Bankrupt Banker

Brett Travis Wynne used internet banking facilities to transfer the money in 72 transactions from December last year.

Brett Travis Wynne used internet banking facilities to transfer the money in 72 transactions from December last year.

A finance broker has been charged with stealing more than $23,000 from his employee in the Perth suburb of Northbridge.Police allege 23-year...

FBI has found a large number of counterfeit Cisco Routers in active production at secure US Military and Intelligence facilities.

FBI has found a large number of counterfeit Cisco Routers in active production at secure US Military and Intelligence facilities. The origin...

Wesley Snipes says he will appeal against a three-year jail term

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5fqNNRNrAACr5bimUDaVgdN2LHEapIZc-_B-RVdY1TxAF21S74g8IIVH6FOIoGMZ2cdJmw2eLOSZp3z7IfYDpf0i5OdCHSdNHCWfKnrjznMfmPd_TdoIR5EkzEzAixkCA3YTKNUH6Fn3v/s1600-h/Wesley-Snipes-2008042509083003hg2.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5193289486477855746" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5fqNNRNrAACr5bimUDaVgdN2LHEapIZc-_B-RVdY1TxAF21S74g8IIVH6FOIoGMZ2cdJmw2eLOSZp3z7IfYDpf0i5OdCHSdNHCWfKnrjznMfmPd_TdoIR5EkzEzAixkCA3YTKNUH6Fn3v/s320/Wesley-Snipes-2008042509083003hg2.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> actor Wesley Snipes says he will appeal against a three-year jail term for failing to lodge tax returns from 1999 to 2004.US Federal Court judge William Terrell Hodges laid down the harshest possible sentence against Snipes, after the star of such movies as Demolition Man and the Blade trilogy of vampire movies was found guilty by a jury in February on three misdemeanour charges.US Attorney Scotland Morris, who argued the Government's case, said Snipes owed more than $US20 million ($A21 million) in back taxes and penalties.The actor made a $US5 million payment to the Internal Revenue Service (IRS) on Thursday but Mr Morris dismissed it as "a fraction of what he owes"."Snipes' long prison sentence should send a loud and crystal-clear message to all tax defiers that if they engage in similar tax-defier conduct, they face joining him and his co-defendants … as inmates in prison," said Nathan Hochman, an official at the Justice Department's tax division.IRS commissioner Douglas Shulman said: "The law is very clear: people must pay their taxes. There is no secret formula that eliminates a person's tax obligations, nor are there any special exceptions."Lawyers for Snipes, 45, said they would appeal."We were hoping for a complete acquittal," lawyer Linda Moreno told reporters. "I have faith in the process and I have faith in the jury system. We will appeal."Another defence lawyer, Carmen Hernandez, said: "Mr Snipes was sentenced because he's Mr Snipes." Judge Hodges denied that Snipes' celebrity was in any way linked to the sentence.The actor's lawyers asked Judge Hodges to allow Snipes to be sent to a prison close to his home in the north-eastern state of New Jersey. The judge said he would consider the request.A martial arts fanatic, Snipes is famous for inserting quotations from Sun Tzu's The Art of War into his characters' roles.Snipes, who has appeared in about 50 movies, also starred in White Men Can't Jump and Spike Lee's Jungle Fever.During the day-long hearing the actor apologised to the court for his actions.Ms Hernandez argued that Snipes in August offered to plead guilty to one misdemeanour and pay the back taxes to avoid prison time, but prosecutors had demanded he admit to a felony, a harsher crime.

Wesley Snipes says he will appeal against a three-year jail term

actor Wesley Snipes says he will appeal against a three-year jail term for failing to lodge tax returns from 1999 to 2004.US Federal Court j...

Wesley Snipes was given the maximum sentence possible

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeFTRQ1Mv6TU_9a7-4CQFvTXpFhE1bxf91W1GsVnLvy-oHX4nx7900qOsLqZDlEu3UlEhQwJQotbp_-mu33ZOmVx-qbykaeiMYGs4y0tDygSAUyh9VJwks5zw3WlajtpP0GkKaDNahO5fa/s1600-h/wesley_snipes_mugshot.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5193122815976967138" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeFTRQ1Mv6TU_9a7-4CQFvTXpFhE1bxf91W1GsVnLvy-oHX4nx7900qOsLqZDlEu3UlEhQwJQotbp_-mu33ZOmVx-qbykaeiMYGs4y0tDygSAUyh9VJwks5zw3WlajtpP0GkKaDNahO5fa/s320/wesley_snipes_mugshot.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a>45-year-old Hollywood actor, who has starred in films including Blade, White Men Can’t Jump and Demolition Man, was given the maximum sentence possible after prosecutors described him to a court in Ocala, Florida, as a “truly notorious offender.” He did not have to go to prison immediately but must surrender to custody at a later date. Wesley Snipes was sentenced to three years imprisonment last night for his defiance of the US taxman. Snipes sat expressionless as the sentence was handed down. Asked if he had any reaction, he spread his arms and shrugged. One of his lawyers, Carmen Hernandez, complained: “Mr Snipes was sentenced because he’s Mr Snipes.” The decision by US District Court judge William Terrell Hodges came two months after a jury convicted Snipes on three counts of willfully failing to file federal tax returns from 1999 to 2001. <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7KzhQ7k-FgY7m-pPS1eKDe-q8XTb3cHs4emSLPAIwQl-gEFtlICNr6qm58BftzyZcJrjAxXsYFyStCht4hzOTsMNW6F7vqAFM49nIfyUxl0eKCHp3nKDpCNQNCcfy5oysFJc5nqFfPwUX/s1600-h/wesley_snipes_narrowweb__300x460,0.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5193122820271934450" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7KzhQ7k-FgY7m-pPS1eKDe-q8XTb3cHs4emSLPAIwQl-gEFtlICNr6qm58BftzyZcJrjAxXsYFyStCht4hzOTsMNW6F7vqAFM49nIfyUxl0eKCHp3nKDpCNQNCcfy5oysFJc5nqFfPwUX/s320/wesley_snipes_narrowweb__300x460,0.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> The court heard yesterday that Snipes dodged $15 million (£7.5 million) in tax through a campaign in which he concealed millions offshore, falsely applied for tax refunds and bombarded the Internal Revenue Service with frivolous correspondence that threatened government employees, railed about extortion and used twisted legal interpretations to back his claim that taxation was unlawful. “For nearly a decade, Snipes has engaged in a campaign of criminal tax conduct combining brazen defiance with insidious concealment,” the prosecuting attorney, Robert O’Neill, told the court in a sentencing memorandum. “In the defendant Wesley Snipes, the court is presented with a wealthy, famous and inveterate tax scofflaw. If ever a tax offender was deserving of being held accountable to the maximum extent for his criminal wrongdoing, Snipes is that defendant.” Wearing a black suit and black tie, Snipes — a twice divorced father of five aged from 1 to 19 — clasped his hands together in a gesture of prayer as he arrived at the courthouse. “He is contrite, promises that he will never again break the law, and respectfully asks the court to consider not just the jury verdict but also all the good that he has done in his life,” his attorneys told the judge in a written document. At the hearing Snipes’s lawyers tried to give the court three envelopes with cheques amounting to $5 million, but the judge and prosecutor said that they could not accept them. An official of the Internal Revenue Service collected the money during a recess. Snipes’s big-screen career took off in 1987 after he caught the eye of the film director Spike Lee for his role as a gang leader in the Michael Jackson music video Bad. He went on to star in more than 40 films, taking roles that range from a crusading vampire to a jazz saxophonist. But his belated contrition and celebrity failed to impress Judge Hodges, despite written pleas for leniency from 31 character witnesses including fellow acting stars Woody Harrelson and the Academy Award-winning Denzel Washington. “Wesley is like a tree — a mighty oak . . . Many who know him have witnessed the fruit of his labours, have sat in his shade and even been protected by his presence,” wrote Washington. Harrelson called Snipes “a true citizen of the world” and said: “He strives for rightness in all his relations.” Snipes’s tax advisers, Eddie Ray Kahn — who has previous convictions for tax crimes — and Douglas Rosile were also jailed, for ten years and 54 months respectively. Snipes was cleared of more serious tax fraud charges in February. But Mr O’Neill warned supporters against describing that acquittal as a victory. “By virtue of his fame and his high-profile campaign of tax defiance, Snipes has become the public face of a movement whose members seize upon the slimmest of threads to justify their obstructive tactics,” he stated.

Wesley Snipes was given the maximum sentence possible

45-year-old Hollywood actor, who has starred in films including Blade, White Men Can’t Jump and Demolition Man, was given the maximum senten...

Health Visions Corp., pleaded guilty to mail fraud, was ordered to liquidate all assets within 10 months and give the proceeds to the U.S. government

federal judge on Thursday ordered a Philippines company to pay back $100 million it swindled from the U.S. military's health insurance program. Health Visions Corp., which pleaded guilty to mail fraud, was ordered to liquidate all assets within 10 months and give the proceeds to the U.S. government.Federal prosecutors say the company bilked the military's Tricare program out of $99.9 million between 1998 and 2004. The program insures 9.2 million current and retired servicemen and dependents worldwide.The company routinely inflated claims by more than 230 percent, operated a phony insurance program and billed for medical services never delivered, court records showed, and the Pentagon moved slowly to uncover the scheme.Assistant U.S. Attorney Peter Jarosz described Health Visions as the biggest violator yet in a long-running investigation into Tricare fraud in the Philippines. "This is basically a death sentence for the company. It will no longer exist and that will protect the Tricare program since it was the biggest violator," he said after the hearing. "We got what we needed out of this prosecution." The United States closed its military bases in the Philippines in 1992 and withdrew its active-duty forces, but thousands of retirees remained.Formed in 1997, Health Visions owned and operated hospitals and clinics in the Philippines and billed Tricare on behalf of other health care providers.On top of the $99.9 million in restitution, U.S. District Judge Barbara Crabb ordered the company to forfeit an additional $910,000 and pay a $500,000 fine.Health Visions will be required to sell off land, office buildings and hospitals in the Philippines and an airplane and houses in the U.S. under Crabb's order. The company has run into problems selling hospitals because of ownership disputes, and Jarosz said it was uncertain whether the U.S. government would ever recover the full amount.The company's lawyer, Christopher Kelly, declined to comment. He told Crabb he had nothing to add beyond a plea agreement, which was unsealed on Thursday.Health Visions and its former president, Thomas Lutz, were hit with a 75-count indictment in 2005.Lutz, a U.S. citizen who turned 41 on Thursday, has pleaded guilty to his role in a kickback scheme and could face up to five years in prison when he is sentenced. A date for that hearing will be scheduled shortly now that the company has been sentenced, Jarosz said.The case has been an embarrassment to the Pentagon, where different branches have blamed one another for allowing the company's fraud to slip through the cracks.The fraud was so extensive that claims from the Philippines increased by 2,000 percent between 1998 and 2003 even as the number of Tricare beneficiaries remained the same. Payments to the country went up from less than $3 million to more than $60 million during that time.The Office of Inspector General has criticized Tricare's managers for waiting years to cut off payments to Health Visions after suspecting the company of fraud.William Winkenwerder, former assistant secretary of defense for health affairs, said Thursday that the inspector general's office was partly to blame because it refused his requests to send additional investigators to the country. He said he worked hard to stop the problems after they came to his attention in 2003.Asked how the company was able to defraud the program of $100 million, Winkenwerder said: "There were some very deceptive practices that were occurring. The fact that this was a faraway location did add to the challenge of uncovering problems. And they didn't get away with it ultimately, which is the good news."The investigation has been handled by prosecutors in Wisconsin because WPS Health Insurance, a Madison company, is the subcontractor that handles most overseas claims. About three dozen others have been indicted, mostly U.S. military veterans and Philippine doctors.

Health Visions Corp., pleaded guilty to mail fraud, was ordered to liquidate all assets within 10 months and give the proceeds to the U.S. government

federal judge on Thursday ordered a Philippines company to pay back $100 million it swindled from the U.S. military's health insurance p...

Protect the movies, say NO to piracy

Martial arts mega-celebrity Jackie Chan is putting his star power to work against film piracy in China, an industry executive says.The huge ...

Four laptops containing personal details of 10,000 people have been stolen from the Bank of Ireland

Four laptops containing personal details of 10,000 people have been stolen from the Bank of Ireland (BOI). The Data Protection Commissioner in Ireland is investigating the thefts.Data on the four laptops is not thought to have been encrypted, and BOI will now begin a process of encryption of data on its laptops.As well as names, addresses and financial details of customers the computers contained some medical records because they were part of the bank's life assurance business.Though the thefts of the laptops occurred last year between June and October the Data Protection Commissioner was not told until last Friday morning. The Commissioner has launched an investigation."The investigation will focus on the justification for the personal data, including sensitive medical data in some cases, being placed on the laptops in the first place, the security arrangements in place and the exact circumstances which led to the delay in the reporting of this matter internally within the Bank of Ireland to the appropriate personnel for the taking of further action," said a statement from the Commissioner."Consideration will then be given as to what further action will be sought from Bank of Ireland to ensure that the obligations contained in the Data Protection Acts in this area are met. The Data Protection Commissioner and the Financial Regulator are cooperating on this matter and we will refer any relevant issues to the Financial Regulator," it said. BOI said that the information concerned people who had taken out life assurance or received a quote at seven branches, which it named.Financial organisations possess huge amounts of personal data on customers and are amongst the more at risk companies from data theft or loss.The UK Information Commissioner's Office (ICO) said this week that half of the 28 data security breaches in the private sector that have been reported to it since last November have involved financial services companies.Earlier this month one of the world's biggest banks, HSBC, lost a computer disc with the policy details of 370,000 people on them in the UK.Customers lost £3.3m due to failures by Norwich Union to manage customer data effectively. The company was fined £1.26 million by the financial regulator the Financial Services Authority over the 2006 lapse.

Four laptops containing personal details of 10,000 people have been stolen from the Bank of Ireland

Four laptops containing personal details of 10,000 people have been stolen from the Bank of Ireland (BOI). The Data Protection Commissioner ...

Heather Taylor pleaded guilty to one count of fraud in British Columbia provincial court for an amount totalling $3,197,795

Heather Taylor pleaded guilty to one count of fraud in British Columbia provincial court for an amount totalling $3,197,795, which included $2,801,028 for payroll source deductions that weren't remitted to the government and a further $396,767 in GST.An agreed statement of facts showed that Taylor and her husband, James Taylor, financed a lavish lifestyle, withdrawing more than $1.7 million from their companies from 2000 to 2003 while claiming modest incomes. BETWEEN MAY, 2000 AND APRIL 2003, THE COUPLE SPENT: $248,208 on miscellaneous items. $227,490 on travel. $168,127 on home furnishings and house wares. $142,500 for the rental of an 8,000-square-foot (743 square metre) oceanfront house in West Vancouver with an indoor swimming pool. $117,630 on restaurant meals. $100,889 on clothing, accessories and jewelry. $28,111 on wine. $36,200 for a nanny/housekeeper. For two of those years, the couple each claimed incomes under $35,000, and during the other two years they didn't file personal tax returns. In 2000, Heather Taylor reported total income of $17,800, and in 2001, income of $31,200. Her husband, who claimed he made support payments of $16,800 relating to a previous relationship during both those years, reported a total income after that was deducted of $30,000 in 2000 and $31,900 in 2001. A Canada Revenue Agency (CRA) investigation found that Heather Taylor was in charge of bookkeeping, payroll, and had responsibility for dealing with the CRA for several concrete forming companies operated by the couple. Of the eight companies listed in the agreed statement of facts, James Taylor's father Donald Taylor was the sole director of one, Corewest Forming Ltd. But as with the other seven companies, Heather Taylor was found to have signing authority of that company's bank account and managed the financial affairs.According to the statement submitted to court, employees were hired and paid to complete projects, leaving the company legally liable to withhold source deductions and to remit the employers' contributions for such items as federal income tax, Canada Pension Plan contributions, and employment insurance premiums.The companies were also subject to GST regulations, in which they would have to remit net GST they collected, subject to GST credits that could be claimed based on GST paid out in business activities.Taylor was convicted of one count of fraud covering two categories for failure to remit payments to the government: Payroll remittance fraud and GST fraud.

Heather Taylor pleaded guilty to one count of fraud in British Columbia provincial court for an amount totalling $3,197,795

Heather Taylor pleaded guilty to one count of fraud in British Columbia provincial court for an amount totalling $3,197,795, which included ...

Virendra Rastogi,Anand Jain ,Gautam Majumdar convicted of conspiracy to defraud

Virendra Rastogi (39), Anand Jain (43) and Gautam Majumdar (57), ex-directors of metal trading business RBG Resources, were convicted at London's Southwark Crown Court of conspiracy to defraud and remanded to custody this week. Judge James Wadsworth told the three they could expect 'long prison terms' when he sentences them on June 5. The conviction came at the end of a long drawn out international investigation. When investigators from the Serious Fraud Office (SFO) swooped on Rastogi in his Mayfair apartment here in 2002, he was found shredding wads of documents. For six years, Rastogi reportedly conned banks into funding non-existent metal trading deals using 324 fake companies that turned out to be based in small flats and shops, with few assets beyond a table and chair. The address of one company turned out to be a cowshed in India and another was a launderette in America. Hundreds of millions of dollars and pounds circulated around the globe on the instruction of the conspirators. "This was a sophisticated and complex enterprise; it continued for over four years, in increasing amounts and fooled not only the banks (who undertook their own due diligence) but also the auditors," the SFO said after they were convicted. It was an audacious fraud, underpinned by a very small amount of genuine business, which could be used to give credence to the wider claims of the businesses, the SFO added. RBG went in to liquidation in 2002, but in the years before its collapse, it was presented to its bankers, auditors and regulatory exchanges as an aggressively developing and successful business. "The truth was in stark contrast to this impression. Banks in the UK and elsewhere were persuaded to provide extensive financial facilities to RBG effectively secured against debts due to RBG from sales to customers," the SFO said. In the event these debts proved valueless as the transactions were not, as the banks believed, with independent third party customers but with companies, controlled by the Rastogi family around the world, it said. The fraud was discovered during investigations by the liquidators and the SFO, which also involved the Southern District of New York US Attorney's Office and FBI in the USA as well as Department of Justice and Police in Hong Kong. RBG's sister company Allied Deals which was run by Virendra Rastogi's brother Narendra, comprised the other half of a worldwide fraud, perpetrated for the benefit of the Rastogi family. RBG obtained funding from banks in UK and Europe, while ADI obtained funds from US banks which was all put into a common 'pot' for the use of the conspirators to support their own lifestyles. The SFO termed the case as a "huge enquiry" that required worldwide investigations and the co-operation of the governments of a number of jurisdictions. Vast quantities of documents and electronic material were inspected, reviewed and analysed, including a warehouse of material from Hong Kong and at least 2000 boxes of material from the USA.

Virendra Rastogi,Anand Jain ,Gautam Majumdar convicted of conspiracy to defraud

Virendra Rastogi (39), Anand Jain (43) and Gautam Majumdar (57), ex-directors of metal trading business RBG Resources, were convicted at Lon...

Deutsche Bank banned staff from visiting brothels on expenses

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWddpw8x3AIOWrrwo0g316i4UUY7LE45kfUyoT57ugEKmZ0cVn5h5FnKZ0MZJRKSFDcD_iCp6fWbK74QNja5CD0XfCFy9TGNj6kkHVVMLAs5Tw3Ed4OQC5T1Ktw00WSffNBSw27WETkorP/s1600-h/2409747636_a38afba4d7.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5191968019530156898" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWddpw8x3AIOWrrwo0g316i4UUY7LE45kfUyoT57ugEKmZ0cVn5h5FnKZ0MZJRKSFDcD_iCp6fWbK74QNja5CD0XfCFy9TGNj6kkHVVMLAs5Tw3Ed4OQC5T1Ktw00WSffNBSw27WETkorP/s400/2409747636_a38afba4d7.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a>Germany's biggest bank today banned staff from visiting brothels on expenses and putting hotel TV porn channels on their company credit card. The crackdown came in new rules issued to executives as Deutsche Bank cuts costs after losing at least £2billion so far in the global credit crunch. "Deutsche Bank does not approve of any adult entertainments and such expenditures will not be reimbursed", according to the memo leaked to news magazine Spiegel. Strapped: Germany's biggest bank is suffering the offset from the subprime lending crisisAccording to Spiegel, the new edict was aimed at senior staff in the bank's communications and social responsibility department. The memo further warns that the bank's credit cards must not be used for such purposes. Whether the ruling was prompted by a recent upsurge in executives seeking erotic relief from subprime deals that have gone bad was not specified. Further belt-tightening at the bank includes prior approval from a boss before a taxi can be taken, a limit of £50 on a business meal and train rides in Germany must all be second class if they are under one hour. Sex, yes, but don't charge us for it: Deutsche Bank warns staff One further stiupulation is that employees stepping off of overnight flights who are expected in work or at a business meeting are now to shower at the airport instead of booking a hotel room to do so. The reason for the memo: apparently there have been "minor infringements" of late which the bank wants to stamp out in hard times.

Deutsche Bank banned staff from visiting brothels on expenses

Germany's biggest bank today banned staff from visiting brothels on expenses and putting hotel TV porn channels on their company credit ...

Enrico Bondi said he would ask for as much as 14 billion euros ($22 billion) from Citigroup Inc.

Parmalat collapsed in December, 2003, in Italy's largest bankruptcy, later disclosing more than 14 billion euros of debt, about eight times the amount reported by its former management. Prosecutors filed charges after discovering that the company had never earned a profit after its stock market listing in 1992, though it reported earnings every year. Chief Executive Officer Enrico Bondi said he would ask for as much as 14 billion euros ($22 billion) from Citigroup Inc. after a court said his company could seek civil damages in a criminal trial against the U.S. bank in connection with the foodmaker's 2003 bankruptcy. Parmalat was admitted as a civil party in the trial in the Italian city of Parma, the company said in an e-mailed statement today. The claims would be in addition to a lawsuit filed against Citigroup for damages in the U.S. Citigroup said in an e-mailed statement that all charges against the bank were ``unfounded.'' ``Here 10 senior executives of Citigroup have been accused of having contributed to the Parmalat fraud,'' said Marco De Luca, a lawyer for Bondi, in an e-mailed statement. ``This was not a matter of a single episode which is coming to trial, but rather something that was a product of the Citigroup organization.'' Under Italian law, individuals can request civil damages during criminal proceedings. Bondi made the filing in his role as the court-appointed administrator who oversaw Parmalat's bankruptcy reorganization. Parmalat was relisted on the Milan stock exchange in October 2005. Bondi won his second mandate as CEO on April 8. ``If the defendants in a criminal trial are found guilty, the judge can award damages to those parties that have filed civil claims,'' said Stefano Putinati, a criminal lawyer based in Milan. Parmalat lawyer De Luca said he'd requested the ``entire amount of the fraud, equivalent to 14 billion euros, precisely because of the exceptional seriousness and causal effect that these matters had on the entire Parmalat fraud.'' Bondi on April 18 was excluded from making civil claims in a Milan trial against four banks, including Citigroup, for market manipulation. Citigroup is facing trial in the U.S. May 5 on claims by Parmalat that it aided and abetted larceny by corrupt insiders at the Italian dairy company. Bondi filed the lawsuit against Citigroup in New Jersey in July, 2004, accusing the U.S. bank of disguising debt and inflating cash flow from operations at Parmalat including raising money through a unit called Buconero, which means black hole in Italian. The cash was subsequently represented as equity on Parmalat's balance sheet. Bondi also accused Citigroup of knowing that Parmalat falsified invoices and of laundering misappropriated funds through its accounts. A New Jersey court last week threw out Bondi's claims of fraud, conspiracy, racketeering and unjust enrichment, narrowing the scope of the case and the damages sought. ``Judges both in the U.S. proceeding and the trial in Milan have radically reduced the requests advanced by Parmalat,'' Citigroup said in the statement. ``In the U.S. the damages requests have been radically reduced and in Milan Parmalat was excluded from the trial altogether.'' Investors have bought Parmalat shares on speculation they may benefit from legal settlements and have demanded the company loosen its limits on dividend payments. Bondi has collected more than 1 billion euros in settlements to date after filing charges against the dairy company's former lenders. ``The bottom line is that Citigroup is going to be taken to court and Parmalat could get several billion dollars from them,'' Alessandro Frigerio, a fund manager at RMJ Sgr in Milan, told Bloomberg Television. Frigerio does not hold Parmalat shares but is considering adding them.

Enrico Bondi said he would ask for as much as 14 billion euros ($22 billion) from Citigroup Inc.

Parmalat collapsed in December, 2003, in Italy's largest bankruptcy, later disclosing more than 14 billion euros of debt, about eight ti...

Michael Beker and former senior vice-president Arie Prilik face two counts each of wire fraud and one count each of conspiracy to commit wire fraud,

The charges related to an alleged attempt to defraud the U.S. Army's Tank-Automotive and Armaments Command (TACOM), a military unit responsible for equipping and training the Iraqi army, the Justice Department said.The alleged scheme could have resulted in the U.S. military overpaying $11 million US, the department said. Toronto-based Newcon Optik Ltd., chief executive Michael Beker and former senior vice-president Arie Prilik face two counts each of wire fraud and one count each of conspiracy to commit wire fraud, the Justice Department said in a news release.Newcon Optik and Beker also have each been charged with one count of money laundering."All allegations of wrongdoing are denied," criminal lawyer Brian Heller told CBC News. "This case, as you know, is before the courts, where I can assure you, it'll be vigorously defended. We look forward to a favourable resolution." Heller, who is representing Beker and Newcon, declined to provide further comment. As part of the scheme, a Newcon competitor was allegedly paid to withdraw from supplying TACOM with night vision goggles, creating an opening for another company to step in and supply TACOM with the equipment at a substantially inflated price, the department said. An initial $50,000 US payment was made to the rival firm, the department said.Thomas Barnett, assistant attorney general in charge of the Justice Department's antitrust division, said in the release that his unit "remains committed to detecting and prosecuting those who corrupt the defence procurement process at the expense of the U.S. military and the American taxpayer."20-year prison sentences possibleIf convicted on the conspiracy count, Beker and Prilik each face up to 20 years in prison for the wire fraud counts and up to five years in prison and a $250,000 US fine each, the department said. Beker, who's also known as Mendel Beker, faces imprisonment for up to 20 years and a fine of up to $500,000 US if convicted of the money laundering charge, the department said.The Justice Department said both men were arrested by the York Regional Police earlier this month. Insp. Tom Carrique said police were assisting the United States through Interpol and Canada's Public Prosecution Service, which is handling the extradition case.Beker, 57, of Thornhill, Ont., was arrested April 11 and released on bail, he said. Prilik, 40, also of Thornhill, was arrested April 18 and was expected to attend a bail hearing Monday in Toronto, he said.

Michael Beker and former senior vice-president Arie Prilik face two counts each of wire fraud and one count each of conspiracy to commit wire fraud,

The charges related to an alleged attempt to defraud the U.S. Army's Tank-Automotive and Armaments Command (TACOM), a military unit resp...

European stocks fell the most in a week after record oil prices dimmed the earnings

European stocks fell the most in a week after record oil prices dimmed the earnings outlook for airlines and carmakers and a slowing housing market weighed on Schneider Electric's sales. Air France-KLM and Daimler slipped the most in a week after crude climbed above $US117 a barrel. Schneider Electric, the world's biggest maker of circuit breakers, posted its biggest drop since January as sales missed analysts' estimates. Royal Bank of Scotland led banks lower after saying it may sell shares to shore up capital, while Barclays declined on a Merrill Lynch downgrade. Europe's Dow Jones Stoxx 600 Index lost 1.2% to 316.96, extending this year's decline to 13% on concern that rising energy costs and $US290 billion in writedowns and credit losses at financial companies will cut profit growth. ''Oil prices account for a large proportion of costs for many companies,'' said Chirin Gill, a fund manager at Daiwa SB Investments in London, which has about $US60 billion. ''Prices are likely to be stronger for longer, which is hurting the stocks.'' European companies will see their earnings shrink in 2008 for the first time in six years, according to analysts' estimates compiled by Bloomberg. Profit for companies in the Stoxx 600 may drop 0.5%, the data show. That's down from 11% growth forecast at the end of last year.

European stocks fell the most in a week after record oil prices dimmed the earnings

European stocks fell the most in a week after record oil prices dimmed the earnings outlook for airlines and carmakers and a slowing housing...

Ronald J. Martineau pleaded innocent in Lawrence District Court last week to charges of filing a false motor vehicle insurance claim and larceny

An employee of Martineau's Towing Service created bogus invoices for towing and rental costs totaling $11,000 after a company vehicle was involved in a crash a year ago, police said. A tractor owned by Martineau's was involved in a head-on accident on Haverhill Street on March 6, 2007.But Martineau's used its own vehicle to tow the tractor away and a replacement tractor to transport the trailer to its destination. It didn't pay other companies to tow the damaged vehicle or to replace it — as claimed in phony invoices that it faxed to Plymouth Rock Assurance Corp.Plymouth Rock insured the at-fault driver who crossed into the path of tractor driver Ronald J. Martineau, police said.Martineau, 44, of 7 Leonard Ave. in Salem, N.H., pleaded innocent in Lawrence District Court last week to charges of filing a false motor vehicle insurance claim and larceny over $250.If convicted on each count, Martineau could receive up to five years in state prison. He could also be fined up to $25,000 for the larceny charge and up to $10,000 for insurance fraud.Martineau declined to comment, citing the advice of his lawyer. Methuen attorney Peter Carrozza, who was hired to represent him, did not return a reporter's telephone call.Court documents show that Methuen police Detective Michael Blanchette cracked the case, working with a fraud investigator for Plymouth Rock. Blanchette has been the Methuen officer assigned to work on auto insurance fraud cases in recent months after the city began working with Lawrence's auto insurance fraud task force. The task force wasn't involved in this case.Martineau was not arrested. Instead, he was issued a court summons to be arraigned last week.The owners of the two companies that provided Martineau's with the invoices have not been charged and have given statements to police about their involvement.Blanchette began his investigation in April 2007 after receiving a complaint from a Plymouth Rock investigator.An employee for the towing company contacted Plymouth Rock, alleging that "Ron Martineau obtained blank tow invoice slips from Bauchman Towing Co. of Windham, N.H., and fraudulently completed them," Blanchette wrote in his report."These slips were for tows that were never made by Bauchman Towing Co.," the detective quoted the Martineau's employee as saying. When confronted by Blanchette, Brian Bauchman, owner of Bauchman Towing, admitted his company never towed anything — contradicting what he initially told police. He also admitted he provided Martineau's with invoices used in the fraudulent claim, the detective wrote in his report.Blanchette's investigation determined the phony invoices also included several from a Haverhill-based company, SDJ Services, for rental of a tractor to replace the one damaged in the accident. The detective noted in his report that the informant who worked for Martineau's "further stated that Martineau's had contacted the owner of SDJ Services, who was a friend, and asked him to print up some fraudulent invoices which would show that Martineau's rented a tractor within certain dates, so they could submit them to the insurance company."Gerald Dallaire of Methuen, owner of SDJ Services, denied that any of his company's invoices were fraudulent. He told Blanchette that Martineau had called him requesting that SDJ have a tractor on standby for Martineau's in case one was needed.Dallaire said he could not recall any of his rental trucks being dropped off at Martineau's or being picked up at his Haverhill office by Martineau's, according to the court document filed last week.Key testimony in the prosecution's case is a statement from a Martineau's driver who gave this account:Martineau's towed the damaged tractor back to its shop. The driver said he drove a tractor owned by Martineau's back to the accident scene, hooked up the trailer, and then proceeded with the delivery that Ronald Martineau was making just before the crash."He related that the trailer was never towed back to Martineau's facility right after the accident, as one of the fraudulent Bauchman Tow invoices states," Blanchette wrote in his report."(The driver) also stated he never towed the damaged tractor to Pepperell (Mass.) and to his knowledge, Martineau's Towing never leased or rented a tractor to replace the tractor involved in Ron's accident," the detective noted.Blanchette said he contacted Ronald and Raymond Martineau to be interviewed. But both declined.Ronald is listed as the secretary of Martineau's Towing & Recovery Corp. Raymond is listed as the treasurer of the company, based at 27 Haverhill St.

Ronald J. Martineau pleaded innocent in Lawrence District Court last week to charges of filing a false motor vehicle insurance claim and larceny

An employee of Martineau's Towing Service created bogus invoices for towing and rental costs totaling $11,000 after a company vehicle wa...

Medicines were stolen from 20 pharmaceutical warehouses and pharmacies during 2007. Some of the stolen drugs reached the public

Medicines were stolen from 20 pharmaceutical warehouses and pharmacies during 2007. Some of the stolen drugs reached the publicThe pharmaceu...

Raheel Mirza was jailed for two years at Liverpool Crown Court.

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNh77RLtlO2BIMGmiWrTlcZCxWw4Weu5vUeV38utsubikcXNs6AxpGFau4H1o0PtnqqzBOPr7gOEFyDXwtUKmKLwFtqAZ8w6bPCq4clbuszEeinLCHAIR0DfsGU-BYKpyZ34F-KXjcr2LL/s1600-h/TH1_144200833WIG001_002_12-04-08_142320.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5189183473624288082" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNh77RLtlO2BIMGmiWrTlcZCxWw4Weu5vUeV38utsubikcXNs6AxpGFau4H1o0PtnqqzBOPr7gOEFyDXwtUKmKLwFtqAZ8w6bPCq4clbuszEeinLCHAIR0DfsGU-BYKpyZ34F-KXjcr2LL/s320/TH1_144200833WIG001_002_12-04-08_142320.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> Raheel Mirza was the last person to be sentenced as part of Operation Troy. He was jailed for two years at Liverpool Crown Court. Mirza, 23 and from London, pleaded guilty to conspiracy to defraud at an earlier hearing.Last month 12 people were sentenced to a total of more than 50 years in prison after Mirza was kidnapped from the Atherton area and held for 10 days before being released.The kidnap was in retaliation for a chip and pin card fraud scheme at two petrol stations in Greater Manchester. Around £333,000 was obtained from cards cloned at the garages in Wigan and Bolton between November 2006 and January 2007. The operation involved two crime groups, one from London and one from Bolton and Leicester, and resulted in Mirza being kidnapped. Officers are still looking for 26-year-old Sheraz Ali Ahmed in connection with the investigation.His last known address is Monega Road, London, but he is believed to be abroad.

Raheel Mirza was jailed for two years at Liverpool Crown Court.

Raheel Mirza was the last person to be sentenced as part of Operation Troy. He was jailed for two years at Liverpool Crown Court. Mirza, 23 ...

Christopher T. Carr took millions of dollars on behalf of F&S Fuel when he knew the company couldn't deliver on its prepaid contracts,

Connecticut is suing a former oil company president, charging him with defrauding purchasers of home heating-oil contracts, the state's ...

Fred Steinberg, M.D., his imaging centers and related entities in Palm Beach County, Fla., have reached a settlement with the United States

Fred Steinberg, M.D., his imaging centers and related entities have reached a settlement with the United States to resolve allegations of health care fraud, the Justice Department announced today. Under the terms of the settlement, the U.S. recovered $7 million. The settlement resolves allegations that portions of CT scans were not performed, even though the procedures were billed and reported to patients' physicians as if they were done. CT scans, which take detailed pictures of structures inside the body, are often taken using a dye (or contrast material) to highlight certain conditions. In addition to performing CT scans with contrast, scans may also be done without contrast. The bills submitted by Steinberg and his entities to federal healthcare programs, including Medicare, reflected that thousands of CT scans were carried out both with and without contrast, when in reality the CT scans without contrast were not performed. In addition, the government alleged that the Steinberg entities did CT scans and ultrasound exams that were not ordered by physicians and were not medically necessary. The settlement also resolves allegations that financial inducements were paid to physicians for patient referrals, which are prohibited under the Stark law and the Anti-Kickback statute. These inducements took the form of medical directorship, clinical research, employment, facility use and equipment lease agreements that exceeded fair market value or otherwise failed to comply with federal law. "This settlement confirms our vigorous pursuit of allegations of fraud and abuse in federal healthcare programs, against both companies and individuals," said Jeffrey S. Bucholtz, acting Assistant Attorney General for the Department of Justice's Civil Division. "All participants in these programs must abide by the government's requirements for the provision of care and proper billing, and this settlement reflects the importance the Department places on compliance with the law, including those laws governing prohibited financial relationships."

Fred Steinberg, M.D., his imaging centers and related entities in Palm Beach County, Fla., have reached a settlement with the United States

Fred Steinberg, M.D., his imaging centers and related entities have reached a settlement with the United States to resolve allegations of he...

Emeke Agboh was convicted of theft by a governmental contractor Genesis Drug & Alcohol Rehabilitation Center Shiloh Mental Health Services

Emeke Agboh, 39, of Sugar Land, was convicted of theft by a governmental contractor after an investigation by the Attorney General’s Medicaid Fraud Control Unit revealed that Medicaid reimbursed him for drug- and alcohol-related treatment sessions he never performed. The conviction applies to funds stolen through false billing schemes at his two clinics – Genesis Drug & Alcohol Rehabilitation Center ($90,000) and Shiloh Mental Health Services ($110,000). Agboh conducted the billing and reimbursement scheme from July to October 2004 at Genesis and from June 2005 to April 2006 at Shiloh. “This defendant received a five-year sentence for defrauding the taxpayers,” Attorney General Abbott said. “The Medicaid program was billed for services the defendant never rendered. The Office of the Attorney General will continue investigating waste, fraud and abuse in the Medicaid system.” Harris County Assistant District Attorney Kaylynn Williford prosecuted the case. In 2006 alone, Texas spent more than $17 billion to fund its portion of the Medicaid program. To save taxpayer dollars and protect Texas seniors, Attorney General Abbott dramatically expanded the Medicaid Fraud Control Unit. The unit has established field offices in Corpus Christi, Dallas, El Paso, Houston, Lubbock, McAllen, San Antonio and Tyler through authorization and funding from the 78th Legislature. It works with federal, state and local agencies across the state to identify and prosecute those who defraud the Medicaid program.

Emeke Agboh was convicted of theft by a governmental contractor Genesis Drug & Alcohol Rehabilitation Center Shiloh Mental Health Services

Emeke Agboh, 39, of Sugar Land, was convicted of theft by a governmental contractor after an investigation by the Attorney General’s Medicai...

Wally Andersen has not yet entered a plea on four criminal charges

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqo9-c4MjPj_jx9DFIPqnxx7_HoR3-jnvYqJwb-42fg5Ccd3NA5PvuV570QkaUZ5ctF0uDZ7zoJ8TwXGPCQFZd1qsetossL68PPjZngXhD5qQBIGETF_Sazu6zHe-hW-t9ST3w9RG3vbjY/s1600-h/nl-andersen-wally-20050503.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5189179084167711554" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqo9-c4MjPj_jx9DFIPqnxx7_HoR3-jnvYqJwb-42fg5Ccd3NA5PvuV570QkaUZ5ctF0uDZ7zoJ8TwXGPCQFZd1qsetossL68PPjZngXhD5qQBIGETF_Sazu6zHe-hW-t9ST3w9RG3vbjY/s320/nl-andersen-wally-20050503.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> Wally Andersen, who resigned his seat representing Torngat Mountains last September, has not yet entered a plea on four criminal charges, including fraud and fraud on the government.Wally Andersen represented Torngat Mountains in Newfoundland and Labrador's legislature for 11 years. (CBC) Andersen, 56, is not required to enter a plea until a preliminary inquiry is held.In provincial court in St. John's Monday, a date was set for that inquiry. Starting Feb. 25, 2009, arguments will be made as to whether there is enough evidence to send the matter to trial. The inquiry is expected to last four weeks. The Royal Newfoundland Constabulary laid charges against Andersen, three other politicians and a civil servant after Auditor General John Noseworthy released reports in 2006 that showed millions of dollars in questionable spending. Andersen, a minister of Labrador and aboriginal affairs in the Roger Grimes government, had represented Torngat Mountains, a vast district covering much of northern Labrador, for 11 years.Last week, Jim Walsh, a former Liberal tourism minister, also elected trial by judge and jury. A preliminary inquiry in his case is expected to begin in November.The cases of former politicians Ed Byrne and Randy Collins, as well as Bill Murray, the suspended finance director of the legislature, are also moving through the early stages of the court process.

Wally Andersen has not yet entered a plea on four criminal charges

Wally Andersen, who resigned his seat representing Torngat Mountains last September, has not yet entered a plea on four criminal charges, in...

Samuel Israel, a co-founder of bankrupt hedge-fund company Bayou Group LLC, was sentenced to 20 years in prison

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYegznWMOTIbXscptpvI-Spvn_XU7fOf5X_HbjvSVZY_LWGNofFGodTtbMc7YTw6b99IxPeTIOp_84Y8USEmRzi2s6rNGtwOY03TkOsZiK67dhGtONtlSvnfaMfU4RlmSLAXDs4OKZEevJ/s1600-h/data.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5189178079145364274" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYegznWMOTIbXscptpvI-Spvn_XU7fOf5X_HbjvSVZY_LWGNofFGodTtbMc7YTw6b99IxPeTIOp_84Y8USEmRzi2s6rNGtwOY03TkOsZiK67dhGtONtlSvnfaMfU4RlmSLAXDs4OKZEevJ/s320/data.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> ``I lied to you and I cheated you and I cannot put into words how sorry I am,'' a visibly sweating Israel told investors as he stood before U.S. District Judge Colleen McMahon today in Manhattan federal court. His lawyers had sought leniency, noting Israel's nine back operations, his addiction to painkillers, the rod in his spine and pacemaker in his chest. ``He suffered from these ailments while he did the crime,'' the judge, unmoved, said before pronouncing sentence. ``He can deal with them while he does the time.'' Samuel Israel, a co-founder of bankrupt hedge-fund company Bayou Group LLC, was sentenced to 20 years in prison after pleading guilty to defrauding investors of more than $400 million. The sentence brings to a close the criminal prosecutions stemming from the company's collapse. Bayou filed for bankruptcy in May 2006, prompting lawsuits claiming it operated a ``Ponzi scheme'' that paid old investors with money from new ones. Israel faced as much as 30 years in prison if he was convicted at trial. Based in Stamford, Connecticut, Bayou was among the biggest hedge-fund companies to come under federal scrutiny for missing money since 2000, when Michael Berger was accused of hiding $400 million of losses at his Manhattan Investment Fund. Israel's sentence is among the stiffest given to a white- collar offender in the seven years since Enron Corp. collapsed. Others included former WorldCom Inc. Chairman Bernard Ebbers, who received 25 years for fraud, and former Enron Chief Executive Officer Jeffrey Skilling, who got a 24-year sentence. Bayou's chief finance officer, Daniel Marino, was sentenced by McMahon in January to 20 years in prison. Israel and Marino, who pleaded guilty in 2005, admitted they used fake results and a phony auditing firm to lure investors to participate in the hedge fund. ``Israel volunteered to speak to the government, spoke to the government early, spoke to the government often,'' defense lawyer Barry Bohrer told McMahon before sentencing. The judge responded by pointing out that Israel only cooperated after the Bayou fraud became public. ``After he was caught, he stopped lying,'' the judge said. ``Good for him.'' Israel was sentenced to five years for investor adviser fraud, five years for conspiracy and 20 years for mail fraud. McMahon gave Israel the maximum for each count while allowing him to serve the sentences concurrently rather than consecutively. The judge also allowed him to remain free before his June 9 surrender date. While the U.S. Bureau of Prisons has final say on where Israel will serve his term, his lawyers requested the Federal Correctional Complex Butner, located in North Carolina. The facility has a medical unit. Israel, Bohrer and Assistant U.S. Attorney Margery Feinzig declined to comment after sentencing. Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets and participate substantially in profits from money invested. Globally, managers oversee more than $1.8 trillion, according to Hedge Fund Research. James Marquez, another Bayou co-founder who pleaded guilty, was sentenced to 4 1/2 years in prison. He was found responsible only for $6 million of the fraud. According to Marino's lawyer, Andrew Bowman, Israel told Marino to write a check although Bayou lacked the funds. Marino wrote the check and then penned a six-page confession and suicide note, Bowman said. An investor discovered the documents, leading investigators to the fraud. Marino didn't kill himself. Israel was born in New Orleans into a family known for supporting charitable and civic causes, according to a sentencing memorandum filed by his lawyers. His father ran a commodities business that imported coffee, rubber, shrimp and fertilizer, according to the memo. The family sold the business in 1981 to Donaldson Lufkin & Jenrette Inc. for $44 million. Israel's family moved to Harrison, New York, when he was 16. He attended Tulane University without graduating, according to the court filing, and in a Wall Street job beginning in 1982, worked as a messenger on the New York Stock Exchange floor for Frederic J. Graber & Co. His salary was $16,500. He worked his way up to trader.

Samuel Israel, a co-founder of bankrupt hedge-fund company Bayou Group LLC, was sentenced to 20 years in prison

``I lied to you and I cheated you and I cannot put into words how sorry I am,'' a visibly sweating Israel told investors as he stood...

European banks may have exacerbated financial market turmoil resulting from a global credit crunch by failing to come clean

Some European banks may have exacerbated financial market turmoil resulting from a global credit crunch by failing to come clean about their exposure to risky assets, a top European Union banking supervisor said Tuesday. The Committee of European Banking Supervisors has analyzed 20 big cross-border banks in Europe and is concerned by some of its findings, particularly how the banks value and disclose investments whose markets have dried up because of the credit squeeze. "Our preliminary findings show there are differences in terms of content of disclosure and presentations banks make in statements," Kerstin af Jochnick, head of the committee, told the European Parliament's economic affairs committee. "Lack of consistency in banks' valuations, uncertainty about their accuracy and inadequate transparency may have contributed to the lack of confidence of market participants and exacerbated the market turbulence," said Jochnick, who is also an official with the Swedish banking supervisory body. "We have seen there is still significant stress in the market," she said.

European banks may have exacerbated financial market turmoil resulting from a global credit crunch by failing to come clean

Some European banks may have exacerbated financial market turmoil resulting from a global credit crunch by failing to come clean about their...

HSBC banking group has admitted losing a computer disc with the details of 370,000 customers

The HSBC banking group has admitted losing a computer disc with the details of 370,000 customers. The disc was lost four weeks ago after being sent by courier from the bank's life insurance offices in Southampton. The customers' details included their names, dates of birth, and their levels of insurance cover. However, there were no addresses or bank account details and HSBC said the customers' exposure to potential fraud was limited."We are looking into it and basically it has got lost from A to B," said an HSBC spokesman. "The reinsurer we sent it to is doing a thorough search for the disc. We will do anything we can to find it." "There are no financial details there in terms of banking details. There are no address details or anything like that," he added. As well as name, date of birth and value of the cover, the documents revealed only the customer's policy number and whether or nor the customer was a smoker.” HSBC is claiming that customers’ exposure to potential fraud will be limited. I think that that ‘limit’ will be determined once the investigation has been completed. However, if the disc fell into the hands of professional identify thieves, the potential for fraud will not be limited.

HSBC banking group has admitted losing a computer disc with the details of 370,000 customers

The HSBC banking group has admitted losing a computer disc with the details of 370,000 customers. The disc was lost four weeks ago after bei...

Banks new code shifts responsibility to customers

The latest edition of the Banking Code, the voluntary consumer-protection standard for UK banks, was released last week. The new code claims to “give customers the most up to date information on how to protect their accounts from fraud.” This sounds like a worthy cause, but closer inspection shows customers could be worse off than they were before.Clause 12.11 of the code deals with liability for losses: If you act fraudulently, you will be responsible for all losses on your account. If you act without reasonable care, and this causes losses, you may be responsible for them. (This may apply, for example, if you do not follow section 12.5 or 12.9 or you do not keep to your account’s terms and conditions.)Clauses 12.5 and 12.9 include some debatable advice about anti-virus software and clicking on links in email (more on this in a later post). While malware and phishing emails are a serious fraud threat, it is unrealistic to suggest that home users’ computers can be adequately secured to defeat attacks.Fraud-detection algorithms are more likely to be effective, since they can examine patterns of transactions over all customers. However, these can only be deployed by the banks themselves. Existing phishing schemes would be defeated by two-factor authentication, but UK banks have been notoriously slow at rolling out these, despite being widespread in many other European countries. Although not perfect, these defences might cause fraudsters to move to easier targets. Two-channel and transaction authentication techniques additionally give protection against man in the middle attacks. Until the banks are made liable for fraud, they have no incentive to make a proper assessment as to the effectiveness of these protection measures. The new banking code allows the banks to further dump the cost of their omission onto customers. When the person responsible for securing a system is not liable for breaches, the system is likely to fail. This situation of misaligned incentives is common, and here we see a further example. There might be a short-term benefit to banks of shifting liability, as they can resist introducing further security mechanisms for a while. However, in the longer term, it could be that moves like this will degrade trust in the banking system, causing everyone to suffer. The House of Lords Science and Technology committee recognized this problem of the banking industry and recommended a statutory change (8.17) whereby banks would be held liable for electronic fraud. The new Banking Code, by allowing banks to dump yet more costs on the customers, is a step in the wrong direction.

Banks new code shifts responsibility to customers

The latest edition of the Banking Code, the voluntary consumer-protection standard for UK banks, was released last week. The new code claims...

Veronica Fong,accused of taking the money from the Montgomery Street bank over an eight-year period between 2000 and 2008.

Veronica Fong, 44, appeared in Sydney's Central Local Court yesterday facing 22 charges of obtaining money by deception.Fong, of Baptist Street, Redfern, is accused of taking the money from the Montgomery Street bank over an eight-year period between 2000 and 2008.The mother of one, who started working at the bank in March 1987, was arrested on Tuesday April 8 after the police phoned her and asked her to go to the City Central police station. Fong, who was sacked by the bank this week when the allegations came to light, worked as a client co-ordinator in the private division for most of her career, apart from in 2006 when she was the senior lending officer for specialised mortgage solutions.Her duties included updating and granting temporary overdrafts. She is accused of granting $1,432,071.58 to accounts in her husband's and father's names.As part of her job Fong trained staff and she is said to have accessed the St George banking computer system when her colleagues were logged on in their names. No other staff were aware of the alleged fraud, police said.The alleged offence was detected via a random audit conducted by the bank. Fong did not enter a plea yesterday and she was released on bail after a surety was put up in her name. She is due to appear at Downing Centre Local Court on April 22.

Veronica Fong,accused of taking the money from the Montgomery Street bank over an eight-year period between 2000 and 2008.

Veronica Fong, 44, appeared in Sydney's Central Local Court yesterday facing 22 charges of obtaining money by deception.Fong, of Baptist...

Weserbank AG to stop doing business, making it the first German bank to close since the subprime crisis started.

German financial-market regulator BaFin ordered Weserbank AG to stop doing business, making it the first German bank to close since the subp...

Another airline Bankrupt

Oasis Hong Kong Airlines, a long-haul budget carrier that tried to offer premium service and spacious seats at low prices, suddenly went int...

financial industry in the United Kingdom recently reaffirmed a policy that holds online banking customers liable for losses if they fail to secure

The financial industry in the United Kingdom recently reaffirmed a policy that holds online banking customers liable for losses if they fail to secure their personal computers against data-stealing computer viruses. While this policy may seem surprising or even draconian to some Americans, the reality is that most U.S. consumers remain woefully uninformed as to their own security liabilities when banking online. News of the new U.K. banking codes comes via The Register, which reported that under the new regulations "banks will not be responsible for losses on online bank accounts if consumers do not have up-to-date anti-virus, anti-spyware and firewall software installed on their machines." The full text of the updated banking code is here (PDF). The relevant sections are 12.5 through 12.13. This touches on a question Security Fix receives quite often from readers: "If my computer gets hacked and someone uses it to steal money from my online bank account, will I get that money back?" The answer is that beyond the protections afforded to consumers under the law, whether or not consumers are reimbursed for online banking losses due to computer intrusions is entirely at the discretion of the banks. By law, U.S. consumers can get reimbursed for any funds fraudulently transferred out of their accounts if they notify their financial institution of the bogus debits within 60 days of the transaction first appearing on their bank statement. Provided victims alert their banks within that time frame, their liability is generally limited to $50 (this applies only to consumers; businesses typically aren't afforded anywhere near that amount of flexibility).Check the service agreement tied to nearly any U.S.-based online banking service and you will see roughly the same thing. Take this disclosure, from Bank of America's online banking agreement: "If you do not notify us within these 60 days, you may not be reimbursed for subsequent transactions. Additionally, we will reverse or reimburse you for any bank or payee fees resulting from your loss. You should always guard your Online ID and Passcode from unauthorized use. If you share this information with someone, all transactions they initiate with the information are considered as authorized by you, even for transactions you did not intend for them to make." It remains to be seen whether U.K. banks will enforce the tough new policy on consumer liability. But to be fair, most banks in the U.K. have taken concrete -- albeit hardly foolproof -- steps to employ true two-factor authentication methods for verifying that the person logging into a bank account online is in fact the owner of said account. The same is largely not true for financial institutions in the United States today, and this is principally due to the fact that U.S. banking regulators here haven't required such measures. Rather, they have left it up to the banks to determine their appropriate risk levels and which back-end and customer-facing anti-fraud technologies should be deployed. According to APACS, the U.K. payments association that reports banking fraud and loss statistics for financial institutions there, stricter measures are helping to bring down the cost of online banking fraud. In March, APACS reported that online banking fraud losses totaled £22.6m in 2007 -- a 33 percent decrease from 2006 losses. Unfortunately, it's not possible to correlate that figure with fraud numbers from U.S. banks, because they're not required to report those numbers, and our government sadly does not publish much of the information it does have on the subject (save for the odd internal report that leaks out to the media once in a blue moon).If you think the U.K. rules are too strict, consider the recent actions by some banks in Brazil, a country that has a phenomenally active and organized cyber criminal element that produces some of the world's most advanced malware targeting online banking customers (mercifully, the Brazilian cyber crooks generally stick to picking on their own citizens). I spoke recently with Tony Reyes, founder of the New York-based ARC Group, a company that has set up a shop in Brazil to help at least one financial institution there investigate customers who have had their online accounts cleaned out as a result of cyber cime. Reyes, a former cyber cop for the NYPD, said some of Brazilian banks have taken to investigating the victims of online financial crime."Some of these Brazilian banks are hiring investigators to visit the customer's house and look at the security of their setup, and if [the customer] doesn't have software patches, a firewall and up-to-date anti-virus on his system, in a lot of cases the banks will turn around and say it was the consumer's fault, and [the banks] don't return the money," Reyes said.

financial industry in the United Kingdom recently reaffirmed a policy that holds online banking customers liable for losses if they fail to secure

The financial industry in the United Kingdom recently reaffirmed a policy that holds online banking customers liable for losses if they fail...

British banks will have to take an extra £11 billion from sub-prime losses - in addition to the £9.6 billion write-downs already announced.

A report from the International Monetary Fund (IMF) shows that British banks will have to take an extra £11 billion from sub-prime losses - in addition to the £9.6 billion write-downs already announced. UK lenders are sitting on far larger undisclosed mortgage-related losses than its European counterparts, according to figures in the Global Financial Stability report. In comparison, lenders in the US and the rest of Europe have already revealed their losses. In Europe, top lenders will probably total around £6 billion of additional losses while lenders in the US could report a further £25 billion of write-downs, but that is only half the figure they have already confessed to. Earlier this week, the IMF warned that losses from the worldwide credit crunch could reach $1 trillion (£500 billion). Experts have tried to estimate the cost of one of the worst financial disasters in history but have not exceeded $600 billion. The trillion figure (a million billion) will result in requests for further state intervention to balance credit markets. Commenting on the report, IMF official Jaime Caruana said the credit shock emanating from the US sub-prime crisis is set to broaden amid a significant economic slowdown. With a weakening economy, write-downs and prospects for further losses are placing additional pressure on banks’ balance sheets, which may limit their capacity to lend. Britain is particularly vulnerable to the cash crunch because of its over extended property market, concluded Mr Caruana.

British banks will have to take an extra £11 billion from sub-prime losses - in addition to the £9.6 billion write-downs already announced.

A report from the International Monetary Fund (IMF) shows that British banks will have to take an extra £11 billion from sub-prime losses - ...

More shoes to drop in the credit crisis

Financial Times of London Friday that there are more shoes to drop in the credit crisis if authorities don’t prepare to head them off. One area is credit default swaps: “Instead of reshuffling regulatory agencies, the authorities ought to prepare for the next shoes to drop …. There is an esoteric financial instrument called credit default swaps. The notional amount of CDS contracts outstanding is roughly $45,000 billion … The market is totally unregulated and those who hold the contracts do not know whether their counterparties have adequately protected themselves. If and when defaults occur, some of the counterparties are likely to prove unable to fulfill their obligations. This prospect hangs over the financial markets like a sword of Damocles that is bound to fall, but only after some defaults have occurred … One possible solution is to establish a clearing house or exchange with a sound capital structure and strict margin requirements to which all existing and future contracts would have to be submitted.”

More shoes to drop in the credit crisis

Financial Times of London Friday that there are more shoes to drop in the credit crisis if authorities don’t prepare to head them off. One a...

Bankrupt Banker News Adam Applegarth joined the ranks of chiefs rewarded for spectacular failures when it emerged that he will pocket £760,000

Adam Applegarth joined the ranks of chiefs rewarded for spectacular failures when it emerged that he will pocket £760,000 after being sacked in December as Northern Rock's chief executive.Mr Applegarth's package includes a £2.6 million pension – despite overseeing a £167.6 million loss. A third of the bank's 6,000-plus jobs will disappear as it attempts to rebalance its books and repay £24 billion in government loans by 2010.The pay-off – which gives him £63,333 a month until November– is on top of the £785,000 he earned in 2007 and the £1.36 million in 2006. Vince Cable, the Liberal Democrat treasury spokesman, branded the compensation an "utter disgrace".He said: "This is a straightforward case of reward for failure. The chief executive who led the disastrous business strategy is being generously rewarded for failures of leadership whereas shareholders get nothing and large numbers of workers are being made redundant."Labour MP Kevan Jones, whose North Durham constituency includes many of the workers facing the sack, called on Mr Applegarth to surrender the cash.He said: "I find it incredulous that a man who has already made millions will be paid this amount of money. It will appear to the average person that he is being rewarded for failure."Northern Rock said Mr Applegarth's termination payment, which emerged with the publication of its annual accounts for 2007, was "substantially less" than he was due. But Mr Applegarth will continue to enjoy a staff discount on his mortgage and can reclaim almost £6,000 in legal fees. The accounts also reveal that his home has been fitted with £5,000-worth of security measures since the bank's collapse. He joins the growing number of executives receiving huge pay cheques despite their record in office being held in contempt.Sir John Gieve, the deputy governor of the Bank of England, tops a list of shame compiled by the Taxpayers' Alliance by taking home £234,467 last year – when he was accused of failing to prevent Northern Rock's descent into crisis. Labour MP John McFall said Sir John had been "asleep in the back shop while there was a mugging out front".Health Secretary Alan Johnson suspended a £150,000 pay-out to Rose Gibb, who resigned as chief executive of Maidstone and Tunbridge Wells NHS Trust after an outbreak of Clostridium difficile killed 90 people. Roger Lawson, the chairman of the Northern Rock Shareholders Association Group, said: "A lot of shareholders will be very unhappy with the size of Mr Applegarth's pay-off but it looks like, legally, the company could not have avoided paying that amount. "Had Mr Applegarth taken the company to court then it could have ended up having to pay him even more, so perhaps it has got away with having to pay slightly less than its legal obligation, so I have to be philosophical about it."

Bankrupt Banker News Adam Applegarth joined the ranks of chiefs rewarded for spectacular failures when it emerged that he will pocket £760,000

Adam Applegarth joined the ranks of chiefs rewarded for spectacular failures when it emerged that he will pocket £760,000 after being sacked...

Opes Prime, was put into receivership last week owing $1 billion to lenders.

The corporate watchdog is investigating allegations of fraud and manipulation against the head of Opes Prime, which was put into receivership last week owing $1 billion to lenders. The Australian Securities and Investments Commission (ASIC) is looking into allegations that Opes Prime Chief Executive Laurie Emini instructed staff to falsify the accounts of six wealthy clients to help prevent them from personal losses of up to $200 million, according to a transcript of court documents from a Federal Court hearing last Friday. The collapse of Opes Prime is the biggest of its kind in Australia since the global credit crunch took hold in August last year. Opes Prime's problems stemmed from severe and sustained financial market volatility, which continues to adversely affect some market participants. ASIC sent a special team into Melbourne-based Opes Prime late last week after the group was placed into receivership by creditor Australia & New Zealand Banking Group <ANZ.AX> after "irregularities" in trading accounts were uncovered. A senior ASIC investigator, Richard Vandeloo, told the Federal Court that Opes staff were instructed to falsify trading accounts so that the group's high net worth clients would avoid margin calls, according to the transcript. "Based on conversations of the receiver's staff with employees of the stockbroking company (Thursday), I'm advised that Mr. Emini, over a three month period between December last year and February this year, instructed various staff to make entries in clients of high net worth to avoid margin calls being made...," Vandeloo said. He said that staff were instructed to change the loan-to-value ratio within the group's client portfolio. Traders said this would make the portfolio appear healthier than it was. Vandeloo also said there are allegations that there may have been a "round robin" of stocks to cover the positions of the clients in question. When asked by judge Ray Finkelstein if there was any suspicion that the clients were involved in the alleged falsification of accounts, Vandeloo said: "In relation to ... one client worth A$145 million, there is business connections between Mr. Emini and that particular client." After being pressed by the judge about whether there was any suggestion by staff or the receivers that the clients were involved, Vandeloo said: "Of the six they have only made that suggestion in relation to one." Vandeloo also said there were allegations of the falsification of company records, which could include accounting records. A spokeswoman for ASIC said the investigation is continuing. The comments were made at a hearing where ASIC sought an order preventing Emini from leaving Australia. When Opes Prime was put into receivership it owed ANZ $650 million and Merrill Lynch & Co. a further $350 million, receiver Deloitte said last week. Merrill Lynch and ANZ took control of Opes Prime's shares last week and started selling them off to recoup the loan amounts. Merrill Lynch has largely finished selling shares to cover its loan to the group, a person familiar with the situation said Tuesday. ANZ, which hired Goldman Sachs JBwere to handle the sales, has sold around 25% of the portfolio it received, according to the Australian newspaper. ANZ said last week it doesn't anticipate a material loss from its exposure to Opes. Brokers who did not want to be named, but who have knowledge of the affected stocks, said ANZ took on shares in around 675 companies, including major stocks such as Westfield Group, QBE Insurance Group, Orica and Aristocrate Leisure. An ANZ spokeswoman declined to comment on this matter, as did a spokeswoman for Goldman Sachs JBWere. The ANZ spokeswoman said that the bank continues to realise "solid" value for the shares sold, consistent with the bank's objective to undertake an "orderly unwind" of the portfolio. A number of small and mid-cap companies, including Gindalbie Metals, have requested trading halts in recent days while they clarify the impact of the Opes collapse on shareholders who held shares through the brokerage.

Opes Prime, was put into receivership last week owing $1 billion to lenders.

The corporate watchdog is investigating allegations of fraud and manipulation against the head of Opes Prime, which was put into receivershi...

Deutsche Bank AG, Germany's biggest bank, will write down 2.5 billion euros ($3.9 billion) of loans and asset-backed securities and said markets are d

``Conditions have become significantly more challenging during the last few weeks,'' Deutsche Bank said today in a statement. The Frankfurt-based company's shares, which have declined 17 percent this year, rose on speculation the worst of the losses in the banking industry may almost be over. Deutsche Bank AG, Germany's biggest bank, will write down 2.5 billion euros ($3.9 billion) of loans and asset-backed securities and said markets are deteriorating. Deutsche Bank, which increased earnings in 2007, said a week ago its 2008 pretax profit target is under threat. Chief Executive Officer Josef Ackerman cited ``difficult'' market and economic conditions. UBS AG said today Chairman Marcel Ospel will depart after reporting an extra $19 billion of writedowns. ``The subprime crisis is catching up to Deutsche Bank,'' said Konrad Becker, a Munich-based analyst at Merck Finck & Co. who recommends holding the shares. ``This means that Deutsche Bank is at risk of reporting a first-quarter pretax loss.'' Deutsche Bank rose 2.9 percent to 73.81 euros at 1:05 p.m. in Frankfurt trading. The 60-member Bloomberg Europe Banks and Financial Services Index gained 2.2 percent, cutting this year's decline to 16 percent. ``The immediate stock reaction is hope among investors that we've touched bottom,'' said Derek Chambers, an analyst at Standard & Poor's Equity Research in London who has a ``hold'' rating on Deutsche Bank. ``Deutsche Bank shares are reacting more to the general financial sector trend than anything else.'' Deutsche Bank said today it will cut the value of leveraged-buyout and commercial real-estate loans and residential mortgage-backed securities in the first quarter. Markdowns on assets backed by residential mortgages ``principally'' involve 7.91 billion euros of so-called ALT-A mortgages, which fall between subprime and prime, the bank said. ``The market was prepared,'' said Thomas Nagel, a Frankfurt-based trader at Equinet AG. ``Bank stocks could even being nearing a turnaround because the drops have been exaggerated.'' Ackerman, attending a banking conference in London today, wouldn't answer questions. Deutsche Bank spokesman Christian Streckert cited last week's annual report when asked today about the 2008 pretax profit forecast of 8.4 billion euros, which excludes one-time effects. The bank on March 26 said writedowns and a worsening economy would ``adversely affect our ability to achieve our pretax profitability objective.''

Deutsche Bank AG, Germany's biggest bank, will write down 2.5 billion euros ($3.9 billion) of loans and asset-backed securities and said markets are d

``Conditions have become significantly more challenging during the last few weeks,'' Deutsche Bank said today in a statement. The Fr...

Interpol cracks down on football betting

Another crackdown on Asian football betting syndicates which are said to be “controlling” European major league results is on the cards. With the coming Euro 2008 competition to be held this summer, Interpol is seeking the cooperation of police forces from several Asian countries to carry out raids. Interpol secretary-general Ronald Noble said in Singapore yesterday that Interpol was planning to launch a second operation to curb illegal football gambling in Asia following last year’s success which netted US$680,000 (RM2.24mil) of suspected criminal proceeds. He was quoted by AFP as saying that more countries would be involved in the second operation against football gambling, which was one of the most rampant organised crimes in the region. The first operation, codenamed ”Soga”, was launched last October and involved 266 raids in Australia, China, Hong Kong, Macau, Malaysia, Singapore, Thailand and Vietnam and resulted in more than 430 individuals arrested and 272 underground gambling dens shut down. Speaking at the Global Conference on Asian Organised Crime hosted by the Singapore police force, Noble said the gambling dens that were closed handled an estimated US$680mil in illegal bets worldwide.As an indication of how widespread football gambling is, European football’s governing body UEFA had asked European police to investigate the results of at least 26 matches last year which were suspected to have been manipulated by Asian betting syndicates. Noble said that while the amount of money involved in match-fixing was unknown, UEFA claimed that an overseas syndicate made US$5mil (RM16.5mil) on one championship match alone last July. Malaysian police and the Malaysia Communications and Multimedia Commission (MCMC) are working together to identify syndicates using the Internet to accept football bets. Inspector-General of Police Tan Sri Musa Hassan said a task force has been set up and CID officers were currently monitoring suspected illegal bookmaking syndicates involved in accepting football bets via the Internet. “Syndicates here operate using servers from other countries and that is why it is difficult for us to trace and nab the main culprits. “That is why we have now asked our Asean counterparts as well as other police forces in the Asian region to provide us with information on syndicates linked with our country,” he told The Star. Musa said police here would exchange information with their counterparts worldwide. About 200 participants from various law enforcement agencies of 32 countries, including Malaysia, attended the two-day conference.

Interpol cracks down on football betting

Another crackdown on Asian football betting syndicates which are said to be “controlling” European major league results is on the cards. Wit...

Switzerland's role as secret banker to the world’s wealthy is under threat as never before

Last week The New York Times quoted Konrad Hummler, the managing partner of Wegelin & Company, a small private bank in the canton of St....

plan to rescue thousands of homeowners at risk of foreclosure

<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLaBKWPUkdJB3AvSuWJTfkKMxVJ-akzt44igCrHUd9bclz_kX3sF6wgj4BNB1mErmzIq0HUFk5_mPYe0QzbiU6CCOgAZ1nWOwFQXIHB-gAweZFmbeUfCMT7A0MR_jVq1t7IRLRf37sJJ8/s1600-h/bonds1.jpg"><img alt="" border="0" id="BLOGGER_PHOTO_ID_5184240455433691170" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLaBKWPUkdJB3AvSuWJTfkKMxVJ-akzt44igCrHUd9bclz_kX3sF6wgj4BNB1mErmzIq0HUFk5_mPYe0QzbiU6CCOgAZ1nWOwFQXIHB-gAweZFmbeUfCMT7A0MR_jVq1t7IRLRf37sJJ8/s400/bonds1.jpg" style="float:left; margin:0 10px 10px 0;cursor:pointer; cursor:hand;" /></a> The Bush administration is finalizing details of a plan to rescue thousands of homeowners at risk of foreclosure by helping them refinance into more affordable mortgages backed by public funds, government officials said. The proposal is aimed at assisting borrowers who owe their banks more than their homes are worth because of plummeting prices, an issue at the heart of the nation’s housing crisis. Under the plan, the Federal Housing Administration would encourage lenders to forgive a portion of those loans and issue new, smaller mortgages in exchange for the financial backing of the federal government. The plan is similar to elements in legislation proposed two weeks ago by Barney Frank (D-Mass.), who chairs the House Financial Services Committee, officials said. Administration officials said they believe they can accomplish some of the same goals through regulatory changes, though important details have yet to be nailed down. If enacted, the plan would mark the first time the White House has committed federal dollars to help the most hard-pressed borrowers, people struggling to repay loans that are huge relative to their incomes and the diminished value of their homes. That may offer encouragement to the banking industry and help silence Democrats, who have accused the White House of rescuing Wall Street investment banks while ignoring distressed homeowners. But it could agitate conservatives, who are likely to view the FHA plan as yet another government bailout. Senior officials in several parts of the administration described the plan on condition of anonymity because the specifics are still being worked out. It is unclear when the plan will be formally unveiled, though one official said it was unlikely to happen before the president returns from a trip to Europe next week. “The administration for a long time had the idealists and the pragmatists. And because the market conditions are what they are right now, the pragmatists are looking at this and saying, ‘How can we achieve something?’ And they seem to be having more sway,” said Francis Creighton, vice president for government affairs at the Mortgage Bankers Association, which has been working with Frank on his proposal. The initiative now being crafted could provide relief to a select group of homeowners who are “under water” on their mortgages, a term that describes the situation when falling home prices leave borrowers with negative equity. These homeowners would have to agree to stay in their homes after refinancing, be able to afford the new monthly payments and have lenders who are willing to go along with the plan, officials said. Administration officials have yet to iron out other details, such as how big the new mortgage should be relative to the home’s value. An estimated 8.8 million households currently have negative equity, due in part to the rise of loans that often required no money down. Negative equity becomes a problem when the homeowner can no longer make mortgage payments. If the homeowner had some equity, the loan could be refinanced or the house could be sold. But a homeowner who is under water cannot afford to do those things because the new loan or sale proceeds would not cover the cost of the existing mortgage. Treasury Secretary Henry M. Paulson Jr. signaled in a speech Wednesday that the administration was developing an initiative tailored to this specific problem, saying “the people we seek to help” are those who want to keep their homes but are falling behind on their payments. “If they also have negative equity in their homes, refinancing becomes almost impossible and so workouts become even more important,” he said. He credited Alphonso Jackson, secretary of the Department of Housing and Urban Development, with helping to craft the plan. In a recent report, Merrill Lynch identified negative equity as a prime cause of rising default rates, saying borrowers who already have poor credit records are often deciding it makes sense to walk away from their homes when the values fall. Federal Reserve Chairman Ben S. Bernanke has called on lenders to restructure some loans, arguing that it would be less costly to forgive some debt than to foreclose on the properties.

plan to rescue thousands of homeowners at risk of foreclosure

The Bush administration is finalizing details of a plan to rescue thousands of homeowners at risk of foreclosure by helping them refinance i...

Fire sale at Lehman Brothers Holdings Inc first of many

``We still maintain that we don't need capital, but we've realized that perception is the dominant issue in today's markets,'' Callan said. ``It's a step in the right direction,'' said CreditSights Inc. analyst David Hendler. ``If you're a smaller player, you need more capital to do business in tough times. They now need to show that they can keep churning profits in this environment.'' Lehman Brothers Holdings Inc. is seeking to raise at least $3 billion from a share sale it says should help quell concern about a shortage of capital that drove the stock down 42 percent this year. Lehman is offering 3 million convertible preferred shares in a sale that will be ``an endorsement of our balance sheet by investors,'' Chief Financial Officer Erin Callan said in an interview yesterday. Demand for the stock was three times greater than the amount on sale as of 6:30 p.m. in New York, according to a person familiar with the offering who declined to identified before the sale ends today. Lehman, led by Chief Executive Officer Richard Fuld, fell as much as 48 percent on March 17 on speculation the New York- based firm would face the same cash shortage that broke Bear Stearns Cos. following a run on the company. Merrill Lynch & Co., Citigroup Inc. and Morgan Stanley have also raised cash from investors after more than $200 billion of writedowns and losses tied to the collapse of mortgage markets at the world's biggest financial companies. The 3 million of convertible preferred shares have a coupon of 7 percent to 7.5 percent, according to the person familiar with the offering. The stock fell 2.8 percent $36.66 in New York trading yesterday after the market's official close, while credit- default swaps declined, showing investors believe Lehman's ability to pay debts has improved. Lehman closed at $37.64 during the regular session yesterday. Credit-default swaps tied to Lehman's senior unsecured bonds narrowed 15 basis points after the announcement to 285 basis points, according to broker Phoenix Partners Group in New York. A decline signals improvement in investor confidence. Terms of the deal include a conversion premium of 30 percent to 35 percent above the current stock price, according to people familiar with the offering. Final terms will be set when the sale is completed. The capital increase will provide ``financial flexibility,'' the firm said in the statement. Lehman said on March 18 that it had $30 billion of cash and $64 billion in assets that could easily be turned into cash. The securities firm has access to an additional $200 billion from a Federal Reserve credit facility, according to Prashant Bhatia, an analyst at New York-based Citigroup. Bhatia upgraded his recommendation for Lehman to ``buy'' from ``neutral'' last week, saying the stock price drop was overdone. ``Reality will trump fear,'' Bhatia wrote on March 28. ``Lehman has ample liquidity to run its business.'' The firm's net income declined 57 percent in the quarter, less than analysts estimated, because of a $1.8 billion writedown on mortgage assets. Merger advisory fees jumped 34 percent, investment-management revenue surged 39 percent and equities rose 6 percent. Fuld, 61, has announced plans to cut 5,300 jobs, or 19 percent of the workforce, and closed mortgage units during the past seven months. He also has expanded in Europe and Asia to gain market share in stock trading as part of his initiatives designed to help Lehman grow faster than its peers once markets recover. The firm now ranks as the largest trader on the London Stock Exchange and Euronext. Lehman has risen to fourth from sixth on the New York Stock Exchange and Nasdaq. Its share of U.S. bond trading has increased by 1 percentage point to 12 percent. Bear Stearns, formerly the fifth-largest U.S. securities firm, was forced to sell itself to JPMorgan Chase & Co. this month at a fraction of its market value with financial support from the Fed. Merrill Lynch raised $6.6 billion in January by selling preferred shares to a group including the Kuwaiti Investment Authority and Japan's Mizuho Financial Group Inc. Lehman announced the financing after the close of regular trading on the New York Stock Exchange, where shares finished 23 cents lower at $37.64.

Fire sale at Lehman Brothers Holdings Inc first of many

``We still maintain that we don't need capital, but we've realized that perception is the dominant issue in today's markets,...

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