Russia Cuts Rates to Record Low to Stimulate Lending

Abstract: MOSCOW — Russia’s central bank cut its key interest rates Tuesday to a record low, the ninth reduction since April, as it seeks to deter speculative bets on the ruble and ease credit flows to households and businesses. Bank Rossii cut the refinancing rate to 9 percent from 9.5 percent and reduced the repurchase rate charged on central bank loans to 8 percent from 8.5 percent, effective Wednesday. It last lowered them by half a percentage point on Oct. 30. Policy makers are trying to revive lending after previous reductions failed to increase credit flows, threatening to stall an export-led recovery that has been fueled by an 82 percent surge in the price of Urals crude oil this year. The central bank said last month it would also use interest rate reductions to stem speculative capital inflows and avoid currency volatility. “The narrower difference between the levels of domestic and external rates will help stem the ruble’s strengthening,” the central bank said in a statement. Russian equity funds drew record amounts at the end of October, according to EPFR Global. The ruble is the second-best performer among emerging market currencies after the Chilean peso in the past three months, having gained 8.8 percent in the period, according to Bloomberg data. “We don’t think that lower rates will prevent the currency from continuing to strengthen,” Rory MacFarquhar and Anna Zadornova, economists at Goldman Sachs Group, said in an e-mail message before the rate announcement. Goldman predicts that the Russian currency will strengthen to 27 to the dollar over the next six months; it trades currently around 29 to the dollar. Russia is the only member of the four so-called BRIC nations still cutting rates. India last lowered its reverse repo and repo rates in April, China reduced its lending rate in December and Brazil hasn’t cut its overnight rate since July. In Eastern Europe, Hungary, Romania and Serbia are still cutting rates to stimulate demand as international bailout conditions force governments to rein in budgets. Hungary’s Magyar Nemzeti Bank cut the two-week deposit rate Monday to 6.5 percent from 7 percent, the lowest level in more than three years. Policy makers will be looking for signs that the rate cut announced Tuesday feeds through to Russian bank lending after corporate loan books shrank 0.7 percent in September from August, while lending to consumers fell 1.1 percent in the same period, central bank data show. The ratio of non-performing loans climbed in the period to 6.4 percent from 6.2 percent, according to the central bank. “The lending activity of Russian banks is still at a low level, and domestic demand remains insufficient to assure stable growth in output, which determined the necessity of lowering the level of interest rates,” the central bank said.


U.S. Softens Deadline for Deal to Keep Troops in Afghanistan

Abstract: KABUL, Afghanistan — With about a week left in the year, the Obama administration is backing away from a Dec. 31 deadline for securing a deal to keep American troops in Afghanistan beyond 2014, though it is standing by its warning that a total military withdrawal is still possible if delays continue, American and Afghan officials said. The decision is a tacit acknowledgment of what has become obvious in both Kabul and Washington: Neither a hard sell nor soft persuasion has yet induced President Hamid Karzai to go along with the American-imposed timeline for the agreement. It is also an embarrassing turn after weeks of threats by some senior administration officials, including Susan E. Rice, the national security adviser, that a complete American withdrawal from Afghanistan — the so-called zero option — would be considered if Mr. Karzai did not sign the deal by the year’s end. Instead of prompting Mr. Karzai to action, however, setting a boundary appears to have only reinforced his sense that American officials will back down if he refuses their demands — a lesson that has been repeated often over the past 12 years. “I don’t know if I would call it bluffing,” said one American official, who spoke on the condition of anonymity to discuss internal deliberations. “But it looks like that’s what we were doing, and now it looks like Karzai is calling us out.” The official insisted that planning for a potentially final withdrawal in 2014 was still underway, and that it was still a very real possibility. “But if we want a deal,” the official continued, “we’re going to have to wait.” The question now is how long the administration is willing to wait. American officials have been careful in recent interviews not to suggest any new deadlines. “I think it’s pretty obvious why,” one administration official said. The officials spoke only in vague terms about timelines that stretched into the new year, and reiterated earlier statements about how the administration’s preferred outcome is to reach a deal that would permit a small American force, along with some European troops, to stay on to train and advise Afghan soldiers and the police. Mr. Karzai, after initially agreeing to the wording of the security deal, known as a bilateral security agreement, or B.S.A., said he wanted to wait until after the April 2014 presidential elections before signing. But American officials say they need a deal finalized soon, in part to give European allies, who lack the robust logistics capability of the United States military, time to plan for an extended mission in Afghanistan. They also said the longer they waited, the more likely those in the administration — and the public — who want a complete withdrawal would gain support. “We’ve been clear that our preference is to conclude the B.S.A. by the end of the year, and that if we cannot conclude a B.S.A. promptly thereafter, then we will be forced to initiate planning for a post-2014 future in which there would be no U.S. or NATO troop presence in Afghanistan,” said Laura Magnuson, a spokeswoman for the White House. “That has not changed.” With the deal in limbo, the official focus in Kabul has shifted to talks on a companion agreement that would allow other NATO members, such as Italy and Germany, to keep forces in Afghanistan after the alliance’s combat mission formally ends next year. The NATO-led coalition here announced the start of talks in a statement this past weekend. The statement was carefully worded, Western officials said, to head off any talk from Mr. Karzai of cutting out the Americans and trying to work only with European allies, an idea he has previously floated in meetings with Western officials. “The NATO status of forces agreement will not be concluded or signed until the signature of the bilateral security agreement between the governments of Afghanistan and the United States,” the NATO secretary general, Anders Fogh Rasmussen, said in the statement . But Mr. Karzai appears to still be holding out for a better deal with the United States, despite the original accord’s endorsement last month by a grand council of Afghans, known as a loya jirga, and economic signs that public confidence is falling in the absence of an agreement. “I want this security agreement with the U.S.,” a statement from the presidential palace quoted Mr. Karzai as saying in an off-the-record meeting with Afghan journalists on Sunday. “But Afghans’ homes should be protected from American operations, and Afghanistan should not become the battleground of a continuous war.” Mr. Karzai reiterated that a formal peace process with the Taliban must begin before he signs, and that the United States commit itself to Afghanistan’s peace and security. “The conditions that we have put forward for the signing of the security agreement are ridding Afghanistan of instability and war,” Mr. Karzai told the journalists. He would sign, he said, “as soon as they are ready to accept our conditions, because we are not in a rush.” American officials have expressed frustration with Mr. Karzai’s demands, saying that the Taliban have not yet shown a willingness to negotiate seriously. And they emphasize that the United States has spent the past 12 years and hundreds of billions of dollars trying to stabilize Afghanistan. They have also said the deal approved last month by the loya jirga is no longer open for negotiation. But some American officials say there are ways to meet Mr. Karzai’s demands without reopening talks. Addenda could be added, or letters could be sent to Mr. Karzai from President Obama that address the Afghan president’s concerns. First, though, American officials would have to start delivering consistent messages to Mr. Karzai, and to one another, said the American official. “I think if you want to explain what’s going on, you have to look at why it’s confusing,” the official said. “We’ve never spoken with one voice. One person says sign now, another tells Karzai that he has time. It’s not been clear what’s going on.”

Afghanistan
Hamid Karzai
NATO
Status of forces agreement
Anders Fogh Rasmussen
Afghanistan War
Barack Obama


Montreal Defeats Ottawa in Overtime

Abstract: Alex Galchenyuk scored 3 minutes 40 seconds into overtime, giving host Montreal a 3-2 victory over the Ottawa Senators on Friday night that gave the Canadiens a two-games-to-none lead in their first-round playoff series. Max Pacioretty, back from a concussion, and P. K. Subban scored in regulation for the Canadiens, while David Desharnais picked up assists on both goals. Clarke MacArthur and Patrick Wiercioch scored for the Senators, and Mark Stone had two assists. Pacioretty returned to the lineup for the Canadians after sitting out Game 1 with a head injury. Carey Price stopped 29 shots for Montreal. PREDATORS 6, BLACKHAWKS 2 Craig Smith scored the first two playoff goals of his career and added an assist, and Nashville cruised past visiting Chicago to tie their Western Conference opening-round playoff series at a game apiece. The Predators won for the first time since clinching a postseason berth on March 28. Pekka Rinne made 24 saves for the win and even had an assist. Nashville lost its captain, Shea Weber, to a lower-body injury nearly midway through the second period. FLYERS FIRE COACH The Flyers fired Coach Craig Berube after two seasons on Friday, ending the tenure of yet another coach who was unable to deliver a title to Philadelphia. General Manager Ron Hextall made the announcement two days after a news conference in which he left Berube’s fate unclear. Berube went 75-58-28 (.553) with the Flyers and led them to the playoffs last season, but they did not make the postseason this year. He had one season left on his contract. The Flyers went 42-27-10 under Berube in the 2013-14 season and lost a seven-game playoff series against the Rangers.

Ottawa Senators
Playoffs
Max Pacioretty
Craig Berube
Ice hockey
Stanley Cup
Montreal Canadiens


From Housing Haven to Foreclosure Leader

Abstract: STOCKTON, Calif., Aug. 11 — The north end of Clarks Fork Circle in Stockton tells you all you need to know about the depth of the mortgage worries here. On a curve in a handsome new residential development, four of five homes are for sale, at least two of which have already been repossessed by a lender. “Bank Owned!” advertises a flier for one home. “New Low Price!” shouts a sign planted in a different lawn. Once considered a safe alternative to the overheated Bay Area real estate market, Stockton and its streets are now filled with “For Sale” signs and evidence of foreclosures. While hundreds of thousands of people nationwide are being affected by troubles in the lending market, Stockton has the highest foreclosure rate of any city in the country, according to RealtyTrac, a real estate data firm. “It is disturbing, there’s no question about it,” said Mayor Edward J. Chavez, who himself has two houses on the market, with no sales in sight. “A year to two years back, this area was seen as being affordable compared to other areas, the Bay Area, the South Bay. But what was once a vibrant market has kind of hit a brick wall.” A sun-baked city of about 285,000 some 90 miles east of San Francisco, Stockton has seen its population swell over the last decade as commuters have continued to push away from the bay in search of more affordable houses. Average single-family houses here can still be had for $350,000. But many of the recent house deals, brokers and local officials say, were financed by subprime loans, some of which offered 100 percent financing for a small down payment, occasionally even no money down. But those deals quickly soured for new homeowners when higher monthly payments kicked in after two or three years. “It’s gone from the most liberal financing I’ve ever seen a few years ago to the most foreclosures and delinquencies I’ve ever seen now,” said Art Godi, 71, a longtime Stockton real estate agent and the former president of the National Association of Realtors. “And there’s a connection between those two things, obviously.” When the housing market was hot a couple of years ago, Mr. Godi said, house prices here were increasing 20 percent a year. Now, he said, the prices are falling as much as 10 percent to 12 percent a year. The deadening market for houses has only worsened problems for people like Alma Neri, a mother of three boys who bought a modest house in Stockton in 2002 for $223,000. Three years later, Ms. Neri and her husband, Juan, found an even better house — three bedrooms, two and a half bathrooms, a two-car garage — around the corner. The plan was to sell the old house to pay off its mortgage, and live out their days in their dream home. But now, both of the Neris’ houses are languishing on the market, and the debt from two mortgages — and an equity loan they took to remodel the new house — is piling up. “We made bad decisions,” said Ms. Neri, 30, who commutes to her job as a contractor in Pleasanton, about 50 miles to the west. “We’re worried if we don’t sell by the end of the year, we will lose one of them. We just didn’t see the downturn coming.” Within a half mile of the Neris’ new home, there are more than 100 other homes for sale, Mr. Godi said, many of which are foreclosures. Six California cities rank in the top 10 nationwide for foreclosure rates, according to RealtyTrac, with the top three spots — Stockton, Modesto and Merced — situated in the Central Valley, where longtime agricultural towns have turned into small residential cities. California has the third-highest rate of foreclosures in the country, RealtyTrac says, behind Nevada and Colorado. In July, another real estate data firm, DataQuick, reported that the state had its highest level of foreclosure in two decades, with nearly 54,000 notices of default sent to delinquent homeowners in the second quarter of 2007. In May, the California Reinvestment Coalition, a nonprofit group which seeks to promote access to credit in low-income families, wrote to lenders asking for a moratorium on foreclosures. “Immigrants, seniors and people of color are more likely to have been victimized by bad lenders,” said Kevin Stein, the coalition’s associate director. “But what’s evident looking at these numbers is that the problems being faced are cutting across racial and ethnic lines.” In June, several state leaders called for a forum in Stockton to help people avoid foreclosures, but most people had dallied too long to address the problem. “There’s denial,” said State Senator Michael J. Machado, a Democrat whose district includes Stockton and who is chairman of the Banking, Finance and Insurance Committee. “People get into these homes, it’s the American dream, and then they wait too long to go to the lender to say they’re having problems.” Brokers in Stockton are now increasingly offering so-called short sales, in which a seller is asking for less than the value of the house, hoping to pay off the bulk — but not the entirety — of the mortgage. Even so, sales are slow to come, leading to annoyed sellers. “They’re not crazy about us or anybody right now,” Mr. Godi said. “They’ll say, ‘Gee, I lowered the price on my house, why haven’t you sold it?’ And we want to sell it. We don’t get paid until we sell it.” He added, “It’s much better dealing with people if they’re going to make a profit.”

Housing
Foreclosures
Mortgages
California
Building (Construction)


Rose, in Playoff Debut, Outduels Rondo and the Celtics

Abstract: BOSTON — It resembled the kind of clear-out play seen more often in pickup games than in the N.B.A. playoffs. Isolated at the top of the key with 37 seconds left and his team trailing by 1, the Chicago Bulls rookie Derrick Rose was matched against the Boston Celtics ’ Rajon Rondo. After a crossover move , Rose made a beeline to the rim. Paul Pierce arrived to help a step too late — an eternity in Rose’s accelerated time frame. Pierce helplessly knocked the ball off the rim, guilty of goaltending. That was about all the Celtics could do to slow Rose short of slickening the floor. Through much of Saturday’s game, Rose and Rondo exchanged blows like boxers. The Bulls won on points — mostly delivered by Rose and the 6 that Tyrus Thomas added in overtime for a 105-103 victory over the defending champion Celtics in Game 1 of their best-of-seven first-round playoff series. “He has a quiet confidence about him and he’s only going to get better,” Bulls Coach Vinny Del Negro said of Rose, adding, “If people aren’t familiar with Derrick, then they’re not basketball fans.” The Bulls now have the home-court advantage, a crucial component to the Celtics’ title run a season ago, when they did not lose at home in the first two rounds. An injured Kevin Garnett watched the first half from the sideline, then disappeared into the inner sanctum of TD Banknorth Garden. The Celtics’ hopes for a repeat might have left with him. A healthy Garnett is capable of plugging the kind of holes that Rose breezed through for a video-game-like box score. He scored a career-high 36 points, tying Kareem Abdul-Jabbar for the most by a rookie in his playoff debut. He also had 11 assists. Rose was 12 for 12 from the free-throw line, including two attempts that gave the Bulls a 97-96 lead with 22.1 seconds remaining in regulation. An ill-advised foul by the Bulls’ Joakim Noah sent Pierce to the free-throw line. Pierce made his first shot but his second boomeranged out, sending the game into overtime. “I thought it was going in and it went right in and out, but those are the breaks of the game,” Pierce said. In overtime, Thomas’s 21-foot jumper with 50.5 seconds remaining proved to be the winner when Ray Allen missed a shot from the baseline and John Salmons blocked Pierce’s last-ditch attempt. Those were the latest developments in a game that started inauspiciously for the Celtics when Noah dunked 22 seconds after the tip-off. Boston sometimes played passively and mostly selfishly, ending with only 16 assists. Rondo dueled capably with Rose and paced the Celtics with 29 points, 9 rebounds and 7 assists. But Allen missed 11 of 12 shots, and Pierce slumbered through the first half with 4 points before ending with 23. But he also made a costly turnover with 1 minute 41 seconds left in regulation that allowed Thomas a breakaway layup. All Garnett could do was watch after being declared out for the playoffs with a bothersome knee. And he could not even do that — at least not from the bench. Celtics Coach Doc Rivers said he received telephone calls from his coaching brethren after Garnett’s condition was revealed last week. Still, Rivers is not ready to read the Celtics’ obituary, even if the Bulls are willing authors. “Kevin is not in the playoffs,” Rivers said. “I’m not answering Kevin Garnett questions. I didn’t even notice, honestly, until someone told me that he was not on the bench, and I could care less.” The Bulls are trying to duplicate their 2007 playoff sweep of the Miami Heat, which was the reigning champion. As Saturday’s game went on, their confidence soared. Ben Gordon scored 20 points, and Noah had 11 points and 17 rebounds. They outscored the Celtics by 24-13 in fast-break points. Afterward, Rose’s placid demeanor betrayed his performance. He played unafraid of Boston’s championship pedigree and even jawed with Pierce early in the game. “I just thought about it like I was playing in a regular game,” Rose said. He had to. He did not have any experience to draw from. But the Bulls handed him their franchise from the moment they selected him first over all in the 2008 N.B.A. draft . Rose has not disappointed. Rondo conceded that defending Rose wore on him physically and mentally. “I’ll be fine Monday,” Rondo said. “Just right now, I’m extremely tired.” Chicago had not beaten the Celtics in 10 postseason games since the days of the Basketball Association of America, the forerunner of the N.B.A., when the Chicago Stags beat Boston in the 1948 quarterfinals. When the Bulls erased the 9-point lead that Boston carried into halftime, Rose responded with 12 points in the third quarter, leading a surge that delivered an early reality check to the Celtics. “It’s big,” Gordon said. “I feel like we have nothing to lose. The pressure is not on us.”

Chicago Bulls
Boston Celtics
Basketball
Playoff Games
Rose Derrick
Rondo Rajon
Garnett Kevin
Pierce Paul (1977- )


Select Home Care Weighs New Wage and Labor Regulations

Abstract: SELECT HOME CARE, based in Westlake Village, Calif., offers 24-hour nonmedical care to elderly clients in California, Nevada, Utah, Colorado, Oregon and Texas. It has nine offices, 500 employees and more than $10 million in annual revenue. THE CHALLENGE Select is confronting an array of regulatory changes. A federal rule will extend the minimum wage and overtime protections of the Fair Labor Standards Act to nonmedical caregivers when it takes effect in January. The company’s home state, California, has already enacted legislation that added a Domestic Worker Bill of Rights to the California Labor Code. Under the new guidelines , which went into effect Jan. 1, nonmedical home care employees are entitled to overtime pay for any more than 45 hours of work a week. In addition, California’s minimum wage will rise to $9 an hour on July 1 . For home care companies like Select, these changes mean shorter shifts, more employees and higher wages. THE BACKGROUND Established in 2005, Select Home Care has been profitable since its first year, according to Dylan Hull, who is chief executive and one of the company’s owners. Select offers 24-hour care, helping seniors with personal care, meal preparation, medication monitoring and assorted dementia-related problems. Traditionally, caregivers have worked 12-hour shifts as well as live-in shifts that can last 24 hours. Although caregivers must always be vigilant, their days have allowed for downtime, during which they might read books or watch television with the clients. Under the old rules, caregivers could work 70 to 80 hours a week. With the new state legislation, they are limited to working 45 hours a week without overtime pay; next year, under the new federal regulations, they will be limited to 40 hours a week without overtime. This will reduce pay for individual caregivers and increase expenses for Select. Under the old rules, the company paid 24-hour caregivers $120 a day, and they could work seven to 14 days at a stretch. Under the new state regulations, caregivers can collect $156 a day (and $175.50 starting July 1), but they are effectively restricted to working five days a week, which will result in a loss of pay for some. At the same time, the additional shifts and increased wages are likely to increase costs for Select — and thus for many families. To provide 24-hour care, Select would have to more than double its daily rates, to $480 from $200. “How many clients can afford that?” Mr. Hull asked. Because nonmedical home care is not covered by Medicare, families pay for care either out of pocket or through long-term care insurance. Mr. Hull said that he was concerned that the kind of care his company offers will simply become too expensive for families and that he could lose 20 to 25 percent of his annual revenue. THE OPTIONS Mr. Hull has been rethinking his business model. Entering 2014, he believed he had three options. Option 1: He could keep his current model but increase rates to account for the higher costs. He could comply with the new regulations by breaking the 24-hour shifts into three eight-hour shifts and charging more to cover the added wages. This option would also increase the workload for Select’s managers, who oversee staffing shifts and hiring. “We will always have to be wary of not going into overtime,” Mr. Hull said. For instance, if caregivers are awakened during their eight hours of sleep time, they have to be compensated — “even if it’s just for 20 minutes,” he said. In addition, he would need a larger pool of employees since they would be working 40-hour weeks instead of 70- or 80-hour weeks. There would be further expense to hire and train the new staff members. At the Westlake Village branch, where Mr. Hull is stationed, he had 30 24-hour caregivers in 2013; with this option, he figured, he would need to hire 20 more. And each day, he would have to pay them $20 extra in wages, an additional cost of $30,000 a month for wages. Option 2: Select could turn its employees into independent contractors. As independent contractors, caregivers would have to assume additional responsibilities, including managing their own payroll taxes and arranging their own insurance. And seniors would have to assume the liabilities associated with having caregivers in their homes. In the past, Select has run background checks on all caregivers, assumed all liability while the caregivers are in the home and provided workers’ compensation. In addition, employees get training. “The current employee is 100 percent protected by our corporation,” Mr. Hull said. To turn its work force into independent contractors, Select would have to pay a one-time fee of about $150 per employee, mostly to update legal documentation and procure a business license for each of the contractors. At the same time, Select would save the 15 percent of payroll that it has paid in payroll taxes and the 18 percent, or so, that it has paid for workers’ compensation insurance. But Mr. Hull worried about giving up his ability to demand high-quality care from the caregivers. “An independent contractor cannot be managed,” he said. “If so, they are not a true contractor and can be defined as an employee.” Thus, he said, Select would have limited say on the quality of care delivered and would be subject to government audits intended to ensure that the contractors really are contractors. Option 3: Select could serve as a broker, helping families identify caregivers. For its services, the company would get a one-time fee instead of a continuing stream of revenue. Select would also have far fewer employees and thus far lower labor costs. “That’s 50 percent of our expenses, which is why it’s a tempting thought,” he said. He estimated that he could charge a one-time fee of $1,500 to the client. In 2013, the Westlake Village branch had approximately 20 clients a month requesting 24-hour care, yielding $120,000 in revenue each. With a broker fee, Select would get $30,000 a month for 20 clients — assuming it could get 20 new clients every month. With this approach, Select would not have to pay the caregivers, who would be independent contractors, but would have to invest more in marketing. “No option is ideal for all parties,” Mr. Hull said. WHAT OTHERS SAY Elizabeth Murphy, an employment lawyer and partner at Manning & Kass in Los Angeles, focuses on the home care industry: “On balance, I think Option 1 is the least risky from a legal perspective, but very costly. It allows caregivers, although receiving less money in the long run, to at least maintain the benefits of being protected under the law. And it prevents the market from becoming an off-the-grid opportunity for abuse on both sides.” Phil Bongiorno, executive director of the H ome Care Association of America : “The changes to the Fair Labor Standards Act companion care exemption by the Obama administration present real challenges for seniors and individuals with disabilities who need access to these necessary personal care services. Of the options presented, H.C.A.O.A. continues to support an employment-based model that guarantees caregivers are bonded, trained, fulfilling their employer/employee tax obligation and subject to supervision and oversight.” Jeff Huber, president of Home Instead Inc. , a private home care company operating on a franchise model, with headquarters in Omaha: “Home Instead has faced similar decision points as Mr. Hull. Of the three options presented, I’d lean toward the first, since I feel the other two options would have a negative impact on the quality of care for the seniors.” THE RESULTS Offer your thoughts on the You’re the Boss blog at nytimes.com/boss. Next week on the blog, we will update Select Home Care’s progress.

Select Home Care
California
Dylan Hull
Jobs
Elderly care,Geriatrics
Small business


A Deal on Foreclosures Inches Closer

Abstract: About one million homeowners facing foreclosure could have their mortgage burden cut by about $20,000 each as part of a long-awaited deal taking shape among state attorneys general, federal officials and the nation’s largest mortgage servicers. But a final agreement remained out of reach Monday despite political pressure from the White House, which had been trying to have a deal in hand that President Obama could highlight in his State of the Union address Tuesday night. The housing secretary, Shaun Donovan , met on Monday in Chicago with Democratic attorneys general to iron out the remaining details and to persuade holdouts to agree with any eventual deal. He later held a conference call with Republican attorneys general. But as he renewed his efforts, Democrats in Congress, advocacy groups like MoveOn.org and several crucial attorneys general said the deal might be too lenient on the banks . The agreement could be worth about $25 billion, state and federal officials with knowledge of the negotiations said, with up to $17 billion of that used to reduce principal for homeowners facing foreclosure. Another portion would be set aside for homeowners who have been the victim of improper foreclosure practices, with about 750,000 families receiving about $1,800 each. But bank officials said Monday that the total amount of principal reduction and reimbursement would depend on how many states eventually sign on. The government and bank officials would speak only on the condition of anonymity because the discussions were continuing. Tom Miller, the attorney general of Iowa , said Monday that an agreement with the nation’s five largest mortgage servicers — Bank of America , JPMorgan Chase , Citigroup , Wells Fargo and Ally Financial — would not be reached “anytime this week.” In a letter to administration officials, Senator Sherrod Brown of Ohio said the settlement as reported — its details were not fully known — was too small and would allow banks to pass on the cost of the settlement to “middle-class Americans” whose pension funds hold soured mortgage securities. In addition to disagreements over the total amount, negotiations have been held up over the question of how much latitude authorities would have in pursuing investigations into mortgage abuses before the housing bubble burst in 2007. The banks are pushing for a broad release from future claims, but several attorneys general, including prominent figures like Eric Schneiderman of New York and Martha Coakley of Massachusetts , have demanded a tougher line on the banks. Some state prosecutors have raised concerns that the settlement could prevent them from investigating broader claims. Others have said that their citizens would be shortchanged if there were no guarantee that the relief would be distributed geographically. This month, about 15 Democratic attorneys general who shared concerns about the course of the settlement talks met in Washington, including Ms. Coakley, Mr. Schneiderman, Catherine Cortez Masto of Nevada and Beau Biden of Delaware , who is a son of Vice President Joseph R. Biden Jr. A week after the meeting, Mr. Donovan announced that a deal was “very close.” But none of those four attorneys general attended the meeting on Monday. Neither did another important holdout, Kamala Harris, California ’s attorney general, who opposed earlier proposed agreements. In a bid to win support from California officials, Mr. Donovan proposed earmarking $8 billion in aid for beleaguered California homeowners, but that left other state attorneys general incensed, according to an official familiar with the negotiations. “Attorney General Harris has consistently and repeatedly expressed concern about protecting her ability to investigate wrongdoing in the mortgage arena, and that remains a key lens through which she will evaluate any proposals,” her spokesman said Monday. A spokesman for the Department of Housing and Urban Development declined to comment. In a statement, Danny Kanner, a spokesman for Mr. Schneiderman, said “any settlement must not shut down ongoing investigations or release claims against the banks that must still be pursued.” Ms. Coakley also promised to continue to pursue her own lawsuit. Whether California or other large states participate in an agreement will determine how much the banks agree to pay for the eventual settlement, according to bank officials. Both federal and state officials emphasized that the liability for past practices remained at the heart of the delay, rather than the size of the monetary penalties and other payments. In addition, they noted that no release from criminal violations was being discussed, only civil actions. ”There are a few issues that still need to be resolved, but everyone sees a path forward,” said one government official involved in the talks. “We’ve never been closer than we are now.” The billion-dollar figures being tossed about are large, but they pale in comparison with the fallout from the housing bust, which has led to foreclosure proceedings against roughly eight million Americans. About 11 million more own homes that are “underwater,” meaning the amount of money owed now exceeds the value of the home. They owe, on average, $45,000 to $50,000 more than their home is worth, according to Mark Zandi of Moodys Analytics. The deal may help about one million homeowners with an average debt reduction of $20,000. The proposed settlement is “not going to be enough,” said Kathleen C. Engel, a law professor and a co-author of “The Subprime Virus.” She added that the deal was at least as good for the banks as for homeowners, if not better. “They could be hit with 50 different lawsuits from each of the states, for a lot more money,” she said. Senator Brown of Ohio and Representative Brad Miller of North Carolina urged the administration to more thoroughly investigate conduct that contributed to the housing bubble. Mr. Miller said there were still too many unanswered questions about a possible settlement, like whether banks would be allowed to pass the costs of the settlement on to those who invested in mortgage-backed securities, particularly pension funds. Then, he added, there was the issue of immunity from past misdeeds. “Will this settlement really hold the banks accountable, or will the settlement be a get out of jail free card?” he said. “Has there been an independent investigation of the banks’ foreclosure practices? Will the penalties really make banks think twice about violating the laws in the future? There are more questions than answers at this point.” Since the effort by the attorneys general to investigate foreclosure abuses was started in the fall of 2010, multiple deadlines to get a deal done have passed without an agreement. The new goal, negotiators said, is Feb. 6.

Foreclosure
Attorney general
Banking and Finance
Mortgage loan
US Politics


Afghan Captors Free Canadian After 4 Weeks

Abstract: KABUL, Afghanistan (AP) — A Canadian journalist who had been held hostage for four weeks in Afghanistan was freed Saturday, Afghan and Canadian officials said. The journalist, Mellissa Fung, a reporter for the CBC, was kidnapped Oct. 12 after reporting in a refugee camp in Kabul. Adam Khan Serat, spokesman for the provincial governor of Wardak Province, Afghanistan, said Ms. Fung was freed after tribal elders and provincial council members negotiated her release. He said there was no ransom involved, as did Prime Minister Stephen Harper in announcing the release at a news conference in Ottawa. Ms. Fung was at Canadian Embassy in Kabul, the CBC said Saturday in a statement. “Mellissa will undergo a full medical evaluation, but early indications are that she is well,” the statement said. She was the second abducted female journalist to be released in two days. On Friday, a Dutch journalist kidnapped just outside Kabul was freed unharmed after a week in captivity.


In Miami, Astonishment Over Action and Disagreement Over Cuba News

Abstract: MIAMI — From the raucous cafecito counter at Versailles Restaurant, the city’s Cuban touchstone, to the noisy streets in and beyond Little Havana, Miami’s Cuban exiles and immigrants expressed astonishment over the seismic news that the United States was liberalizing relations with Cuba . But, in a city with more Cubans than anywhere but Cuba, agreement over the momentous announcement ended there. For some — the aging generation of Cuban-American traditionalists who take a hard line on Cuba policy — astonishment quickly turned to acrimony. Denouncing the move as wrongheaded and disastrous, they viewed President Obama’s decision to establish closer travel, diplomatic and export ties to Cuba as capitulation to a dictatorship. In return, they said, Mr. Obama received no guarantees from Cuba’s president, Raúl Castro, and no commitment to human rights. “There have been too many deaths, too much blood and too much terror, and there is no reason to throw them a life preserver,” said Alex Rodriguez, 63, who stood outside Versailles, describing himself as a man who wears “two hats” — American and Cuban. “The Cuban people, from the human rights perspective, still won’t have the freedom to vote, the freedom of expression, the freedom of assembly, the freedom to determine their own economic future. What do they get: maybe a little bit better of an economic situation.” Yet, in the same mix at Versailles and further afield in the storefronts lining Little Havana, a different wave of people applauded the decision, calling it past due. They make up a less vocal, less politically active but nevertheless large part of the city’s makeup — recently arrived Cubans who continue to stream in from the island and younger Cuban-Americans who are less emotionally entangled in the relationship between Cuba and Miami. Image People watched President Obama speaking on a television at the El Rey de Las Fritas restaurant in the Little Havana neighborhood in Miami on Wednesday. Credit Joe Raedle/Getty Images For them, the announcement is recognition that in five decades of Cold War, anti-Castro sanctions have failed to achieve their goal: Bring down the Castro brothers and usher democracy into Cuba. “I think it’s time to leave all that behind,” Yadira Sebasco, 36, who was born in Camagüey, Cuba’s third-largest city, and moved to Miami 11 years ago, said as she sat in her office at a travel agency that helps book trips to the island. “You have to live in the present.” Even some of the “históricos,” as the older generation is called, have softened their views, recognizing the lack of democratic progress in Cuba. Laureano Vilches, 71, stewed for decades over the fact that his family’s business, a refrigerated warehouse in Havana, was seized by the communist government. But today, he has set aside his outrage. “As far as I’m concerned, this can only be good for the Cubans who are still there, and they’ll live a better life economically,” said Mr. Vilches, who went 40 years without setting foot in Cuba but now visits every couple of months. “I don’t stay angry anymore.” On a practical level, Mr. Obama’s executive action is expected to make it easier for Americans and Cuban-Americans to travel and send more money to people in Cuba and for businesses to export more approved goods to the island. Americans will no longer have to load up on dollars for their trips — the only option for most Americans visiting the island. Soon, they will be able to use their credit cards and bring home more Cuban products. This loosening of restrictions will be a boon to some businesses in Miami, particularly those who ferry people and goods to Cuba. How America’s Relationship With Cuba Will Change Some trade and travel restrictions will be eased. Others depend on congressional action. “I think you will see an exploding travel industry emerging overnight and you will see investment now that is, in essence, sanctioned,” said Fernand Amandi, a managing partner of Bendixen & Amandi International, which tracks the changes in Cuban-Americans in Miami through its polling. “It has the potential to be a watershed moment.” Others reminded that Cuba has had strong ties with many European and Latin American countries, yet no democracy has resulted. “Where are the changes?” Mr. Rodriguez asked. But, in Miami, Mr. Obama’s decision touched on something more profound than just esoteric foreign policy. Cuba is personal here. It is about sisters who long to share a plate of picadillo across the dinner table, but cannot. It is about the son who left his father long ago across the Florida Straits. And it is about the grandmothers and grandfathers who arrived two generations ago and have embraced the United States but cannot bear to simply bury their sorrow and anger just because it is now considered old-fashioned. Their sadness is not easily shaken off. It is rooted in their thoughts of lost homes, the deaths of friends and relatives, the island’s tropical transcendence and the identities they were forced to abandon so many years ago. “No matter how good you feel in this country, it’s never going to feel like being in your own land,” said Ramon Bermudez, 86, as he leaned on his cane in Domino Park, where older Cubans gather daily to exchange barbs and slap dominoes on tables. Others, many of them recent arrivals, want to try a new approach. Apolitical, eager to steer clear of the stridency that the Cuba debate generates here, they say their aim is simple: to help their families on the island. Image Enrique Diaz, center, who is a Cuban, played dominoes with a group of friends at Domino Park in Miami’s Little Havana neighborhood on Wednesday. Credit Angel Valentin for The New York Times Hearing the news after she arrived at her job as a manicurist, Yudis Perez said it had been five years since she last saw her parents in Cuba, a long and painful separation. Perhaps now, she said, it will be easier and cheaper to reunite. “It should have happened long ago,” said Ms. Perez, who left Matanzas for Miami 10 years ago. “If this succeeds, it will be good for Cubans here and good for Cubans there.” While all Cuban-Americans here applauded the release of Alan Gross, who had spent five years in a Cuban prison, many had harsh words for Mr. Obama’s decision to release three Cuban spies. The spies were members of the Cuban Five who had infiltrated Brothers to the Rescue, a group of pilots who would scan the sea for Cuban immigrants. One of the three spies had been serving a life sentence for murder conspiracy in the 1996 downing of one of the planes, which killed four Cuban-Americans. Standing in the throng at Versailles, Miami’s mayor, Tomás Regalado, said the announcement would do little to steer the island toward democracy. Mr. Obama, he said, is giving the benefit of the doubt to a terrorist state. “This is not a political opening to Cuba,” Mr. Regalado said. “This is a public relations movement.” Susan Kaufman Purcell, the director of the Center for Hemispheric Policy at the University of Miami, said that both optimism and skepticism were warranted in Wednesday’s announcement. “This is a dictatorship,” she said, adding that Mr. Castro’s economic reforms have “always looked more promising than they actually were.” Sitting on a bench in the shade at Domino Park, Jorge Alonso, 86, took the long view in a narrative that has already seemed interminable for many here. “Everything that has a beginning must have an end,” Mr. Alonso said. “On the day you least expect it, Cuba is going to be free.”

Miami
Cuba
Florida
Cuban American
Raul Castro
Embargoes Sanctions
Barack Obama


State Makes Bid to End Costly Tax-Refund Loans

Abstract: New York officials filed civil complaints on Thursday against two tax preparation firms that offer high-interest loans against income-tax refunds, saying the companies had aimed the loans at low-income black and Hispanic families and military families in violation of state antidiscrimination laws. The two firms, Jackson Hewitt and Liberty Tax Service, are among the largest tax-preparation companies in the country, with hundreds of thousands of customers each tax season. Jackson Hewitt and Liberty Tax each team up with banks to offer high-interest, short-term loans known as “refund anticipation loans,” based on customers’ estimated income-tax refunds. Such loans can carry annualized interest rates as high as 700 percent — though the period of the loan is normally days or weeks — and have been called predatory by some advocates. The complaints ask that the firms stop the practice. The tax preparation firms earn hundreds of millions of dollars annually by charging administrative and processing fees on top of those interest payments, even though most taxpayers who file online can get their federal income tax refund directly from the Internal Revenue Service, at no cost, within 10 days of filing, according to state officials. In an interview, John T. Hewitt, the founder and chief executive of Liberty, denied that Liberty marketed the loans specifically to black and Hispanic families or military families, and said that the company did not collect data on its customers’ race or ethnicity. He also said that refund loans had been around for decades and that the company would vigorously contest the complaint. “I guess the timing is not a surprise,” Mr. Hewitt said of the lawsuit. “I think they want a little publicity.” A spokeswoman for Jackson Hewitt said the allegations against the firm were “without merit.” According to one outside study cited in the complaints, in New York, the loans are made disproportionately to lower-income blacks and Hispanics, as well as to people in the military and their families. “You can focus on the abusiveness of the product itself, which other entities have done, but the most egregious thing is that they target the most vulnerable people in the community,” said Kumiki Gibson, commissioner of the state’s Division of Human Rights. “They are targeted specifically for these products because of their status as people of color, people in the military.” State officials said some customers end up owing the firms more than they get in refunds, because the interest and fees are so high and because the refund estimates are often inaccurate. The complaints also say that the loans are undermining federal tax credits intended to support the working poor, like the Earned Income Tax Credit. Nationwide, according to a study by the National Consumer Law Center, half of all people who obtain the refund loans also get the tax credit. Refund-anticipation loans have attracted scrutiny in recent years from officials in several other states. But Thursday’s complaints appear to be the first based on a state’s antidiscrimination laws. New York is one of only a handful of states where those laws make the families of military personnel a protected class along with racial and ethnic minorities and other groups. Over a 10-month investigation, officials said, the Division of Human Rights amassed several years’ worth of statistical evidence indicating that the loans had been marketed to those groups. The complaints also rely on outside data, like a study of tax returns from 2002 to 2005 by the Neighborhood Economic Development Advocacy Project, a New York-based advocacy group for low-income people.

Liberty Tax Service
Income Tax
Taxation
Jackson Hewitt Tax Service Inc
New York State
Minorities (US)


Suggs Signs Through 2018

Abstract: Linebacker Terrell Suggs signed a four-year extension with the Ravens on Monday that saves them salary-cap room and puts him in a position to finish his career in Baltimore. Suggs, 31, had a six-year deal that would have expired after the 2014 season. Now he is signed through 2018. ■ Ravens running back Ray Rice was arrested in an Atlantic City casino early Saturday after an argument with his fiancée turned physical. The police said Rice, 27, and Janay Palmer were arrested on simple assault charges. ■ The University of Connecticut said that the running backs coach Ernest Jones, who told The Hartford Courant last month that he and others would make sure UConn’s players understood that “Jesus Christ should be in the center of our huddle,” had resigned.


Holy Water for Pilgrims, via the Mail

Abstract: Every summer, hundreds of thousands of Indians, barefoot and draped in orange clothing, make a 100-mile pilgrimage on foot to fetch water from the sacred Ganges River that they then offer at their local temples to Shiva, the Hindu god of destruction. This year, they have a less arduous option: The postal service is using its 155,000 offices across India to deliver holy water from the Ganges — for far less than $1 a bottle. As one postal official put it, “If Muhammad cannot go to the mountain, the mountain comes to him.” Ravi Shankar Prasad, India’s union minister of communication and information technology, led the initiative. “If the postman can deliver mobile phones, saris, jewelry and apparel, then why not Ganga water?” he asked in announcing it last month, using the Hindu name for the river. Image Sealed holy water from the Ganges River for sale at a post office in Kolkata, India, last month. Credit Piyal Adhikary/European Pressphoto Agency The water is drawn from two sources: Gangotri, a small town in the Greater Himalayan Range and the origin of the Ganges River; and Rishikesh, one of the holiest cities for Hindus. The postal service has the water bottled — at an undisclosed location — with minimal labeling, holding 7 or 17 ounces. The smaller bottles from Rishikesh, which is easier to access, sell for 15 rupees, or 22 cents; those from Gangotri, where access roads have been blocked by monsoon rains, cost 25 rupees, or 37 cents. Postal officials said the revenue covered only the costs. Though it is heavily polluted by sewage and industrial waste, the Ganges provides water to 500 million people for everyday use, and for all those offerings to Shiva. Priests in Gangotri have protested the government initiative, fearing a decrease in pilgrims, though it is too early to tell whether the road is less crowded. In any case, the postal service reported that it had delivered 70,000 bottles of the holy water in the program’s first few weeks.

Water
Pilgrimage
Ganges
Postal Service
Hinduism
Garhwal and Rishikesh India


Recalls Depress Johnson & Johnson’s Quarterly Profit 12%

Abstract: Johnson & Johnson , hurt by product recalls and a weak economy, posted a 12 percent decline in profit and a 5.5 percent decline in sales for the fourth quarter on Tuesday. The company reported net income of $1.94 billion, or 70 cents a share, down from $2.21 billion, or 79 cents a share, a year earlier. Excluding one-time items, earnings would have been $1.03 a share, matching analysts’ expectations. The company took an after-tax charge of $922 million for litigation settlements, a recall of poorly fitting DePuy hip implants and an increase in its product liability reserve. The company’s revenue fell to $15.64 billion from $16.6 billion a year earlier. It was also below the $16 billion expected by analysts polled by FactSet. Johnson & Johnson has been hurt by 17 recalls since September 2009, covering multiple McNeil Consumer Healthcare products, plus contact lenses and hip replacements, and the lengthy shutdown of one of the factories involved. Lost revenue from the recalled products reduced 2010 sales by $900 million, 50 percent more than Johnson & Johnson predicted last year. The chief executive, William C. Weldon, tried in a conference call to reassure analysts and investors that the company had its manufacturing and other problems under control. But shares of Johnson & Johnson, which is based in New Brunswick, N.J., fell $1.14, or 1.8 percent, to $61.08. Johnson & Johnson also forecast a full-year profit of $4.80 to $4.90 a share, below the $4.99 expected by analysts. Results also were affected by the weak global economy squeezing consumer health spending, the impact of the health care overhaul in the United States and European government demands for lower prices. During a conference call Tuesday, Mr. Weldon said pricing pressures from hospitals and governments would not go away soon, if ever, but that expected continued sales growth in emerging markets, and several important new drugs awaiting approval, would help J.& J. recover. Mr. Weldon, 62, also said the company was committed to restoring its over-the-counter medicines to the quality level consumers expected. Sales of consumer products like Tylenol, Benadryl and Rolaids, all the subject of recalls over product contamination and other problems, were down the most. Sales in that division fell 15 percent to $3.6 billion, with a 29 percent decline in the United States. Sales of prescription drugs, which include Remicade for immune disorders and Concerta for attention deficit disorder, fell nearly 5 percent to $5.71 billion. The medical device division, now J.& J.’s largest, did best with sales up 0.2 percent to $6.32 billion.

Johnson & Johnson
Company Reports
McNeil Consumer Healthcare
Recalls and Bans of Products


Boston Scientific Loses Patent Trial

Abstract: A jury in Texas has ruled that Boston Scientific ’s drug-coated stents infringe a 1997 patent issued to a radiologist in Princeton, N.J., and has awarded the inventor $431 million in damages, Boston Scientific said Tuesday. The suit by the patent holder, Dr. Bruce N. Saffran, did not seek to halt sales of the stents. Boston Scientific, based in Natick, Mass., said that it would first try to overturn the decision in post-trial motions in the federal court in Marshall, Tex., where the case was heard and the jury reached its verdict late Monday. If that effort fails, the company said, it expects to be able to appeal the outcome successfully in the United States Court of Appeals for the Federal Circuit, in Washington. The company said that because it was confident it would win on appeal, it did not plan to set aside money to pay the damages award. Shares of Boston Scientific rose 11 cents Tuesday, to $12.52. Dr. Saffran’s patent primarily described how fractures could be healed more quickly if a thin, flexible sheet of material with tiny pores is used to control the flow of large molecules into and out of the wounded bone. But it also described how the invention could apply to stents, which are used to prop open arteries after blockages have been cleared. The patent said that Dr. Saffran’s porous “sheet,” when wrapped around a bare metal stent , could control delivery of drugs to a blood vessel wall. Boston Scientific’s drug-coated stents — the Taxus Express, introduced in 2004, and the yet-to-be-released Liberté — accomplish the same thing with drug-infused layers of polymer on top of a metal stent. Dr. Saffran filed his infringement lawsuit against Boston Scientific in 2005.

Stents (Medical Devices)
Inventions and Patents
Suits and Litigation
Boston Scientific Corporation


Busch Fends Off Rookie

Abstract: Kyle Busch held off the rookie Kyle Larson at the finish to win the Nationwide Series race at Bristol Motor Speedway in Tennessee.


Science Will Suffer Under Trump’s Travel Ban, Researchers Say

Abstract: Researchers, academic officials and science policy makers are expressing alarm at President Trump’s order barring entry to the United States to people from certain predominantly Muslim countries, saying it could hinder research, affect recruitment of top scientists and dampen the free exchange of scientific ideas. The executive order, issued on Friday and clarified somewhat over the weekend by administration officials, potentially affects thousands of students and researchers from Iran, Iraq and five other countries. Foreigners fill the undergraduate and especially graduate ranks at many American universities, and newly minted Ph.D.s from overseas flock to the United States for research and teaching positions in academic laboratories. Mary Sue Coleman, the president of the Association of American Universities , said that by one estimate, there were about 17,000 students from the seven countries at American universities. “I’m concerned about it hampering our ability to recruit outstanding graduate students,” said Samuel L. Stanley Jr., the president of Stony Brook University on Long Island. Dr. Stanley spent the weekend monitoring the work of immigration lawyers in a successful effort to release a Stony Brook graduate student from Iran, Vahideh Rasekhi, who was en route to Kennedy Airport when the order was issued and was detained after she landed. Image Kathleen Cullen, a professor of biomedical engineering at Johns Hopkins and Mr. Zobeiri’s supervisor. His being kept out of the United States, she said, is “a major impediment and is slowing the pace of research in my group.” Credit Will Kirk/homewoodphoto.jhu.edu “Immigration into the United States is tremendously important to science,” said Soumya Raychaudhuri, a Harvard Medical School professor whose Iranian postdoctoral researcher, Samira Asgari, was barred on Saturday from boarding a flight to begin her job in his laboratory at Brigham and Women’s Hospital in Boston. “There are other countries competing for this talent pool, and walking away from that jeopardizes our standing.” Some foreign universities, while condemning the ban, also pointed out that they still welcomed students and researchers from anywhere. The University of British Columbia announced the establishment of a task force, with an initial budget of 250,000 Canadian dollars (about $190,000), “to determine what assistance the university can offer those affected.” Since the restrictions, some institutions, including the University of Pennsylvania and the University of California system, have advised students or faculty members from Iran, Iraq and the other affected countries not to travel overseas until further notice. The order could prevent many foreign researchers from making short-term trips to attend conferences and other scientific meetings overseas for fear of not being able to return. The restrictions could also affect meetings in the United States, as some foreign scientists would not be allowed to travel here. The country’s largest general scientific organization, the American Association for the Advancement of Science , said it was worried that the restrictions might reduce attendance at its annual meeting in two weeks in Boston. Hundreds of foreigners normally attend the conference. “We are of course concerned that this issue may affect scientists and students traveling to Boston,” said Tiffany Lohwater, an official with the association. She said the organization was considering alternative measures, including free live-streaming of sessions, for those who could not attend. Lives Rewritten With the Stroke of a Pen When President Trump signed his executive order on immigration, he upended the fates of people who had waited for years to get into the U.S. Here are portraits of those affected by the ban. Jennifer Golbeck, a professor of computer science at the University of Maryland, said her department had a number of Iranian students and researchers. Using social media, Dr. Golbeck in recent days has organized a database of people willing to shelter scientists and others who were in transit to the United States and were halted by the order. “There’s a lot of people from these seven countries,” Dr. Golbeck said. “And suddenly there’s this possibility that faculty members, students, postdocs and others who are outside the country for one reason or another suddenly can’t come back.” Solmaz Shariat Torbaghan, an Iranian neuroscience researcher at New York University who was awaiting a green card, said the order would force her to soon make a decision: stay and take her chances, or move to Canada. “My partner and I just moved into a new place here, we are waiting for our furniture, and were hoping to have our parents visit us in a couple of months, which is not a possibility anymore,” she said. “Now, I don’t know what’s coming next.” The uncertainty, she added, is not good for her research colleagues, either. “People in my lab are very supportive,” she said, “but in an experimental lab, people need to know they can count on you, that you’re not going to be suddenly gone and leave the project.” The order may also affect work at some of the country’s most prestigious medical institutions. Eleven patients from the seven affected countries, which also include Syria, Sudan, Libya, Somalia and Yemen, were planning to travel to Johns Hopkins University for medical treatment within the next 90 days, said Pamela Paulk, the president of Johns Hopkins Medicine International. All have visas, she said, but now it is not clear whether or when they may come. “We are taking steps to see what the ban means for them,” she said. “Right now the ban is vague, and we don’t know if there will be health exceptions.” She said that patients who travel from the Middle East to the United States for treatment generally have severe illnesses that cannot be treated in their home countries, and need complex treatments like neurosurgery, heart operations or bone marrow transplants for cancer or blood diseases. Some cannot afford, medically, to wait. Johns Hopkins may also lose at least one graduate student. Omid Zobeiri, 28, is an Iranian citizen who began working on his doctorate in biomedical engineering in September 2015 at McGill University in Montreal. His mentor and supervisor at McGill moved to Johns Hopkins last summer and hoped to take Mr. Zobeiri with her so he could continue the research he had begun in her laboratory. Mr. Zobeiri applied for a visa during the summer, but had not received one yet when the ban was announced on Friday. “After this ban, I basically give up right now, or wait some months,” Mr. Zobeiri said. “I don’t know my future.” Kathleen Cullen, Mr. Zobeiri’s supervisor and a professor of biomedical engineering, described him as “phenomenally talented and a wonderful scientist,” and said he had been selected from among many applicants. She said his being kept out of the United States was “a major impediment and is slowing the pace of research in my group.”

Research
Executive Orders
Immigration
Visas
Foreign Workers
Donald Trump


Subway Workers Ordered to Halt Their Strike in Athens

Abstract: The government invoked an emergency measure on Thursday to order striking subway workers in Athens back to work, with those defying it risking dismissal, arrest and jail in an escalating standoff over austerity measures. In a swift response, unions announced immediate strikes that halted all public transportation across the capital for the rest of the day. Subway employees angered by pay cuts that they say will reach 25 percent of their salaries had defied a court order to return to work, sending their strike into an eighth day. With traffic clogging the capital’s major streets, the government announced a civil mobilization order for the Athens subway. Under the “peacetime emergencies” law, striking employees must return to work or face arrest and layoffs.

Subway
Strikes Labor
Public Transit
Jobs
Greece


Barcelona Advances in Copa del Ray

Abstract: David Villa made his case for returning to Barcelona’s starting lineup by scoring twice in a 5-0 win over Cordoba that sealed a place in the Copa del Rey quarterfinals.

David Villa
Soccer
Barcelona Soccer Team
Cordoba Spain


Deciding Who Sees Students’ Data

Abstract: WHEN Cynthia Stevenson, the superintendent of Jefferson County, Colo., public schools, heard about a data repository called inBloom, she thought it sounded like a technological fix for one of her bigger headaches. Over the years, the Jeffco school system, as it is known, which lies west of Denver, had invested in a couple of dozen student data systems, many of which were incompatible. In fact, there were so many information systems — for things like contact information, grades and disciplinary data, test scores and curriculum planning for the district’s 86,000 students — that teachers had taken to scribbling the various passwords on sticky notes and posting them, insecurely, around classrooms and teachers’ rooms. There must be a more effective way, Dr. Stevenson felt. InBloom, a nonprofit corporation based in Atlanta, seemed to offer a solution: it could collect information from the district’s many databases and store it in the cloud, making access easier, and protect it with high-level encryption. The company has name-brand backing: $100 million in seed money from the Bill and Melinda Gates Foundation along with the Carnegie Corporation of New York. Beyond storing data, it promised to help personalize learning — by funneling student data to software dashboards where teachers could track individual students and, with the right software, customize lessons in real time. Also, districts could effortlessly share student records with developers seeking to create educational tools for schools. In other words, for Dr. Stevenson, it represented not just a fix to a narrow technical problem, but also a potentially revolutionary way to help educate students. “We are joining the new generation of data management,” Dr. Stevenson said enthusiastically in the March issue of “Chalk Talk,” the school district’s newsletter for parents. She did not imagine that five months later, she would be sitting in a special school board meeting in the district’s headquarters, listening as a series of parents, school board members and privacy lawyers assailed the plan to outsource student data storage to inBloom. What troubled the naysayers at that August session was that the district seemed to be rushing to increase data-sharing before weighing the risks of granting companies access to intimate details about children. They noted that administrators had no policies in place to govern who could see the information, how long it would be kept or whether it would be shared with the colleges to which students applied. “Students are currently subject to more forms of tracking and monitoring than ever before,” Khaliah Barnes, a lawyer at the Electronic Privacy Information Center in Washington who appeared via video conferencing, told the room packed with parents. “While we understand the value of data for promoting and evaluating personalized learning, there are too few safeguards for the amount of data collected and transmitted from schools to private companies.” Jefferson County is not the only place where parents have challenged the adoption of inBloom. Parents in Louisiana raised a ruckus after discovering that their children’s Social Security numbers had been uploaded to inBloom . In April, Louisiana officials said they would remove all student data from the database. Of the nine states that originally signed up this year to participate, just three — Colorado, New York and Illinois — are actively pursuing the service. Still, that accounts for a lot of children. New York State has already uploaded data on 90 percent of 2.7 million public school and charter students — data stripped of identifiers like students’ names — into inBloom; state education officials plan to upload a complete set soon, including names. But New York parents have no say in the matter, said Leonie Haimson, the executive director of Class Size Matters , a nonprofit group that has been the leading challenger of inBloom. Image Credit Minh Uong/The New York Times “We are officially the worst state in the country when it comes to student privacy,” she said, speaking of New York. Educators are naturally excited about the potential for new tools to improve learning. But the Jeffco controversy is a reminder that it can be easy to leap at new and unproven technologies before considering potential risks. EDUCATION technology software for prekindergarten to 12th grade is an $8 billion market, according to estimates from the Software and Information Industry Association. One major reason is the Common Core State Standards Initiative , a program to standardize English and math curriculums nationally. To prepare for assessment tests for those standards, many districts across the country are investing in software to analyze individual student performance in more detail. Services like inBloom want to speed the introduction and lower the cost of these assessment tools by standardizing data storage and security. The idea is that inBloom’s open-source code could spur developers to create apps for all its clients, reducing the need for them to customize software to each school district. In theory, that would make the products cheaper for schools. Recent changes in the regulation of a federal education privacy law have also helped the industry. That law, the Family Educational Rights and Privacy Act , required schools to obtain parental permission before sharing information in their children’s educational records. The updated rules permit schools to share student data, without notifying parents, with companies to which they have outsourced core functions like scheduling or data management. InBloom made its debut in February by announcing that nine states, representing more than 11 million students, had agreed to help develop or test the technology. A month later, Bill Gates introduced it as a “new, exciting thing” in his keynote speech at SXSWedu education conference in Austin, Tex. InBloom offers its clients a vision of continuously quantified students and seamlessly connected teachers. A video on its Web site presents a model of what this techno-utopia might look like. In one scene, a teacher with a tablet computer crouches next to a second-grader evaluating how many words per minute he can read: 55 words read; 43 correctly. Later, she moves to a student named Tyler and selects an e-book “for at-risk students” for his further reading. The video follows Tyler home, where his mother logs into a parent portal for an update on his school status: attendance, 86 percent; performance, 72 percent. She taps a button and sends the e-book to play on the family TV. InBloom doesn’t actually provide any of the user-end software — the student assessment dashboard, the reading analytics app, the parent portal — shown in the video. Executives at the company see their service as the connective tissue between teachers and these technologies, which would be developed by software vendors. In other words, one inBloom goal is to streamline access to students’ data to bolster the market for educational products. “We are not creating commercial apps. Our role is to sit in the middle, to facilitate that innovation,” Iwan Streichenberger, the C.E.O. of inBloom, said in a phone interview. “There are tools that come in, mine and analyze the data and make recommendations.” Yet, for all of inBloom’s neutral-sounding intentions, industry analysts say it has stirred some parents’ fears about the potential for mass-scale surveillance of students. Parents like Rachael Stickland, a mother of two Jeffco students, say that schools are amassing increasing amounts of information about K-12 students with little proof that it will foster their critical thinking or improve their graduation rates. “It’s a new experiment in centralizing massive metadata on children to share with vendors,” she said, “and then the vendors will profit by marketing their learning products, their apps, their curriculum materials, their video games, back to our kids.” Image An inBloom video, above, offers a vision (using fictional students) of new uses for data in education. Credit inBloom InBloom seems designed to nudge schools toward maximal data collection. School administrators can choose to fill in more than 400 data fields. Many are facts that schools already collect and share with various software or service companies: grades, attendance records, academic subjects, course levels, disabilities. Administrators can also upload certain details that students or parents may be comfortable sharing with teachers, but not with unknown technology vendors. InBloom’s data elements, for instance, include family relationships (“foster parent” or “father’s significant other”) and reasons for enrollment changes (“withdrawn due to illness” or “leaving school as a victim of a serious violent incident”). Ms. Barnes, the privacy lawyer, said she was particularly troubled by the disciplinary details that could be uploaded to inBloom because its system included subjective designations like “perpetrator,” “victim” and “principal watch list.” Students, she said, may grow out of some behaviors or not want them shared with third parties. She also warned educators to be wary of using subjective data points to stratify or channel children. One scene in the inBloom video, for instance, shows a geometry teacher virtually reassigning students’ seating assignments based on their “character strengths” — helpfully coded as green, yellow and red. On his tablet, the teacher moves a green-coded female student (“actively participates: 98 percent”) next to a red-and-yellow coded boy (“shows enthusiasm: 67 percent”). Executives at inBloom say their service has been unfairly maligned. It is entirely up to school districts or states to decide which details about students to store in the system and with whom to share them, Sharren Bates, inBloom’s chief product officer, said. She said the company does not look at, use, analyze, mine or sell the student data it stores. Ms. Bates, who had flown in from Los Angeles to address the special August session of the Jeffco school board, assured it: “All of the decisions about what data is stored and what applications are approved and what users can see that data in those applications are all a local customer decision.” MS. STICKLAND, the Jeffco parent, learned about her school district’s partnership with inBloom earlier this year, while perusing an education blog. She was already attuned to data privacy and security issues because she works at a nonprofit energy organization that pays for the electricity and gas of facilities like shelters for battered women. Ms. Stickland’s job requires her to comply with strict rules that limit access to data, like addresses and phone numbers, which could make her clients vulnerable to intruders. Reading about inBloom, she wondered whether Jeffco officials had investigated the ramifications of storing and sharing student data with education technology vendors. She also worried that district officials might be unable to evaluate inBloom objectively, given its backing by the Gates Foundation, a major donor to public schools whose grant money Jeffco was hoping to attract. She quickly sought a meeting with Dr. Stevenson, the superintendent. “I think they were star-struck and didn’t do their due diligence,” Ms. Stickland said. In July, the Gates Foundation awarded Jeffco a $5.2 million grant for teacher development. Lynn Setzer, a school district spokeswoman, said administrators had been completely objective in their evaluation of inBloom. For believers in data-driven education, the idea of collating data from a student’s record has the same logic as electronic health records. Image At the SXSWedu conference in Austin, Tex., this year, Iwan Streichenberger, left, the chief executive of inBloom, appeared with Bill Gates, whose foundation provided seed money for the company. Credit Amy E. Price/Inbloom, via Pr Newswire “Do you want to take your child to the doctor and have three data points — height, weight and age — or do you also want data from a hospital in another state?” asked Bob Wise, a former governor of West Virginia who is an inBloom director. “I want the most data points available so my child can have the best diagnosis.” Consolidating and analyzing data that the district already collects just makes common sense to some educators. David Millard, a Jeffco fifth-grade teacher, goes so far as to extract data by hand from different databases and create his own spreadsheets so he can get a more comprehensive view of his students’ progress. He thinks that parents should have access to this data about their children’s progress, too. “We are in critical need of a system that ties together the data that we have,” Mr. Millard said during the school board meeting. Dr. Stevenson envisions inBloom as a vital part of doing just that. The district plans to invest up to $2 million in a student assessment dashboard being built by LoudCloud Systems , a software developer in Dallas, and she wants inBloom to supply data to that dashboard. “Think of how useful your car dashboard is,” Dr. Stevenson said in a recent interview. “You know if you are going too fast, you know if you are going too slow, you know if your tires are low.” But inBloom isn’t actually necessary for the dashboard to work, said Manoj Kutty, chief executive of LoudCloud. His company’s system could pull student information directly from the local data storage system that Jeffco already has. “We might be perfectly fine working with these school districts directly,” he said. “FIFTY percent of this project has good intentions,” Paula Noonan, a Jeffco school board member , said of the inBloom plan. “The other 50 percent is totally full of risk that hasn’t been examined and weighed.” Concerns about privacy and liability have forced the district to slow down and really think about the use of inBloom. Jeffco’s current service agreement says the data repository doesn’t guarantee that its electronic files on students are not susceptible to intrusion or attack. Other districts in Colorado, and in other states, are closely watching Jeffco as they consider participating themselves. Dr. Stevenson, who was initially reluctant to allow parents to opt out of inBloom, fearing it would be too expensive and technologically cumbersome, recently notified them that they would have that option. On the advice of privacy advocates and parents, she has also revised her original plan to upload student disciplinary data to inBloom. “We are really looking at the classroom data that is fundamental to academic progress,” she said. “We can do that without disciplinary data.” The district expects to decide by January on whether to test the data repository next fall. Dr. Stevenson acknowledges that the district must develop policies to specify which data elements to upload to inBloom and the conditions under which they could be shared with vendors. The district has set up a data management advisory council, which includes some parents who work in data security and compliance. To everyone’s frustration, there are no accepted national guidelines to follow because, until now, K-12 school districts have largely managed their own data storage. “There aren’t a lot of organizations that have all of the policies in place,” Dr. Stevenson said. That means each inBloom client must develop its own policies. In New York State, for example, Thomas L. Rogers, superintendent of Nassau County schools, suggested at a recent public hearing that the state form an oversight board to manage inBloom’s practices. “My concern is that the monopoly inBloom creates sits outside the oversight of a publicly elected body,” he said. Ms. Bates of inBloom said it was important for school districts to define their own legitimate uses for their students’ data and to develop policies to manage them. “We don’t have all the answers, ” she said. Educators, in other words, are on their own.

inBloom
Bill and Melinda Gates Foundation
Privacy
Iwan Streichenberger
Computer data storage
K-12 Education


Jim Webb on the Issues

Abstract: Jim Webb , a Virginia Democrat who was elected to the Senate in 2006 and served a single term, announced on Thursday that he is running for president. Mr. Webb, a Vietnam veteran and former Navy secretary under President Ronald Reagan, has policy positions do not fall neatly along party lines. Here is where he stands on the issues. Foreign Policy Mr. Webb has been a persistent critic of the Iraq war, warning in 2002 that “those who are pushing for a unilateral war in Iraq know full well that there is no exit strategy if we invade.” He has also been more critical than the rest of the Democratic field of President Obama’s efforts to reach a deal with Iran to curtail its nuclear program, saying, “The end result of this could well be our acquiescence in allowing Iran to develop a nuclear weapon.” But he has praised Mr. Obama’s approach of using sanctions against Russia for its support of the rebels in Ukraine. And he said Mr. Obama made “the right decision” in recently moving to normalize relations with Cuba. Same-Sex Marriage Mr. Webb once opposed same-sex marriage, but he says his views have evolved and he now supports it, calling it “a good thing for this country.” Environment Mr. Webb has drawn criticism from Democrats for some of his past positions on the environment. In 2011, he voted in favor of a measure to halt the Environmental Protection Agency’s ability to regulate greenhouse gases. He has also expressed support for the Keystone XL pipeline to take oil from the oil sands of Alberta to the United States, and he has called on President Obama to allow for oil and natural gas exploration off the coastline of Virginia. Immigration Mr. Webb has advocated a piecemeal approach to an overhaul of the immigration system, sometimes putting him at odds with the Democratic mainstream. He voted against a comprehensive immigration package in 2007 but has offered support for the Dream Act, which would have extended citizenship to undocumented immigrants who attend college or serve in the military. He defended Mr. Obama’s legal authority to delay the deportation of five million illegal immigrants. Mr. Webb has given hints recently that he may be moving toward supporting a more comprehensive approach . Lawmakers, he said, need to be exploring “not simply things like putting up a fence, but really what should our policies be,” including foreign policy measures aimed at addressing the factors motivating immigrants to leave their homelands. The Economy Like his rivals for the Democratic nomination, Mr. Webb has put economic inequality at the center of his campaign. The “so-called ‘recovery,’ ” he wrote in his campaign announcement , has chiefly benefited elites. Mr. Webb, who voted in favor of the 2009 stimulus bill, is advocating for greater federal investment in infrastructure and adult education to kick-start the economy. He has also suggested he would work to simplify the tax code, reducing the corporate tax rate to promote domestic job growth but closing “loopholes” exploited by business and the rich. In the Senate, Mr. Webb supported raising capital gains taxes and taxing bonuses paid to Wall Street executives whose banks or financial services firms had received government bailout money.

Democrats
2016 Presidential Election
James H Webb Jr


Ratings Systems Cause Debate in Children’s Chess

Abstract: When Michael Koufakis sat down to play Timmy Wang, another third grader, in the fifth round of the Elementary National Championship in Atlanta in early May, Timmy startled Michael by asking, “What’s your real rating?” Michael was confused. They were in a section of the event reserved for unrated novices, those who had never played in tournaments run by the United States Chess Federation , the game’s governing body. “I don’t know,” Michael said. Timmy volunteered, “Mine’s one thousand four hundred” — the level of an adult club player. Michael said he was shocked. “I tried to play real hard,” he said, “but I think he knew my opening.” Michael lost — his only loss of the tournament. Parents whose children play in national championships are calling this an unfair practice: unranked novices in federation events facing players like Timmy, who have been rated by state organizations. To the thousands of young players, their parents and the groups that govern chess, such players could be called ringers, the equivalent of the over-age pitcher in a Little League game. But unlike baseball, where the tip-off to an older player is his size or athletic prowess, it is impossible to tell the best chess players simply by looking at them. Ratings, a measure of performance and skill (the higher the rating, the better the player), are the only clue. In the unrated section in Atlanta, Timmy, a student at Stevenson Elementary, a public school and scholastic chess powerhouse in Bellevue, Wash., was not the only one from his school who was rated by Washington. So were his three teammates. Stevenson tied for first place with Public School 166 in Manhattan, Michael’s school, but Stevenson finished first on tie-breaks. Carlos Mercado, a parent at P.S. 166, said that some of the school’s children were very upset after losing to the children from Stevenson. “They came away feeling that this tournament wasn’t really fair for them,” Mr. Mercado said. “It is not the kind of lesson that I would expect them to learn about life from a game that is supposed to be fair.” Parents were also upset because Stevenson had children with very high state ratings playing in federation sections with rating caps. They won those sections, too. Did the Stevenson players cheat? Not by the federation’s current standards. The dual ratings have led to discussions in the federation about how to change the rating requirements for the championships. Among the proposals are to eliminate unrated sections and to require that children play a minimum number of federation-rated tournaments before the nationals so that uniform ratings can be established. The problem has festered for years because the federation does not want to recognize systems like Washington State’s that compete with its own. People can get federation ratings only by joining it and playing in its tournaments, as Stevenson has done. But in the end, the problem that the federation faces is that it risks alienating children from other states, costing it memberships. Scholastic chess is the lifeblood of the federation. Bill Hall, the federation’s executive director, said that more than half of its revenue was from memberships and that last year, for the first time, more than half of those fees came from younger members. Up to now, the state ratings systems have allowed children in those states to play in local tournaments, gaining practical experience, and then compete in national championships with far-lower federation ratings. Having a high rating is a source of bragging rights, but keeping ratings low has benefits. Beatriz Marinello, a member of the Scholastic Council, the United States Chess Federation ’s rule-making body for scholastic chess, compared the practice to one in which adult players lose ratings points before big tournaments to compete in easier sections with large cash prizes. “It is a version of sandbagging,” Ms. Marinello said. “In this case, they underrepresent their ratings to win trophies.” Stevenson has become particularly adept at winning the kindergarten-through-fifth-grade under 900 section, taking the title in 2008, 2009 and 2010, and always by wide margins. Its students are also successful in sections with no rating caps. This year, its team finished second in the kindergarten-through-fifth-grade uncapped championship section. Two years ago, Michael Neitman, a co-chairman of the Scholastic Council, said that he was aware of the problem but that no one had complained about the dual ratings issue. “We are not about to open up cans of worms,” he said. Problems arose, however, in early May at the elementary school championships in Atlanta. Elliott Neff, Stevenson’s coach, said his team was not trying to manipulate the system. He said that the Washington rating system was free and that many parents did not want to pay the federation’s annual membership fee of about $15 when they were unsure whether their children would continue to compete. For many Stevenson children, Mr. Neff said, the tournament in Atlanta was their first national event, which is why they chose to play in the lower-rated sections if they qualified. “They are young kids,” he said. “They want to play in the best section they can and score well.” The question of whether it would be fair for them to play in the lower sections “never came up,” he said. Mr. Neff said he was puzzled about what had happened between Timmy and Michael. “We coach our team not to ask about ratings and not to think or talk about ratings,” he said. “That obviously was not a good situation.”

Chess
United States Chess Federation
Ratings and Rating Systems


The World Wide Web, the New Frontier in Fraud

Abstract: Welcome to the latest frontier in white-collar crime, where just finding the criminals is often the greatest challenge. Charges filed last week in Federal District Court in Manhattan in two seemingly unrelated cases give a small peek into the dark world of online crime, in which client information is swapped and the proceeds are sent over networks using new digital currency. As The New York Times reported , what may tie the cases together is a suspected link to the hacking of JPMorgan Chase’s network in 2014. In that incident, contact information for 83 million customer and small-business accounts was obtained , although the bank says that no financial information such as account numbers was taken. The security breach appears to have some connection to hackers operating in Russia. That makes it more challenging to find the perpetrators because of that nation’s continuing political tensions with the United States. Who was behind the breach, and how the information might have been used, remains shrouded in mystery at this point. The charges filed last week in the two cases make no mention of hacking into JPMorgan’s network, and it is unclear whether any of the bank’s client contact information was used or sold. But there are hints at how defendants in one case might have used the information from the breach. The Justice Department charged three men with securities fraud, identity theft and money-laundering conspiracy related to manipulation of penny stocks in 2011 and 2012, in what are known as pump-and-dump schemes. Two of the defendants, Gery Shalon and Ziv Orenstein, are Israeli citizens. They were arrested there last week and are being held. The third defendant, Joshua Samuel Aaron, is an American citizen living in Israel who is thought to have been in Russia recently, but he has not yet been arrested. The indictment is a bare-bones set of allegations that gives few details about how the shares were manipulated. A statement by Preet Bharara, the United States attorney in Manhattan, asserts that the defendants funneled “millions of dollars in unlawful proceeds through a web of international shell companies.” But the indictment itself has nothing about how much money they made from the scheme or the amount of losses that investors suffered. The money-laundering conspiracy references transactions totaling about $1 million, but little else about any connection to the penny-stock fraud. The government’s filing is clearly a placeholder intended to allow the Justice Department to request the arrest of the three defendants by Israeli authorities and begin the extradition process. We can expect more details as the government supplies evidence to have Mr. Shalon and Mr. Orenstein sent to the United States, but those proceedings can be slow if the defendants fight extradition. It may seem far-fetched that the JPMorgan breach figures into a penny-stock fraud. But a pump-and-dump scheme is built on the axiom attributed to P.T. Barnum that “there’s a sucker born every minute.” To make such a fraud work requires finding enough gullible investors to buy shares in thinly traded companies so that those who control the shares can sell their positions. The indictment accuses the three defendants of sending out spam email that promoted the shares of various companies to generate buying interest. Because penny stocks are not followed by the major brokerage firms, it is easy to drive up the price through sham trading and false rumors and make the so-called suckers think that the price is escalating because of corporate developments. A price rise of just 50 cents from the pump can generate enormous profits when millions of shares are quickly dumped. The lifeblood of this type of fraud is a fresh supply of potential customers, so gaining access to the JPMorgan customer contact information could be quite valuable. Prosecutors have not yet shown such a link between the security breach and the defendants. But it is a tantalizing possibility that customer information was used for something as prosaic as an old-fashioned penny-stock fraud. The links between the pump-and-dump scheme and the JPMorgan attack grow with the second case filed last week in Manhattan against Anthony R. Murgio and Yuri Lebedev. That complaint accuses them of operating an illegal money-transfer firm called Coin.mx that converted Bitcoin, the digital currency, into cash for criminals. The Times described on Sunday how Bitcoin had become “a new preferred method for hostage takers” who seize computers and websites and then demand ransom payments in the form of the digital currency. A memorandum from the Federal Bureau of Investigation written last year identified Mr. Murgio as having some link to the JPMorgan breach, although the details remain sketchy. In an interesting twist, Mr. Murgio and Mr. Lebedev attended Florida State University with Mr. Aaron, the missing defendant in the penny-stock case who was last thought to be in Russia. The penny-stock defendants are accused of using accounts for Cyprus-based shell companies to launder the profits from the stock sales. The complaint against the Bitcoin exchange defendants describes using accounts in Cyprus, Hong Kong and Eastern Europe for their transactions. Mr. Murgio is also accused of taking control of a credit union in New Jersey to process transactions, showing the vulnerability of domestic financial institutions to misuse. This all may be just a grand coincidence, but it shows the web of connections in the world of online crime and the challenges that investigators face when they try to build cases. Digital currency can disappear in the blink of an eye and bounce through numerous accounts in places where there is little transparency. Penny-stock frauds can be conducted anywhere in the world as long as there is access to servers and email. We have become accustomed to hearing about computer network attacks and identity theft involving a number of different companies. And the controversy about Bitcoin being involved for illegal transactions is nothing new. Yet, unlike other types of white-collar crime such as insider trading, prosecutors are struggling to even identify suspects behind these attacks, let alone preventing them from being so profitable. In the Old West, it was a matter of chasing down train robbers like Butch Cassidy and the Sundance Kid. Today, it requires penetrating the layers of secrecy provided by the Internet and countries that encourage bank secrecy. It is easy to see that a crime has taken place, but getting the robbers is more difficult than ever.

JPMorgan Chase
Justice Department
Securities fraud
Gery Shalon
Ziv Orenstein
Joshua Samuel Aaron
Yuri Lebedev
Bitcoin
Hacker (computer security)
Anthony Murgio