Investment Fraud on the Rise, Federal Officials Say

Photo Courtesy - Getty Images(WASHINGTON) -- On Monday, Attorney General Eric Holder and representatives from the FBI, Securities Exchange Commission and Commodity Futures Trading Commission announced the results of an operation that has been ongoing since August titled, “Operation Broken Trust,” which highlighted a series of arrests and cases targeting investment fraud. The cases announced Monday ranged from taking down Ponzi schemes and business opportunity fraud, to high-yield investment scams.
The round-up targeted 343 criminal defendants who scammed an estimated 120,000 victims.  The victims suffered approximately $8.38 billion in losses due to the fraud. One example cited in the press conference was Frank Castaldi, who targeted friends and people in his neighborhood in establishing a $77 million Ponzi scheme. One of the victims in the case, Frank Cesare, told local media at the time that he knew Castaldi and his family for 55 years, but lost his entire life savings to him.

FBI Executive Assistant Director Shawn Henry said, "The perpetrators of these crimes are those who you might trust -- hence the term Operation Broken Trust -- friends, colleagues, people you worship with, people in your workplace, people from your kid's soccer team. Criminals have always preyed on the trust of individuals, with offers too good to be true.”

Robert Khuzami, the SEC’s Director of Enforcement, said he feared these types of scams were on the rise: “I do think that we see situations, where as more and more people look to third parties to invest their money, through intermediaries, money managers and the like, you know, the frequency with which we might see these types of schemes arise, I think, is on the increase.”

Copyright 2010 ABC News Radio 


AT&T Named Worst Cell Phone Service Provider  

Photo Courtesy - AT&T, Inc.(NEW YORK) -- AT&T Inc. is the worst-rated cell phone service provider, suffering a significant drop in ratings since last year, according to a new survey of readers of Consumer Reports, the influential product-review publication.

Verizon Wireless, the former top provider, was beaten by U.S. Cellular, a regional carrier in 26 states. The results are based on the opinions of more than 58,000 subscribers who provided feedback on their customer service and overall satisfaction.

Sprint continues to hold its own, scoring better than Verizon Wireless in several categories such as customer service, which had been one of Sprint's weaknesses in recent years. T-Mobile, coming up second to last, rated lower than both Verizon Wireless and Sprint in overall satisfaction, although by only a small margin.

Of the AT&T customers surveyed, more than half owned iPhones. Survey results found that iPhone users are less satisfied than owners of other smartphones with their carrier. The iPhone is now exclusively carried by AT&T, but the company could face competition for the iPhone from Verizon Wireless.

"Our survey suggests that an iPhone from Verizon Wireless, which is rumored, could indeed be good news for iPhone fans," said Paul Reynolds, electronics editor for Consumer Reports. Many users, tweeting reaction to the survey results, wrote, "Surprise, surprise."

AT&T responded in a statement, "We take this seriously, and we continually look for new ways to improve the customer experience."

Copyright 2010 ABC News Radio


Gov't Has Spent About $120 Million on Bills It May Not Be Able to Use

Photo Courtesy - Getty Images(NEW YORK) -- More than 1.1 billion new $100 bills that were set to be released next year have been quarantined in vaults across the country because of a creasing problem.

A person familiar with the matter told CNBC that the bills, produced for about 12 cents each, are the most costly ever made. It appears that the government has spent about $120 million to produce bills it can't use.

In October, the Federal Reserve identified a problem with printing the bills, which have new security measures to prevent counterfeiting. The magnitude of the problem was unclear at the time.

Sources tell ABC News that an initial quality check on a small sample of the new bills by the Bureau of Engraving and Printing determined that "more than half" the new bills were fine and could be distributed. But you don't have to be a Fed economist to realize what that means -- up to 49.9 percent of the bills could be defective.

At this point, the Bureau of Engraving and Printing has yet to determine the cause of the printing errors, according to sources investigating the matter. It could be the paper (supplied by Crane & Co.) or might be the BEP's presses.

Copyright 2010 ABC News Radio


Google Opens eBook Service

Photo Courtesy - Getty Images(MOUNTAIN VIEW, Calif.) -- Google has entered the billion-dollar digital book business with Google eBooks, where users can buy electronic books, read them on most devices and store them on a digital bookshelf.

The service, the company says, “is all about choice, so you can use just about any device you own to read any book, anywhere.”

Google says all of the major publishing houses are participating, so prices are competitive.

Copyright 2010 ABC News Radio


Supreme Court to Review Massive Walmart Class Action Case

Photo Courtesy - ABC News(WASHINGTON) -- The Supreme Court announced Monday it would review whether to allow one of the largest class action suits in history to go forward against retailing behemoth Walmart.

Walmart had asked the high court to step in, arguing that a lower court was wrong to allow the sex discrimination case to go forward as a class certification instead of allowing employees to file on an individual basis.  In briefs, Walmart argued the class size would be "larger than the active duty personnel in the Army, Navy, Air Force, Marines and Coast Guard combined."

Walmart said the class action could include "every woman employed for any period of time over the past decade in any of Walmart's approximately 3,400 stores...the millions of class members collectively seek billions of dollars in monetary relief."

The action stems from a sexual discrimination suit filed by six women who worked in 13 stores who alleged they had been paid less than men in comparable positions, despite having higher performance ratings and greater seniority.

In court papers, lawyers for the women say the case needs to proceed as a class action because Walmart exercised a strong centralized corporate culture, and that class litigation "may be the only means of obtaining the broad injunctive relief necessary to address the allegedly discriminatory policies challenged."

"The average Walmart worker," the briefs say, "simply does not have the capacity to pursue a discrimination lawsuit against her employer."

The women seek injunctive relief, back pay and punitive damages.

Copyright 2010 ABC News Radio


Legal Internet Poker Could Give US Casinos Share of $25 Billion Pie

Photo Courtesy - Getty Images(WASHINGTON) -- More than 2,000 websites currently offer users the chance to wager real cash in games of skill and chance, including poker, according to the American Gaming Association. But most of them are run by offshore companies, industry experts say. Now some lawmakers want to allow U.S.-based casino companies to get into the game -- and a cut of the $25 billion-a-year pie -- by quietly pushing for a change in the law before the end of this year.

A draft bill, first reported by the Wall Street Journal and obtained by ABC News, would legalize online poker playing in the U.S., and establish licensing and reporting requirements for companies, as well as safeguards for consumers. It would also generate tax revenue from wagers, for state and federal governments. Forms of online gambling other than poker would remain prohibited under the bill.

Legalization of online poker forums has long been sought by the U.S. casino industry which says federal gaming regulations have unfairly handicapped their business in a flourishing online marketplace and left American consumers vulnerable.

The Unlawful Internet Gambling Enforcement Act of 2006 indirectly outlawed online gambling in the U.S. by making it illegal to use a credit card or checking account to place electronic bets. But the industry has repeatedly lobbied Congress to clarify the rules and loosen restrictions on some forms of online gaming, including poker.

Copyright 2010 ABC News Radio


Thrift Stores Gaining in Great Recession

Photo Courtesy - Getty Images(NEW YORK) -- Second-hand shops once considered the bottom-of-the-barrel for shoppers are getting a boost as consumers living the great recession discover better inventory and bargains.

Walmart, the world's largest retailer, saw comparable store sales decline by 1.5 percent year-to-date, according to investment research firm Morningstar. Meanwhile, its competitor Target had a soft third quarter with comparable store sales up only slightly by 1.6 percent, according to Morningstar.

On the other hand, the thrift shops are enjoying an expansion of sales and customers.

"Our transaction growth has grown by over 30 percent over the last two years but the bulk has been over the last year," says George Erickson, the Salvation Army's Northern California director of retail, based in San Francisco. "All of these extra transactions had to come from some place -- it's my conclusion that all these customers have stepped down from the Kohl's, Marshalls, TJ Maxx, Macy's and Nordstrom."

Since the start of the recession that has led to more than 8 million lost jobs, The Salvation Army has seen sales grow from $499 million in 2007 to $542 million in 2009.

Copyright 2010 ABC News Radio


Too Late to Score Cheap Holiday Airfare?

Photo Courtesy - Getty Images(NEW YORK) -- It’s not too late to find some holiday travel bargains. Several of the big travel websites boast the best deals, but where do the experts go for their rates?

“We like Kayak…,” Kiplinger’s Personal Finance editor Janet Bodnar said. “It really aggregates a lot of different kinds of travel information so you can get a lot of your work done on that particular site.”

And then there’s vacation rental site, where you can “book your lodging in someone else's home so you don't have to stay in a hotel,” Bodnar said.

Kiplinger’s top carrier? Southwest Airlines, where you can still check two free bags and change your ticket at no additional cost.

Copyright 2010 ABC News Radio


President Obama Pleased with Korea Trade Deal

Photo Courtesy - ABC News(WASHINGTON) -- Calling it a “landmark” deal, President Obama said Saturday he’s “very pleased” with the free-trade agreement the United States and South Korea have worked out.

“This deal is a win for American workers, for farmers and ranchers,” the president announced this afternoon in a statement read from the White House. 

Obama boasted that the deal will contribute significantly to his goal of doubling U.S. exports over the next five years by opening up the Korean market to American aerospace products, electronics, and cars and trucks. 

“In short, the tariff reductions in this agreement alone are expected to boost annual exports of American goods by up to 11 billion. All told, this agreement, including the opening of the Korean service market, will support at least 70,000 American jobs,” Obama said.

The deal now must be ratified by Congress and approved by lawmakers in South Korea.  The U.S. Chamber of Commerce supports passage of the agreement, and its president said in a statement Friday that the lobby organization will do everything in its power to round up the votes needed. 

News of the trade agreement was announced late Friday.

Copyright 2010 ABC News Radio


Google, Groupon Abandon Deal

Photo Courtesy - Getty Images(NEW YORK) -- Google's attempt to buy Groupon came to a disappointing end for the search-engine giant on Friday, The Wall Street Journal reports. Local deals site Groupon, whose name is a combination of group and coupon, was apparently divided over Google's multibillion dollar offer, with many investors fearing that the two companies' personalities were incompatible.

Google has a history of spending big bucks for smaller businesses, including a $3.1 billion deal for DoubleClick in 2007. It seemed especially determined to get Groupon, however, even if the bidding was unprecedented. The Journal noted that AllThingsD claimed Google was offering $5.3 billion in the deal.

Copyright 2010 ABC News Radio

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