify to take the test because of physical unfitness, a criminal record, or failure to graduate from high school.

As one might expect, both educators and the Defense Department expressed concern that our nation’s high schools are turning out graduates who can’t pass such a relatively easy test of basic skills. And while current recruitment goals are being met, there is a potential for a decline in our military readiness, according to the group Mission: Readiness, a coalition of retired military leaders.

Irrespective of one’s views on the political issue of whether or not the U.S. needs a large military presence in today’s world, it is nevertheless a sad commentary on our education system that it apparently requires less knowledge to graduate from high school than it does to get into the Army. If this is true, as it appears to be, what kind of civilian labor force can we reasonably expect?

As a first step in attempting to solve the problems, shouldn’t we all demand higher standards from our school boards, school administrators and teachers? Or should the Army just make its entrance exam easier? Just a perverse thought.

Back on July 6, 2010, we blogged here about the dismissal by a Denver, Colorado District Court Judge of serious felony charges against a defendant based on the fact that a Denver police officer apparently lied in an arrest warrant affidavit. We wondered at that time whether or not the officer involved would be disciplined or charged criminally for his under-oath departure from the truth.

The case had now taken a strange turn.

A Denver grand jury recently investigated the series of possibly racially motivated 2009 lower downtown Denver assaults and robberies, in which the defendant mentioned in our July 6 article purportedly was involved. Unnamed police sources say that the grand jury decided not to charge the involved police officer with perjury or other possible criminal activity. The grand jury did, however, decide to issue a written report, which state law allows it to do.

Here’s the twist: The Denver District Court judge supervising the grand jury has decided to seal the grand jury’s report. Even stranger still, the judge sealed her own order explaining why she had sealed the grand jury report. Thus, we don’t know what the grand jury said about the incidents or even why the judge won’t permit us to know.

The specially appointed district attorney assigned to work with the grand jury vowed to appeal the judge’s sealing orders. He said that nothing like this had ever happened to him before, and that the orders frustrated the public’s right to know.

We hope the judge --who is a legal scholar-- had some compelling reason for her action. We won’t know the reason until an appellate court rules on the matter. And if the appeals court upholds the sealing orders, we may never know.

Stay tuned.

The Globe and Mail, Canada’s fourth largest newspaper, has selected Denver, Colorado as the best city in the world for holding a business convention.

The selection panel consisted of airline chiefs, frequent fliers, meeting experts and business travel pros.

According to Zane Kerby, senior VP of the National Business Travel Association, Denver’s central U.S. location, cheap flights into DIA, and the proximity of most hotels to the Colorado Convention Center all were factors in choosing Denver. In addition, Denver’s travel taxes – a measure of accommodation, rental car and airport taxes – are among the lowest in the U.S

New York City was picked as Best for Business over all. Other categories and selections were: Pro-business (Sao Paolo, Brazil), Best Sightseeing (Istanbul), Most Exotic (Mumbai, India), Best Buzz (London), Freshest Downtown (Los Angeles), Best Comeback (New Orleans), City to Watch (Shenzhen, China) and Best Music Scene (Nashville).

Bottom line: Denver is among some pretty good company.

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