Money-Laundering Inquiry Said to Target U.S. Banks

The following is an excerpt from an article in:


The New York Times
Saturday, September 15, 2012

Money-Laundering Inquiry Said to Target U.S. Banks

By JESSICA SILVER-GREENBERG and BEN PROTESS

Federal and state authorities are investigating a handful of major American banks for failing to monitor cash transactions in and out of their branches, a lapse that may have enabled drug dealers and terrorists to launder tainted money, according to officials who spoke on the condition of anonymity.

These officials say they are beginning one of the most aggressive crackdowns on money-laundering in decades, intended to send a signal to the nation’s biggest banks that weak compliance is unacceptable.

Regulators, led by the Office of the Comptroller of the Currency, are close to taking action against JPMorgan Chase for insufficient safeguards, the officials said. The agency is also scrutinizing several other Wall Street giants, including Bank of America.

The comptroller’s office could issue a cease-and-desist order to JPMorgan in coming months, an action that would force the bank to plug any gaps in oversight, according to several people knowledgeable about the matter. But the agency, which oversees the nation’s biggest banks, has not yet completed its case. JPMorgan is in the spotlight partly because federal authorities accused the bank last year of transferring money in violation of United States sanctions against Cuba and Iran.

In addition to the comptroller, prosecutors from the Justice Department and the Manhattan district attorney’s office are investigating several financial institutions in the United States, according to law enforcement officials.

The surge in investigations, compliance experts say, is coming now because authorities were previously inundated with problems stemming from the 2008 financial turmoil. “These issues may have been put on hold during the financial crisis, and now regulators can go back to focus on money-laundering and other compliance problems,” said Alma M. Angotti, a director at Navigant, a consulting firm that advises banks on complying with anti-money-laundering rules.

Until now, investigators have primarily focused on financial transactions at European banks, most recently Standard Chartered. The authorities accused several foreign banks of flouting American law by transferring billions of dollars on behalf of sanctioned nations.

For more, visit www.nytimes.com.

European Central Bank May Get an Enforcement Role

The following is an excerpt from an article in:


The New York Times
Thursday, September 13, 2012

European Central Bank May Get an Enforcement Role

By JACK EWING

FRANKFURT — To the European Central Bank’s existing duties — bulwark against inflation, lender of last resort, ultimate guardian of the euro — add another task: top cop for the euro zone’s banking system.

If the European Parliament and euro zone member states approve a plan presented on Wednesday by the European Commission, at the beginning of next year the central bank will become chief regulator of all banks in the euro zone, with the power to impose fines, remove top executives and even revoke banking licenses.

The central bank would supersede national regulators, which have been accused of being overly protective of the banks they oversee and reluctant to require the lenders to grapple with their problems.

But before the central bank can begin to tackle the task of regulating the more than 6,000 credit institutions in the euro zone, new staff members must be hired, money must be allocated and a clear structure must be developed to coordinate its work with the national regulators that will continue to handle most of the day-to-day tasks. No one yet has even rough estimates of how many people or how much money the central bank will need to perform the new role.

Even though the European Commission’s proposal for a banking union is a big leap, it does not grant the central bank powers on a par with those of United States banking authorities like the Federal Deposit Insurance Corporation. Under the current plan, the central bank would not have the resources needed to prevent bank runs or the authority to arrange a decent burial for a terminally ill institution.

The plan for a banking union is a work in progress, assembled in the midst of a fast-moving crisis. It is doubtful whether the central bank’s supervision of banks will do much to ease tension in the euro zone, though it might help in the future.

“They need to develop their specific operational expertise,” said Jörg Rocholl, president of the European School of Management and Technology in Berlin. “I think of this as a long-term project that can prevent the next crisis from happening, to break this nexus between banks and states.”

The plan outlined by the European Commission would, if ratified, give the central bank new supervisory powers on Jan. 1. But it is likely to take six months from that date for the central bank to build up the capacity to regulate just the biggest, cross-border banks in the euro zone. It could be a year before it is able to supervise all the banks.

For more, visit www.nytimes.com.

Some in Europe Resist Reach of Central Banking Plan

The following is an excerpt from an article in:


The New York Times
Thursday, September 13, 2012

Some in Europe Resist Reach of Central Banking Plan

By JAMES KANTER and STEPHEN CASTLE

BRUSSELS — The European Commission president, José Manuel Barroso, described the proposal for a single supervisor for the region’s banks on Wednesday as the first step in a renewed drive for a federally unified Europe.

But immediate dissent from different European quarters over the ambition and scope of the banking plan, as well as concern about its feasibility, were reminders that a call like Mr. Barroso’s for “more Europe” as a solution to the Continent’s ills might be more easily said than done.

Delivering his annual State of the Union address to the European Parliament in Strasbourg, France, Mr. Barroso outlined a plan for more central banking regulation as a crucial part of the effort to resolve the region’s debt crisis.

The proposal, which would require the unanimous approval of the European Union’s 27 member nations, would give the European Central Bank the power to withdraw banking licenses, fine noncompliant lenders and require all 6,000 euro zone banks to join the system by Jan. 1, 2014.

Mr. Barroso also opened the door to a new discussion on revising the bloc’s rule book, even invoking the word federation to describe his ultimate goal. But something akin to a United States of Europe is regarded as a step too far by many Europeans, who fear a loss of national sovereignty.

“A deep and genuine economic and monetary union can be started under the current treaty but can only be completed with changes in the E.U. treaties,” he said. “I call for a federation of nation states, not a superstate.”

He indicated that proposals for a new treaty could come as soon as 2014.

That will raise concerns among some politicians who remember how plans to draw up a constitution for the bloc took several years to draft and were then rejected by referendums in France and the Netherlands in 2005.

The Lisbon Treaty, which took the place of the constitution, was intended to be the last redrawing of the rules for many years. Any new treaty would require the approval of all member states.

Seeking to paint himself as a moderate with ideas that could stem extremism during a period of economic distress, Mr. Barroso said that “we must not allow the populists and the nationalists to set a negative agenda.”

For more, visit www.nytimes.com.

Press release:

PRESS RELEASE

Second Harvest Food Bank Unveils New Facility in San Jose

Cypress Center on North First Nearly Doubles Food Bank's Operations

SAN JOSE, Calif., September 5, 2012 – Second Harvest Food Bank of Santa Clara and San Mateo Counties unveiled its new Cypress Center at 4001 North First Street today, which nearly doubles the Food Bank's operating space. The addition of the new building, coupled with a retooled produce distribution model and streamlined operations, will enable Second Harvest to distribute significantly more, and fresher, food to the community.

"The generous ‘over-and-above' gifts we received from longtime Food Bank supporters, including the building and funds to renovate it, are helping Second Harvest to significantly improve our efficiency," said Kathy Jackson, CEO of Second Harvest Food Bank. "As one of the few food banks in the country that does not charge for the food we provide, we have to work smarter to address the still-growing need, while offsetting challenges like rising food prices. Our new dedicated distribution model is reducing the number of food ‘touches', increasing inventory turns, and getting food out into the community faster."

Cypress Semiconductor donated the 75,000-square-foot building and surrounding five acres, with an estimated value of $9 million, to Second Harvest in April 2011. After a major renovation of what was once a research and development facility for Cypress, the Food Bank opened its doors at Cypress Center in April of this year. Second Harvest will also continue to operate out of its two other facilities – on Curtner Avenue in San Jose and Bing Street in San Carlos.

"With its central location on North First, the new facility will also allow us to broaden our connection with the community by actively engaging volunteers from our many corporate neighbors, as well as developing volunteer opportunities for families with children," Jackson said.

A $10 million capital campaign, including a $2 million donation from Cisco, funded the cost of the Cypress Center renovation, and will fund improvements at the Food Bank's other facilities as well as critical IT, fleet, and equipment needs. A $1 million bequest from the late Ashawna Hailey, a noted Silicon Valley innovator and philanthropist, provided both the "capstone contribution" to the capital campaign as well as additional funds to inspire future planned gifts to Second Harvest Food Bank.

During the grand opening, Second Harvest unveiled a large donor wall in its volunteer reception area that lists the Food Bank's key supporters. The reception area sits just off the main lobby and provides a welcoming place for volunteers, who are an integral part of the Food Bank. Last year, volunteers contributed 300,000 hours to Second Harvest, valued at $5.9 million.

Rooms have been named in honor of some major contributors, including the 10,000-square-foot Cisco Volunteer Room located next to the volunteer reception area. It is the main room where volunteers sort the food that is distributed to people in need. Two smaller sort rooms totaling about 6,000 square feet have been named the Applied Materials Volunteer Room and the SanDisk Volunteer Room. The Charmaine and Dan Warmenhoven Volunteer Break Room is located near the sort rooms to make it convenient for volunteers. Next to the break room is the Pond Family Conference Room, the largest meeting room at Cypress Center.

The new Cypress Center has plenty of cold storage to keep produce fresh, including an 8,000-square-foot walk-in cooler and a 2,000-square-foot freezer. The nine loading docks more than double Second Harvest's loading capacity, adding to the six docks at Curtner Center and two docks at Bing Center.

The new facility and operational changes are expected to increase Second Harvest's capacity by more than 50 percent over the next four years, from 46 million pounds of food to more than 69 million pounds of food distributed annually. The additional space and optimized processes have allowed the Food Bank to increase fresh produce to more than 50 percent of its total food distribution.

"The increase in the amount of fresh produce Second Harvest distributes is consistent with our focus on nutrition," Jackson said. "We have evolved far beyond providing just the rice, beans, and other shelf-stable commodities that previously filled our warehouse shelves. The Food Bank is determined to scale our operations, improve the nutritional content, and drive down the cost per pound of food we distribute, increasing our overall impact in the community."

The changes to Second Harvest's operations have improved what was already an extremely effective and efficient organization. For the sixth year in a row, Second Harvest has received Charity Navigator's four-star rating, placing it in the top 3 percent of nonprofits nationwide.

The Food Bank has seen a nearly 50 percent increase in the number of people it serves since the recession started. Second Harvest provides food to nearly 250,000 people each month – that's one in 10 people in the two-county region. Even in the face of an improving economy, demand for Food Bank services continues to grow.

Anyone who is struggling to put food on the table should call Second Harvest Food Bank's Food Connection hotline at 800-984-3663. To support the Food Bank, visit www.SHFB.org or call 866-234-3663.

Second Harvest Food Bank of Santa Clara and San Mateo Counties is the trusted leader dedicated to ending local hunger. Since its inception in 1974, Second Harvest has become one of the largest food banks in the nation, providing food to an average of nearly one quarter of a million people each month. The Food Bank mobilizes individuals, companies and community partners to connect people to the nutritious food they need. Nearly half of the food distributed is fresh produce. Second Harvest also plays a leading role in promoting federal nutrition programs and educating families on how to make healthier food choices. Visit www.SHFB.org to get involved.

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Banks Facing Suits as States Weigh Their Libor Losses

The following is an excerpt from an article in 

The New York Times
Wednesday, September 05, 2012

Banks Facing Suits as States Weigh Their Libor Losses

By NATHANIEL POPPER

The scandal over global interest rates has state officials like Janet Cowell of North Carolina working intensely behind the scenes to build a case for suing the nation’s largest banks.

Ms. Cowell, the state’s elected treasurer, and several of her staff members have spent the summer combing through the state’s investments trying to determine how much the state may have lost because of suspected manipulation of the London interbank offered rate, or Libor, which is used as a benchmark for trillions of dollars of financial contracts around the world.

“We think this could be as big as the mortgage crisis settlement, that this could be a really high impact situation and that we should be aggressive on this,” Ms. Cowell said, referring to the $25 billion settlement that the nation’s biggest banks entered with state attorneys general.

The activity provides a glimpse at how widely the Libor scandal has spread through the financial world, and how much damage may still be in store for the banks accused of manipulating Libor. Her work also suggests just how difficult it is, and how long it may take, to get to the bottom of the losses.

The attorneys general in Maryland, Massachusetts, New York and Connecticut have all been examining how much their states may have lost as a result of a lowered Libor. A spokeswoman for Connecticut’s attorney general, George C. Jepsen, said that the state’s work with New York’s attorney general, Eric T. Schneiderman, “has broadened significantly over the last few weeks and we are now coordinating with a much larger group of attorneys general.”

Even before the British bank Barclays admitted in June that its employees had tried to manipulate Libor, there were a number of lawsuits filed by cities and municipal agencies seeking damages from large banks for manipulating Libor. But while those cases were filed by private sector lawyers, the public officials are looking at bringing more wide-ranging lawsuits on behalf of the states. The Justice Department has coordinated with the states and is leading its own investigation.

For more, visit www.nytimes.com.

How a Plan to Help Stockton, Calif., Pay Pensions Backfired

The following is an excerpt from an article in 

The New York Times
Tuesday, September 04, 2012

How a Plan to Help Stockton, Calif., Pay Pensions Backfired

By MARY WILLIAMS WALSH

Jeffrey A. Michael, a finance professor in Stockton, Calif., took a hard look at his city’s bankruptcy this summer and thought he saw a smoking gun: a dubious bond deal that bankers had pushed on Stockton just as the local economy was starting to tank in the spring of 2007, he said.

Stockton sold the bonds, about $125 million worth, to obtain cash to close a shortfall in its pension plans for current and retired city workers. The strategy backfired, which is part of the reason the city is now in Chapter 9 bankruptcy. Stockton is trying to walk away from the so-called pension obligation bonds and to renegotiate other debts.

After reviewing an analysis of the bond deal, underwritten by the ill-fated investment bank, Lehman Brothers, and watching a recording of the Stockton City Council meeting where Lehman bankers pitched the deal, Mr. Michael concluded that “Stockton is entitled to some relief, due to deceptive and misleading sales practices that understated the risk.”

“Lehman Brothers just didn’t disclose all the risks of the transaction,” he said. “Their product didn’t work, in the same way as if they had built a marina for the city and then the marina collapsed.”

Financial analysts and actuaries say essentially the same pitch that swayed Stockton has been made thousands of times to local governments all over the country — and that many of them were drawn into deals that have since cost them dearly.

Since virtually all pension obligation bonds turn on the same basic strategy that Stockton followed, Mr. Michael’s research could be a road map for avoiding more such problems, or perhaps for seeking redress. His analysis was part of his August economic forecast for the region, which he prepares as director of the Business Forecasting Center at the University of the Pacific.

There are about $64 billion in pension obligation bonds outstanding, and even though issuance has slowed, more of the bonds are coming to market, even now.

Officials in Fort Lauderdale, Fla., are scheduled to vote on a $300 million pension obligation bond on Wednesday, for instance. Hamden, Conn., has amended its charter to allow for the bonds to rescue a city pension fund that is wasting away. Oakland, Calif., recently issued about $211 million of the bonds, following the lead of several other California cities and counties.

For more, visit www.nytimes.com.

Central Banker Facing a Test

The following is an excerpt from an article in 

The New York Times
Wednesday, August 29, 2012

Central Banker Facing a Test

By LANDON THOMAS Jr.

LONDON — Mario Draghi, the president of the European Central Bank, has helped the euro zone survive August. But can he save September?

This month, Mr. Draghi stared down bearish international traders who were convinced that Europe’s common currency project would collapse.

“It is pointless to bet against the euro — it is pointless to go short on the euro,” Mr. Draghi said at a news conference on Aug. 2, a week after telling the world that the central bank would do “whatever it takes” to save the euro union.

Investors, or at least the ones venturing into the lightly traded markets this month, have taken heed.

Since Aug. 2, the euro is up 3.1 percent against the dollar. More notably, battered stocks and bonds in Spain and Italy have soared. The euro bears have rushed to close out their negative bets, and even some risk-averse traders have piled into assets they previously scorned.

But it will be September and not the lazy days of August that will truly test Mr. Draghi’s market-moving mettle. He will face severe pressure to provide specific details of his plan to shore up the euro zone’s weaker members by buying their bonds.

The first big test could come next week, on Sept. 6, when the bank’s governing council meets. Afterward, Mr. Draghi will again hold a news conference to try to explain whatever the central bank has or has not done. Bearish traders will be poised to pounce yet again on any signs of waffling.

Worries are also swirling that Germany will refuse to grant Greece the time and resources it is seeking to reduce its debt, something that could push it out of the euro currency bloc. Looming as well is the possibility that a decision from Germany’s Constitutional Court, expected on Sept. 12, will rule out German involvement in the region’s new bailout fund, the European Stability Mechanism.

The schism within German policy circles has been revealed in recent days. In an interview with the magazine Der Spiegel on Sunday, the head of the German central bank, Jens Weidmann, who is also on the European Central Bank Governing Council, fiercely criticized any intervention by the European bank in bond markets.

But on Monday, Jörg Asmussen, a German on the E.C.B.’s executive board who was a colleague of Mr. Weidmann in the government of Chancellor Angela Merkel, said during a speech in Hamburg that the bank had to buy bonds to stabilize European debt markets.

For more, visit www.nytimes.com.

GE Capital Retail Bank Employees Support the Akron-Canton Foodbank to Sort and Package over 13,000 Pounds of Food

News release from GE:

21 August 2012

GE Capital Retail Bank Employees Support the Akron-Canton Foodbank to Sort and Package over 13,000 Pounds of Food

 

GE Employees Continue to Support the Akron-Canton Regional Foodbank, benefitting the Community and the Foodbank’s Member Agencies

CANTON, Ohio – August 21, 2012 –– GE Capital Retail Bank in Canton is working with the Akron-Canton Regional Foodbank to support the Foodbank’s Harvest for Hunger campaign. Harvest for Hunger is a two-month campaign that encourages people to support the Foodbank, either through charitable giving or with donations of non-perishable food.

As part of these efforts, over 60 GE employees volunteered nearly 350 hours over the course of two separate days, with two more volunteer events planned for August 21 and October 24. This will bring the employees involved to an estimated 150, and the volunteer hours are expected to exceed 750.

“Our volunteer efforts with the Foodbank gives us an opportunity to see first-hand how great the need is in our local community,” said project leader and GE Capital Retail Bank employee Nina Barnett.

About Akron-Canton Regional FoodbankThe Akron-Canton Regional Foodbank was formed in 1982 by a group of community leaders who made a commitment to provide emergency food to our neighbors in need. Today, the Foodbank provides food and other essential items to member agencies in eight Northeast Ohio counties: Carroll, Holmes, Medina, Portage, Stark, Summit, Tuscarawas and Wayne. These member agencies operate more than 450 programs like food pantries, hot meal sites, shelters and other hunger-relief programs in the neighborhoods and communities where people need food. For more information, visithttp://www.akroncantonfoodbank.org/ or call 330-535-6900.

About GE Capital’s Retail Finance businessGE Capital’s Retail Finance business is among the country’s most successful retail lenders, with more than 75 years of experience in consumer financing. The business, which originates loans as a unit of GE Capital Retail Bank, provides customized credit programs to retailers and consumers in the United States and Canada that help drive sales. This includes private label and bankcard credit programs to major national, regional and independent retailers in the U.S., as well as private label credit programs, promotional and installment lending, bankcards and financial services for consumers through dealers; contractors; manufacturers; healthcare practices; and service providers across nearly 20 industries. More information can be found atwww.gogecapital.com and twitter.com/GoGECapital.

GE Capital is one of the world’s largest providers of credit. For over one million businesses, large and small, GE Capital provides financing to purchase, lease and distribute equipment, as well as capital for real estate and corporate acquisitions, refinancings and restructurings. For our 100+ million consumer customers, GE Capital offers credit cards, sales finance programs, home, car and personal loans and credit insurance. For more information, visit www.gecapital.com or follow company news via Twitter @GECapital.

GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.

GE Capital, Franchise Finance Provides $45 Million Credit Facility to Raising Cane’s

Press release from GE:

21 August 2012

GE Capital, Franchise Finance Provides $45 Million Credit Facility to Raising Cane’s

 

Funds revolving line of credit and refinancing

SCOTTSDALE, Ariz.--21 August 2012-- GE Capital, Franchise Finance recently provided a $45 million senior secured credit facility to Raising Cane’s Chicken Fingers®, a Baton Rouge, La.-based restaurant chain. The facility refinances the company’s existing term loan and provides a revolving line of credit. A portion of the funding was provided through GE Capital bank affiliate, GE Capital Bank.

“We’ve been working with GE since 2003,” says Brad Sanders, chief business officer, fry cook, and cashier, Raising Cane’s. “Because of our relationship, they were able to create a more flexible deal structure which really set them apart.”

Todd Graves, the founder of Raising Cane’s, having received a C on the business plan in college, worked several jobs to save enough money to open the first restaurant in 1996 near the LSU campus

“Raising Cane’s has a great track record of success,” says Ryan Ruud, vice president, GE Capital, Franchise Finance. “We’re pleased to have supported the company during a nine year relationship, and are excited to put a new facility in place to support their next phase of growth.”

Raising Cane's was founded in 1996 and serves fresh, never frozen, chicken finger meals, including Texas toast, crinkle-cut fries, cole slaw, and Cane's sauce, through 131 restaurants in 16 states.

About GE Capital, Franchise Finance

GE Capital, Franchise Finance is a leading lender for the franchise finance market via direct sales and portfolio acquisition. With more than 30 years of experience and $10 billion in served assets, we serve over 3,000 customers and over 18,000 property locations. We specialize in financing mid-market operators with multiple stores in the restaurant and hospitality industries. Our team of industry experts will work with you to help develop your own growth plan with access to our proprietary industry research and customized tools. More information is available atwww.gefranchisefinance.com.

Deutsche Bank’s Business With Sanctioned Nations Under Scrutiny

The following is an excerpt from an article in 

The New York Times
Saturday, August 18, 2012

Deutsche Bank’s Business With Sanctioned Nations Under Scrutiny

By JESSICA SILVER-GREENBERG

Federal and state prosecutors are investigating Deutsche Bank and several other global banks over accusations that they funneled billions of dollars through their American branches for Iran, Sudan and other sanctioned nations, according to law enforcement officials with knowledge of the cases.

But the recent clash between New York’s top banking regulator and federal authorities over how to handle a similar case against the British bank Standard Chartered could complicate the investigations.

The United States prosecutors worry that the $340 million settlement between the New York regulator, Benjamin M. Lawsky, and Standard Chartered sends a message to international banks and regulators that American authorities are uncoordinated and torn by divisions — since Mr. Lawsky acted alone in leveling the charges and settling the case. They also worry that foreign banks and regulators will no longer readily cooperate in turning over valuable transaction data that reveal the parties behind the global movement of tainted money, according to the federal and state prosecutors who were not authorized to publicly discuss the investigations.

Now the authorities in the Justice Department and the New York County district attorney’s office are debating how deeply involved Mr. Lawsky’s office should be in the investigations. A spokesman for Mr. Lawsky said the department “will continue to cooperate and work with our law enforcement partners both federal and state.”

The Deutsche Bank investigation is the latest in a series of cases against global financial firms since 2009 that suggests the practice of transferring money on behalf of Iranian banks and corporations flourished under a loophole in United States policy that ended in 2008.

A spokesman for Deutsche Bank declined to comment, but noted that the German bank decided in 2007 that it would “not engage in new business with counterparties in countries such as Iran, Syria, Sudan and North Korea and to exit existing business to the extent legally possible.”

Since 2009, the Justice Department, the Treasury Department and the Manhattan district attorney’s office, working largely in concert, have brought charges against five foreign banks, contending they moved billions of dollars through their American subsidiaries on behalf of Iran, Cuba and North Korea, sponsors of terrorism and drug cartels.

The cases against the five banks all included deferred prosecution agreements and required the banks — ABN Amro, Barclays, Credit Suisse, Lloyds and most recently ING — to forfeit a substantial amount of assets.

The cases typically have not involved United States banks. Unlike foreign institutions, American banks were prohibited from originating or receiving such transactions from Iran. That enabled them to largely sidestep the conduct that has helped ensnare foreign banks.

For more, visit www.nytimes.com.

Visa and MasterCard Investigate Data Breach

Excerpt from an article in

The New York Times

Saturday, March 31, 2012

Visa and MasterCard Investigate Data Breach

By JESSICA SILVER-GREENBERG and NELSON D. SCHWARTZ

Visa and MasterCard are investigating whether a data security breach at one of the main companies that processes transactions improperly exposed private customer information, bank officials said Friday. The event highlighted a crucial vulnerability that could affect millions of credit card holders.

The breach occurred at Global Payments, an Atlanta company that helps Visa and MasterCard process transactions for merchants. One bank executive estimated that about one million to three million accounts could be affected. That does not mean that all those cards were used fraudulently, but that credit card information on the cardholders was exposed.

The bank official, who insisted on anonymity because the inquiry is at an early stage, said that Visa and MasterCard notified his company on Thursday, but that banks had been frustrated with the pace of disclosure by Global Payments. He said that Global Payments, which is one of the biggest transactions processors, had provided little information on where the breaches took place, how accounts were hacked and other details that could indicate which customers might be vulnerable.

Banks said that when they could identify victims, they would notify them and replace credit cards, if necessary.

While far from the largest breach of credit card data in recent years, the latest incident, which is being investigated by major banks and federal authorities as well as the card companies, underscores concerns about the vulnerability of electronic financial data.

Kansas City Business Owner Pleads Guilty to Multi-Million-Dollar Bank Fraud Conspiracy

U.S. Attorney’s Office March 23, 2012

Western District of Missouri (816) 426-3122

— filed under: Financial, Fraud, Press Release, White-Collar Crime

KANSAS CITY, MO—David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced that the owner of several used car dealerships in the Kansas City, Missouri metropolitan area pleaded guilty in federal court today to his role in a bank fraud conspiracy that resulted in losses of millions of dollars by several financial institutions.

John A. Hart III, 51, of Kansas City, pleaded guilty before U.S. District Judge Ortrie D. Smith to the charge contained in an information that was filed today in lieu of the September 21, 2011 federal indictment.

Between May 2000 and February 2009, Hart operated several used car dealerships at various locations, including Better Than New Automobiles LLC, On Time Auto, and Hart Family Motors.

Hart and others obtained loans and lines of credit from various financial institutions in connection with vehicles involved in his auto sales business. Hart admitted that he provided false and fraudulent financial information to obtain loans and lines of credit. Hart also admitted that he obtained multiple loans in which the same vehicle was pledged as collateral, and failed to disclose to the financial institutions that vehicles pledged as collateral for loans were already encumbered at another financial institution or in another loan.

Hart also admitted that he and his wife borrowed more than $1 million from First Missouri National Bank between November 15, 2006 and March 26, 2008. They provided copies of their 2004 and 2005 income tax returns to the bank. However, according to today’s plea agreement, they did not actually file their 2004 and 2005 returns until 2009. The filed returns were materially different than the tax returns submitted to the bank in support of their loan application. According to the plea agreement, the filed returns claimed a much lower adjusted gross income.

The government believes the loss attributed to Hart is between $2.5 million and $7 million. Under the terms of today’s plea agreement, Hart reserves his right to argue what the appropriate loss calculation should be at the sentencing hearing.

Under federal statutes, Hart is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Acting U.S. Attorney David M. Ketchmark. It was investigated by the FBI.

GE Capital Retail Bank and Discount Tire Renew Consumer Financing Agreement

26 March 2012

GE Capital Retail Bank and Discount Tire Renew Consumer Financing Agreement

Building on their 15 year relationship, the Discount Tire CarCareONE^SM Card is Available Through more than 800 Locations Nationwide

STAMFORD, Conn. and SCOTTSDALE, Ariz. –– March 26, 2012 –– GE Capital Retail Bank has announced a multi-year renewal to continue providing financing for customers of Discount Tire, the nation’s leading independent tire retailer. GE Capital’s Retail Finance business, the operating entity that provides financial solutions to retailers and dealers to help grow their customer sales, will continue to manage the Discount Tire relationship and service the account.

The Discount Tire CarCareONE credit card program, which began in 1997, provides customers with convenient payment options and benefits for their full-service tire replacement, wheel, and maintenance and repair purchases at any of the company’s more than 800 stores and online at discountire.comor tires.com. Cardholders* can qualify for rebates, promotional financing terms, exclusive savings, e-bill and e-payment, and other options.

“The CarCareONE financing program is an essential tool for supporting our growth initiatives and an important part of our service offering, giving customers payment options that enable them to budget for planned and unplanned auto care,” said Christian Roe, chief financial officer of finance for Discount Tire. “GE Capital understands the needs of our customers and our business as we continue to evolve.”

Established in 1960 and headquartered in Scottsdale, Ariz., Discount Tire operates more than 800 stores in 23 states and offers one of the largest selections of leading brand tires and wheels, as well as full service tire service and repair. Over the past half century, Discount Tire has grown to become the world's largest independent tire and wheel retailer today.

“For more than 15 years, we’ve enjoyed working with Discount Tire to build their business and provide their customers with convenient payment options,” said Mike Mattevi, vice president of sales, automotive industry, for GE Capital’s Retail Finance business. “We’re pleased to extend our relationship and continue supporting Discount Tire’s customer service and satisfaction guarantee.”

For more than 75 years, GE Capital’s Retail Finance business has provided billions of dollars in consumer financing through major retailers and more than 200,000 small- and mid-sized businesses throughout the United States. GE Capital is a leading provider of consumer credit in the automotive industry for more than 30 years. The company supports its clients with proprietary online technology such as Business Center, which includes service, marketing and sales tools, as well as the newly launched Learning Center, providing businesses with fast and easy access to training tools and resources on how to better understand and offer financing to consumers.

About Discount TireDiscount Tire, based in Scottsdale, Arizona, is America's largest independent tire retailer. Also referred to as America's Tire in Oregon and some parts of California and Washington, Discount Tire currently operates over 800 stores in 23 states across the country. Serving more than 40 million customers, Discount Tire has built its success on the motto, "Be fair, be truthful, work hard, be there on time, and help people." Atdiscounttire.com and tires.com, customers can research, order and make an appointment for service.

About GE Capital’s Retail Finance businessGE Capital’s Retail Finance business is among the country’s most successful retail lenders, with more than 75 years of experience in consumer financing. The business, which originates loans as a unit of GE Capital Retail Bank, provides customized credit programs to retailers and consumers in the United States and Canada that help drive sales. This includes private label and bankcard credit programs to major national, regional and independent retailers in the U.S., as well as private label credit programs, promotional and installment lending, bankcards and financial services for consumers through dealers; contractors; manufacturers; healthcare practices; and service providers across nearly 20 industries. More information can be found atwww.gogecapital.com and twitter.com/GoGECapital.

GE Capital is one of the world’s largest providers of credit. For over one million businesses, large and small, GE Capital provides financing to purchase, lease and distribute equipment, as well as capital for real estate and corporate acquisitions, refinancings and restructurings. For our 100+ million consumer customers, GE Capital offers credit cards, sales finance programs, home, car and personal loans and credit insurance. For more information, visit www.gecapital.com or follow company news via Twitter@GECapital.

GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.

* subject to credit approval as determined by GE Capital Retail Bank.

Bank of America Announces Small Business 401(k) through Merril Egde

Bank of America Announces Small Business 401(k) Through Merrill Edge

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New Retirement Solution From Merrill Edge Designed to Address the Needs of Small Business Owners and Employees Through a Convenient Plan With Lower Costs Than Many Traditional 401(k) Offerings CHARLOTTE, N.C.--(BUSINESS WIRE)--Mar. 26, 2012-- Bank of America today announced the launch of a new 401(k) solution from Merrill Edge designed for small businesses, called the Merrill Edge® Small Business 401(k). This retirement solution offers small business owners, who generally have 401(k) plan assets under $250,000, a simplified, easy-to-manage retirement plan with lower costs than many traditional 401(k) plans, enabling small businesses to provide an important benefit to their employees. “We know how important small businesses are to our nation’s economy and how dedicated their owners are to their employees,” said Robb Hilson, Bank of America Small Business executive. “Offering a simplified 401(k) plan, designed to address the needs of small business owners and their employees, is yet another way we are showing our commitment to supporting small businesses.” According to a recent U.S. Government Accountability Office report, only 14 percent of small business employers (those with up to 100 employees) offer a retirement plan to their employees. Based on interviews with small employers, the report cited plan complexity, administrative burdens and carrying out fiduciary responsibilities as among the key barriers to sponsoring retirement plans1. The Merrill Edge Small Business 401(k) has easy-to-understand pricing that is generally lower than many traditional 401(k) plans. The offering provides convenient access to an online plan that is easy to maintain so that small business owners can stay focused on running their businesses and give themselves and their employees opportunities to pursue a successful retirement. “In a recent Bank of America Merrill Lynch Workplace Benefits Report, more than half of small business owners cited retirement benefits as one of the top tools for retaining employees and attracting new talent,” said Rich Linton, head of Business Retirement Solutions for Bank of America Merrill Lynch. “The generally lower costs than many traditional plans and accessibility of this solution enable business owners to provide employees with an important, tax-advantaged retirement savings tool, while also receiving potential tax benefits for their business.” The Merrill Edge Small Business 401(k) is self-serviced and managed completely online, giving small business owners secure access when and where it is convenient for them. Additional features and benefits include: An affordable, flexible 401(k) plan to help meet their unique needs. Access to 401(k) specialists to help with online plan setup. Web-based 401(k) recordkeeping administration services tailored for small businesses provided by Plan Administrators, Inc. Transparent fees to help quickly assess the right plan for their business and control the bottom line. A streamlined investment menu selected by Morningstar Associates, LLC, who assumes investment fiduciary responsibility and simplifies the fund selection process for clients, while helping take the guesswork out of fund selection for employees. This solution also gives employees a platform through which they can easily manage theirretirement investments. Features include: Online resources and education to help employees start their retirement investing and then stay on track, as well as phone-based support from 401(k) specialists to help them make informed investment decisions. Access to daily online statements and account performance details. “Merrill Edge Small Business 401(k) gives small business owners and their employees access to benefits of the Merrill Edge services,” said Alok Prasad, head of Merrill Edge for Bank of America. “Merrill Edge’s simplified and transparent features enable customers to efficiently manage all their investment and retirement accounts, helping them prepare for the years ahead.” In addition to the Merrill Edge Small Business 401(k), Merrill Edge offers small business owners a range of cost-effective retirement plan solutions to help meet their needs, including a Savings Incentive Match Plan for Employees (SIMPLE) and Simplified Employee Pension (SEP) plans. Additionally, Merrill Lynch provides access to a host of solutions through its Advisor Allianceprogram, which delivers affordable recordkeeping and retirement plan administration services from a diverse selection of providers. Beyond retirement plans, Bank of America is helping small businesses through a variety of other programs and services. The company extended $6.4 billion in new loan originations to small businesses in 2011, which increased new credit to small businesses by 20 percent. Bank of America is also the leading bank supporting Community Development Financial Institutions (CDFIs), providing more than $200 million to finance small businesses that can’t qualify for traditional loans. A CDFI grant program, created in 2010 to unlock low-cost capital for small businesses, has allowed CDFIs to access more than $93 million, serving more than 8,700 local businesses and helping create and retain more than 13,000 jobs. Bank of America has also hired more than 700 small business bankers since late 2010 and plans to hire a total of approximately 1,000 across the U.S. by mid-2012. These bankers serve as a dedicated resource for small business owners, helping them assess their companies’ deposit, credit and cash management needs. 1 United States Government Accountability Office’s testimony before the Special Committee on Aging, U.S. Senate, March 7, 2012 Merrill Edge Merrill Edge provides mass affluent customers and small business clients with access to professional investment guidance through Merrill Edge Financial Solutions Advisors™ in the Merrill Edge Advisory Center™ or in-person at select banking centers. For customers who prefer to invest on their own, Merrill Edge provides an online self-directed investing platform, with robust tools and resources to help them make informed investment decisions. Bank of America Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,750 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange. For more Bank of America news, visit the Bank of America newsroom. www.bankofamerica.com Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing. MLPF&S is a registered broker-dealer, member SIPC and a wholly owned subsidiary of Bank of America Corporation. Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Plan administrative and recordkeeping services for Merrill Edge Small Business 401(k) are provided by Plan Administrators, Inc. (PAi). Investment advisory and fiduciary services are provided by Morningstar Associates, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Morningstar Associates, LLC is a provider of investment management solutions including investment advisory and retirement plan services. TheMorningstar name and logo are registered marks of Morningstar, Inc. Educational call center support will be provided by PAi. Bank of America Corporation, PAi and Morningstar Associates, LLC are not affiliated. www.merrilledge.com Investment products: Are Not FDIC Insured   Are Not Bank Guaranteed   May Lose Value © 2012 Bank of America Corporation. All rights reserved.

Microsoft Raids Tackle Online Crime

Excerpt from an article in

The New York Times

Monday, March 26, 2012

Microsoft Raids Tackle Online Crime

By NICK WINGFIELD and NICOLE PERLROTH

SEATTLE — Microsoft employees, accompanied by United States marshals, raided two nondescript office buildings in Pennsylvania and Illinois on Friday, aiming to disrupt one of the most pernicious forms of online crime today — botnets, or groups of computers that help harvest bank account passwords and other personal information from millions of other computers.

With a warrant in hand from a federal judge authorizing the sweep, the Microsoft lawyers and technical personnel gathered evidence and deactivated Web servers ostensibly used by criminals in a scheme to infect computers and steal personal data. At the same time, Microsoft seized control of hundreds of Web addresses that it says were used as part of the same scheme.

The sweep was part of a civil suit brought by Microsoft in its increasingly aggressive campaign to take the lead in combating such crimes, rather than waiting for law enforcement agencies to act. The company’s targets were equipment used to control the botnets, which criminals, known as bot-herders, use for ill intent.

Microsoft has a big interest in making the Internet a safer place. Despite inroads made by Apple and others in some parts of the technology business, Microsoft’s Windows operating system still runs the vast majority of the computers connected to the Internet. The prevalence of its software has made Windows the most appealing target for online criminals, and the security holes they discover in the software are a persistent nuisance for Windows users.

Microsoft’s involvement in what had been considered largely a law enforcement function — fighting computer crime — is the brainchild of Richard Boscovich, a former federal prosecutor who is a senior lawyer in Microsoft’s digital crimes unit. That group watches over fraud that could affect the company’s products and reputation.

Armenian Power Member and Three Armenian Power Associates Convicted in Los Angeles for Roles in Identity Theft Ring 

U.S. Department of JusticeMarch 22, 2012

Office of Public Affairs(202) 514-2007/TDD (202) 514-1888

WASHINGTON—After a five week trial, four defendants have been convicted for their roles in one of the largest bank fraud and identity theft schemes in California history, with dozens of victims in four states and millions of dollars in losses.

The convictions were announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Andre Birotte, Jr. of the Central District of California; Assistant Director in Charge of the FBI’s Los Angeles Field Office Steven Martinez; and Special Agent in Charge of the U.S. Secret Service (USSS) Joseph Beaty.

Arman Sharopetrosian, Karen Markosian, Artush Margaryan, and Kristine Ogandzhanyan were found guilty of conspiring to commit bank fraud, attempted bank fraud, and various counts of aggravated identity theft. Sharopetrosian, Markosian, and Ogandzhanyan waived a jury trial and consented to trial by the judge, and Margaryan proceeded with a jury trial.

Yesterday, U.S. District Judge David O. Carter found Ogandzhanyan, 28, of Burbank, California, guilty of one count of bank fraud conspiracy, two counts of attempted bank fraud, and four counts of aggravated identity theft. On March 16, 2012, the judge found Sharopetrosian, 33, of Burbank, guilty of one count of bank fraud conspiracy, four counts of bank fraud, and seven counts of aggravated identify theft. On March 16, 2012, the judge also found Markosian, 39, of Glendale, California, guilty of one count of bank fraud conspiracy, one count of attempted bank fraud, and two counts of aggravated identity theft. A jury convicted the fourth defendant, Artush Margaryan, 28, of Van Nuys, California, on March 16, 2012 of one count of bank fraud conspiracy, one count of attempted bank fraud, and three counts of aggravated identity theft.

Evidence was presented at trial that Sharopetrosian is a member of the Armenian Power organized crime group, and Margaryan, Markosian, and Ogandzhanyan are Armenian Power associates.

According to evidence presented at trial, Sharopetrosian directed the massive fraud scheme along with co-defendant Angus Brown while the two were incarcerated at Avenal State Prison. Using cellular telephones that were smuggled into the prison, Sharopetrosian and Brown worked from behind bars to coordinate with others, including Ogandzhanyn, Markosian, and Margaryan, to obtain confidential bank profile information and steal money from victim account holders. Often targeting high-value bank accounts, the defendants used account holders’ personal identifying information—including names, Social Security numbers, and dates of birth—to impersonate victims in phone calls to the bank. The defendants gathered account information, transferred funds between victims’ accounts, and placed unauthorized check orders for the accounts. They then stole the checks, obtained the victims’ signatures from public documents, and paid conspirators to cash the forged checks. Over the course of the six-year conspiracy, the defendants and their co-conspirators caused more than $10 million dollars in losses to victims in Southern California, Nevada, Arizona, and Texas.

“These defendants, including two individuals who were operating from a prison cell, perpetrated a massive fraudulent scheme on behalf of a dangerous criminal enterprise,” said Assistant Attorney General Breuer. “As members and associates of Armenian Power, they stole sensitive personal and financial information from innocent consumers and caused millions of dollars in losses. Whether organized criminal groups traffic in drugs, commit financial fraud or wreak other havoc to keep themselves going, they must be stopped. We are doing everything possible to shut down dangerous gangs like Armenian Power.”

“The safety and sanctity of confidential financial information is paramount in today’s society,” said U.S. Attorney Birotte. “Identity theft is a fundamental invasion of consumer privacy that cannot be tolerated. These convictions demonstrate that violators, whoever and wherever they may be, will be caught and will be prosecuted to the fullest extent of the federal law.”

“The defendants were convicted in a trial that uncovered a sophisticated and lengthy scheme that targeted victims in multiple states and included disturbing details, such as orders made from within prison walls and assistance from bank insiders enlisted by the defendants,” said FBI Assistant Director Martinez. “This case is also indicative of the growing trend of gang or organized crime-affiliated groups now engaging in identity theft and other financial crimes in furtherance of their enterprise.”

These defendants are four of 20 defendants who were charged with operating the bank fraud and identity theft scheme in one of a series of federal indictments unsealed on February 16, 2011. The indictments allege various federal crimes against members and associates of the Armenian Power criminal organization. To date, 19 of the 20 defendants charged in the bank fraud indictment have been convicted, including Brown. One defendant, Faye Bell, was arrested earlier this year and is still awaiting trial.

Sharopetrosian, Margaryan, Markosian, and Ogandzhanyan face maximum sentences of 30 years in federal prison for each count of bank fraud, 30 years for each count of conspiracy to commit bank fraud, and additional mandatory two year sentences for each count of aggravated identity theft.

Sentencing for all four defendants is scheduled for August 6, 2012 before Judge Carter.

The case is being prosecuted by Assistant U.S. Attorneys Martin Estrada and Joseph McNally of the Central District of California and Trial Attorney Cristina Moreno of the Organized Crime and Gang Section in the Justice Department’s Criminal Division. The case was investigated by the Eurasian Organized Crime Task Force, which includes the FBI, the USSS, the Los Angeles Police Department, the Glendale Police Department, the Burbank Police Department, the Internal Revenue Service, and the U.S. Immigration and Customs Enforcement.

Why Hackers Set Their Sights on Small Business

If you run a small business, and think that none of your data was of interest to a hacker, consider this: what if a hacker could take stolen bank account or credit card information from your computer and package it with the same information from a hundred or a thousand other small businesses? Would it be worth something then?

"SMBs don't know how defenseless they've become, especially to automated and industrialized attack methodologies by organized crime," Christopher Porter tells PCWorld. Porter, a principal with the Verizon RISK Team, is the author of a new report from Verizon on security risk.

"[Hackers] scan the Internet, looking for remote access services, and then try the default credentials. Once they gain access, they automatically install keyloggers to collect password information [as it's typed in]," Porter says. "Then they send the information it out via e-mail or by uploading it to an FTP server or a web site. They aggregate the data and sell it on the black market."

Hackers could use the keylogger to figure out how access and drain a small business' bank account, but more commonly, Porter said, they'll target point-of-sale systems, as four Romanians did recently. "That kind of attack is increasing, because they're low-risk and low-cost attacks for organized crime." Because they're geographically widespread, it's hard for any one police department to follow up.

For more, click the link below: 

http://www.pcworld.com/businesscenter/article/252302/why_hackers_set_their_sights_on_small_businesses.html#tk.nl_bdx_h_crawl

GE Capital, Franchise Finance Provides $30 Million to Popeyes® Louisiana Kitchen Franchisee, Shelton Restaurant Group, LLC

23 March 2012

GE Capital, Franchise Finance Provides $30 Million to Popeyes® Louisiana Kitchen Franchisee, Shelton Restaurant Group, LLC

Funds acquisition

SCOTTSDALE, Ariz.--23 March 2012-- GE Capital, Franchise Finance provided a $30 million credit facility to Shelton Restaurant Group, LLC, a Popeyes^® Louisiana Kitchen franchisee. The financing is being used to acquire 29 Popeyes units in the Lafayette, Louisiana area. The funding was provided through GE Capital’s bank affiliate, GE Capital Financial Inc.

“We chose to work with GE Capital because of their industry knowledge and ability to execute on large transactions,” explained Mike Shelton, president, Shelton Restaurant Group, LLC. “We are excited about this acquisition and GE Capital helped make it possible.”

Based in Alexandria, Louisiana, Shelton Restaurant Group, with this acquisition will own and operate 30 Popeyes restaurants throughout Louisiana and Texas.

“Being specialists in this industry enabled us to establish a great working relationship with Mike Shelton, resulting in a smooth transaction process,” said Joseph Philip, vice president, GE Capital, Franchise Finance.

Founded in New Orleans, Louisiana in 1972, Popeyes^® Louisiana Kitchen is the world’s second largest quick-service chicken restaurant, based on the number of units with approximately 2,000 locations around the world. In 2011 Popeyes was named number 20 on the QSR 50 and in 2010 it was named number 57 on the Franchise Times Top 200 Franchise Chains by Worldwide Sales.

About GE Capital, Franchise Finance

GE Capital, Franchise Finance is a leading lender for the franchise finance market via direct sales and portfolio acquisition. With more than 30 years of experience and $10 billion in served assets, we serve over 3,000 customers and over 18,000 property locations. We specialize in financing mid-market operators with multiple stores in the restaurant and hospitality industries. Our team of industry experts will work with you to help develop your own growth plan with access to our proprietary industry research and customized tools. More information is available atwww.gefranchisefinance.com.