Banco Santander SA sold Bernard Madoff investments to a teacher and a street vendor, not just to wealthy private banking clients in Spain

Banco Santander SA sold Bernard Madoff investments to a teacher and a street vendor, not just to wealthy private banking clients in Spain and Latin America.Branch managers channeled customers with money from property sales or inheritances to private banking salespeople, lawyers for the investors said. A retired school teacher put 300,000 euros ($388,000), half her savings, in a structured product linked to Madoff, said Jordi Ruiz de Villa, an attorney at the Barcelona law firm Jausas. The vendor invested 325,000 euros of lottery winnings in a similar product and may have to return to street sales, according to lawyers at Cremades & Calvo-Sotelo in Madrid.“The fact that someone has a sum of money in the bank doesn’t make him a suitable customer for this type of product,” said Ruiz de Villa, who’s representing about 30 account-holders with potential claims of 10 million euros, including the teacher. “Some retail clients have suffered true personal catastrophes because of this.” He wouldn’t provide the teacher’s name.Santander, Spain’s biggest lender, may lose customers at the domestic branch network that accounts for a third of profit if it is found to have misled people who trusted their neighborhood bankers, said Peter Hahn, a fellow at Cass Business School in London. The bank, led by Chairman Emilio Botin, has said clients have 2.33 billion euros invested with Madoff, including 320 million euros from private banking customers in Spain.
“The model in Spain where customers just left it to Big Daddy Botin to take care of things has been broken,” said Fernando Zunzunegui, a Madrid-based lawyer. He said he is taking on Madoff-related claims valued at 8.2 million euros from 20 clients who are “clearly retail.” He declined to provide detailed information about his firm’s clients.Ruiz de Villa and Zunzunegui said they are signing up clients and reviewing the cases in preparation for filing possible lawsuits against Santander. Javier Cremades, chairman of Cremades & Calvo-Sotelo, said he’ll push for a settlement first.New York-based Bernard L. Madoff Investment Securities LLC collapsed last month after Madoff told his sons it was a $50 billion Ponzi scheme, according to a complaint filed by the U.S. Federal Bureau of Investigation. Worldwide, the victims include banks, charities and investors such as Madrid-based billionaire Alicia Koplowitz and film director Steven Spielberg.

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Joseph Bruno,faces a maximum of 20 years in prison and $250,000 in fines on each of the counts.

Joseph Bruno, one of the state's three most powerful officials for more than a dozen years, was indicted yesterday for allegedly taking $3 million in bogus consulting fees and other scams - including selling a "worthless" racehorse for $80,000 to a fat-cat friend. The upstate Republican's schemes to use his public position to enrich himself began even before he landed the Senate's top post on Thanksgiving Day 1994, and they eventually involved 16 labor unions and more than a dozen companies, the eight-count indictment alleged. The 79-year-old former boxer - who quit the Senate last year as the probe was drawing to a close - pleaded not guilty and declared he was the victim of a "politicized" probe and a "fishing expedition that smells really, really bad."
His indictment had been expected for months. It capped a three-year investigation that began with an FBI probe of flights Bruno took on private jets to Florida vacation spots and a Kentucky horse farm thanks to businessmen. The probe mushroomed into wide-ranging inquiry into Bruno's network of wealthy friends, business contacts and a suspicious consulting firm he ran out of his home. According to the 35-page indictment handed up in Albany, Bruno signed an agreement in March 1994 to steer business to Wright Investors' Service, a Milford, Conn.-based adviser to trade unions. The agreement allegedly said Wright would pay Bruno a fee for each union he got to hire the firm. Bruno contacted 16 union benefit funds, the indictment said. Eleven unions, ranging from Teamsters to corrections officers, agreed to let Wright manage their assets, according to the indictment. In return, Wright allegedly paid Bruno more than $1.3 million over 12 years.
But he allegedly concealed the money in a bogus consulting firm, Business Consultants Inc., and by getting Wright's parent company to hire him as a consultant. Bruno was also paid $632,000 over 11 years by an Albany banking and brokerage firm, McGinn, Smith & Co., which received fees for handling trades of union assets. He allegedly misled the firm by saying he cleared the work with the Legislative Ethics Committee. Bruno created Capital Business Consultants LLC to receive those fees, even though it "did not perform any function," the indictment said. In fact, Bruno never did any "legitimate work," it said. Bruno also received more than $1 million in gifts from three pals doing business with the state, the indictment said. He again hid the money as consulting fees and, in one 2005 case, sold a "virtually worthless" horse from his Mountain View Farm outside Troy to Albany-area millionaire Jared Abbruzzese. None of the companies, unions or other individuals cited in the indictment was accused of wrongdoing. "If Mr. Bruno engaged in illegal activities, Wright was not aware of them," the firm said. Bruno faces a maximum of 20 years in prison and $250,000 in fines on each of the counts.

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lawyer says the two sons of disgraced U.S. financial investor Bernard Madoff had no knowledge of their father's allegedly fraudulent dealings.

lawyer says the two sons of disgraced U.S. financial investor Bernard Madoff had no knowledge of their father's allegedly fraudulent dealings.Attorney Martin Flumenbaum, who is representing Mark and Andrew Madoff, said the brothers only learned about their father's alleged actions a day before the former Nasdaq stock exchange chairman was arrested in December, The Wall Street Journal reported Saturday.Flumenbaum said Mark, 44, and Andrew, 42, told authorities of their father's allegedly illegal activities.Both siblings work at the brokerage arm of Bernard L. Madoff Investment Securities LLC. Despite that fact, Flumenbaum said the brothers had no access to overall financial information about their father's firm.The Journal said the elder Madoff, 70, who founded the firm in 1960, is being investigated by federal criminal prosecutors and the Securities and Exchange Commission for allegedly creating a fraudulent investment operation.

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Royal Bank of Scotland investigated by the Serious Fraud Office to find out whether shareholders were misled over last year's £12bn rights issue

Royal Bank of Scotland investigated by the Serious Fraud Office to find out whether shareholders were misled over last year's £12bn rights issue, according to a senior Scottish politician.Tavish Scott, the Liberal Democrat leader, said taxpayers had the right to know whether RBS chiefs had fully disclosed the dire nature of the bank's financial position when shareholders pumped in billions of pounds of new capital last April in an attempt to keep the bank afloat.Scott made the call at the end of a disastrous week which saw the once-proud institution brought to the brink of nationalisation and record a £28bn loss, the largest in British corporate history.
Scott said: "There has to be an investigation. I think the banks across the UK must have known what their financial position was much earlier than they were letting on and that particularly applies to RBS. "At the time they were asking investors for more money to help their financial position was RBS giving a full picture of how strong or weak they were as a financial institution? I genuinely don't know, but I reckon the Serious Fraud Office should have a look at it."He added: "It is a question of whether investors were being misled and whether that constitutes fraud – that's a matter for experts."The biggest rights issue in UK history caused huge controversy as it came less than two months after the then RBS chief executive, Sir Fred Goodwin, had declared the bank's financial position was satisfactory.
The measure failed to resuscitate the bank and since then, as the global financial position deteriorated, the Treasury has bought a 58% stake in the bank in exchange for £20bn to keep it afloat. That stake has now increased to 70%.The plunging value of RBS also contributed to the extra £350bn rescue package unveiled for the banking sector by the Government last week, on top of the £500bn deal unveiled last October.
Two years ago, RBS was worth an estimated £75bn, but is now valued at just £4.5bn.
Scott said his party was considering making a complaint to the SFO, the independent UK Government department which investigates allegations of financial irregularity.
Although the SFO does not have jurisdiction in Scotland, Scott argued that the rights issue would have seen RBS chiefs receiving information and advice from advisers and employees based in London. The SFO said it had yet to look at the issue. A Royal Bank of Scotland spokesman refused to comment directly on Scott's comments.The spokesman referred to the speech made by Sir Tom McKillop, the outgoing RBS chairman, last November, when he said he was "profoundly sorry" for the bank's financial difficulties.Meanwhile, John Swinney, the SNP Finance Secretary, insisted that RBS could remain profitable despite fears that it would be fully nationalised.
Swinney said the long term future of the bank had to be in the private sector, adding that it retained "strong businesses" in retail, banking and insurance.The bank's downfall originated, he said, with the "mistake" of taking over the Dutch bank, ABM Amro, for £61bn. Swinney said Goodwin had to hold responsibility for those mistakes.

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Two partners of Price Waterhouse have been arrested

Two partners of Price Waterhouse, the firm that audited fraud-hit Satyam Computer Services’ books, have been arrested, police said Saturday.The Crime Investigation Department (CID) of the Andhra Pradesh police, probing the Rs.70 billion (Rs.7,000 crore/$1.43 billion) fraud in the IT bellwether, arrested chief relationship partner S. Gopalakrishnan and engagement leader Srinivas Taluri Friday night. Price Waterhouse is the Indian arm of PricewaterhouseCoopers (PwC), the global auditing firm.CID announced the arrests Saturday evening. ‘We have arrested the two partners of the Price Waterhouse last night,’ a top CID official told IANS here.They have been charged under section 120 B (criminal conspiracy) of the Indian Penal Code (IPC) and were being produced before the magistrate at his house, he said.‘This is a case of criminal conspiracy and falsification of accounts. As per the evidence available they are found to be responsible for preparation of misleading accounts and furthering the conspiracy,’ said the official, who did not want to be named.These were the first arrests of auditors since Satyam founder B. Ramalinga Raju quit as chairman Jan 7 while admitting the fraud.The CID had on Jan 13 conducted searched at the Hyderabad office of Price Waterhouse and seized several documents and records relating to Satyam accounts. Ramalinga Raju, his brother and former managing director of Satyam B. Rama Raju and former chief financial officer Vadlamani Srinivas have been arrested and lodged in Chanchalguda central jail here

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Contractor, Maurice Subilia, 64, of Kennebunk, is scheduled to appear at a Feb. 2 hearing in Federal District Court

Contractor, Maurice Subilia, 64, of Kennebunk, is scheduled to appear at a Feb. 2 hearing in Federal District Court, according to the newspaper, The Portland Press Herald. The agreement to plead guilty was spelled out in a court document, the newspaper reported.Mr. Subilia’s lawyer, Toby Dilworth, declined to comment.Mr. Subilia, former president of Fiber Materials Inc. in Biddeford, is accused of orchestrating a conspiracy that involved two officials at the Army Space and Missile Defense Command in Huntsville, Ala. He faces up to 20 years in prison.Prosecutors say Mr. Subilia and the officials, Michael Cantrell and Douglas Ennis, agreed to split and personally use money earmarked for missile defense contracts. Mr. Cantrell and Mr. Ennis have pleaded guilty and are awaiting sentencing in Alabama.According to court documents, Mr. Subilia began paying bribes in 2000 to Mr. Cantrell and Mr. Ennis to steer financing to Mr. Subilia’s subcontracting companies, primarily Lealagi Inc.Most of the material delivered by Lealagi was worthless, a fact that Mr. Cantrell and Mr. Ennis covered up while continuing to funnel earmarked money to Mr. Subilia’s sham companies in return for a share of the gains, according to a summary of the offenses filed by federal prosecutors.The conspiracy continued until 2007, and the Army estimates its losses at $2.5 million to $7 million.

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Eduardo A. Masferrer was found guilty Wednesday of masterminding a $20 million bank fraud

Eduardo A. Masferrer was found guilty Wednesday of masterminding a $20 million bank fraud and then weaving a web of lies to conceal it. After only a few hours of deliberation, 12 jurors averted their eyes as they filed into federal court in Miami and then sat stone-faced as the court deputy read 16 guilty counts against Masferrer, the former chairman and CEO of Hamilton Bank.

It was a stunning reversal for Masferrer, who was once the toast of Miami banking and charitable circles. During his first trial, the jury deadlocked, resulting in a mistrial last December. Masferrer faces up to 10 to 12 years under federal sentencing guidelines, plus substantial fines and restitution.

U.S. District Judge K. Michael Moore will sentence him on July 26. Masferrer, a former banker in Panama who moved to Miami and took control of Hamilton Bank in 1989, built it into one of South Florida's top trade finance banks. He was known for his charitable largess as well as the loans the bank gave to many Cuban-American-owned start-up companies and larger businesses whose fortunes were linked to the 1990s trade boom. After the verdicts were read Wednesday, Masferrer stood with his wife, Maura Acosta, and hugged his son Eduardo, who had participated in his defense, as he waited for U.S. marshals to escort him to the Federal Detention Center near the downtown Miami courthouse. His defense attorneys, Howard and Scott Srebnick, said they would appeal and were preparing a new bond motion for Masferrer's release. The three prosecutors, Peter Outerbridge, Benjamin Greenberg and Andrew Levi, all assistant U.S. attorneys, left the courtroom without comment. But Alicia Valle, special counsel to the U.S. attorney, said, "We are satisfied with the jury's decision." As his banking star rose, Masferrer's generosity earned him friends - including Miami Dade College President Eduardo Padrón, who attended the first trial and was present for closing arguments Tuesday. Masferrer endowed a teaching chair at the college and many scholarships and made large contributions to other local institutions. Problems began brewing at the bank after Masferrer began dabbling in high-yield securities in risky developing countries. The case centered on the sale of problematic Russian loans through a swapping process that concealed the bank's financial losses. Meanwhile, Masferrer collected a $1 million bonus and Hamilton continued to deliver glowing profit reports to shareholders. The Office of the Comptroller of the Currency, however, was growing suspicious, and federal agents seized the bank and shut it down in 2002. Its deposits were transferred to other banks, but losses from the debacle totaled $160 million and almost nothing went to shareholders. Masferrer was indicted on fraud and conspiracy charges in 2004 along with former bank President Juan Carlos Bernacé and the former chief financial officer, John M.R. Jacobs. Both Bernacé and Jacobs pleaded guilty to lesser charges and testified against their former boss at both trials. They are awaiting sentencing.

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State prosecutors say James Harrison used the Viola and Oscar Allen Trust as his “own personal piggy bank” for 14 years.

Ukiah banker pleaded not guilty in Mendocino County Superior Court Wednesday morning to embezzling $421,000 from a dead couple’s trust account instead of turning the money over for student scholarships.State prosecutors say James Harrison used the Viola and Oscar Allen Trust as his “own personal piggy bank” for 14 years.He is charged with misappropriation of trust assets and three counts of wilfully filing false tax returns.Harrison is a former vice president of locally owned Savings Bank of Mendocino County. He resigned in 2005 after his employer notified federal banking regulators he may have engaged in “self-dealing” as trustee of the Allen trust.
The Allens were a successful business couple who had no living heirs. They set up their trust in 1993 and appointed Harrison as trustee.They directed that, upon their deaths, the remaining trust be turned over to Ukiah High School for scholarships.
A trial tentatively was set to begin April 6.

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Rod Cameron Stringer misappropriated millions of dollars from investors

Rod Cameron Stringer misappropriated millions of dollars from investors since 2001, the Securities and Exchange Commission said in a federal lawsuit filed in Lubbock, Texas. The resident of Lamesa, 60 miles south of Lubbock, said he generated annual profits as high as 61 percent, according to the suit. “Stringer’s claims regarding the hedge fund and the high rates of return are completely bogus,” the regulator said in the suit. Besides running the fund, the agency said the 43-year-old worked as a bail bondsman, a tow-truck driver and a crop-dusting pilot. Stringer, doing business as RCS Hedge Fund, managed money from 31 investors, many elderly, according to the SEC’s complaint. The location of the remaining investor money “is presently unknown,” the agency said. Some was spent for a pool at his office, a horse-racing partnership, a boat, and mortgages for at least two houses, it said. Stringer and his fund weren’t registered with the SEC and he has never held a securities license, the agency said.

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Auriga International Advisers, a hedge fund registered in the British Virgin Islands, has lost over 400 million Swiss francs ($350 million)

Auriga International Advisers, a hedge fund registered in the British Virgin Islands, has lost over 400 million Swiss francs ($350 million) that were invested with Bernard Madoff, the company's main shareholder said Wednesday.
Jacques Rauber, who is described as the majority shareholder of Auriga International Advisers in a 2007 filing to Britain's business register, confirmed reports in Swiss weekly SonntagsZeitung that the company's Auriga International fund was wholly invested in Fairfield Sentry.That U.S.-based fund, in turn, had invested all its $7.3 billion in assets with Madoff.Madoff has confessed to losing up to $50 billion in a giant Ponzi scheme and is under house arrest."I deeply regret that the investors of Auriga International, to which I too belong, fell victim to this incredible case of fraud," the Zurich-based Rauber was cited as saying in the SonntagsZeitung report Sunday.The paper also quoted him as saying that another fund, Auriga Alternative Strategies, was affected "to a much lesser extent."Rauber confirmed the substance of the report in an E-mail to The Associated Press but declined to elaborate.Information about Auriga's investors was scarce. The company says on its Web site that "clients include both institutional investors and high net worth individuals."Auriga is licensed to provide financial management services by authorities on the British Virgin Islands, a Caribbean tax haven known for its corporate and banking secrecy.

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Charged Arthur G. Nadel,with fraud, saying he misled investors and overstated the value of investments in the six funds by about $300 million.

Federal regulators on Wednesday charged a missing hedge fund manager with fraud, saying he misled investors and overstated the value of investments in the six funds by about $300 million.The Securities and Exchange Commission won a court order freezing the assets of Arthur G. Nadel, of Sarasota, Fla., and other defendants in the case.Nadel owed investors a $50 million payout, told his wife in a note he felt guilty and threatened to kill himself, according to the Sarasota County Sheriff's Office. The authorities believe that Nadel, 76, planned his Jan. 14 disappearance.
In a lawsuit filed in federal court in Tampa, the SEC said Nadel recently transferred at least $1.25 million from two of the funds to secret bank accounts that he controlled.Two investment companies co-owned by Nadel, Scoop Capital and Scoop Management, agreed in a settlement with the SEC to injunctions and an asset freeze. They neither admitted nor denied wrongdoing.According to Scoop Management's internal accountant, there are between 500 and 600 investors nationwide. Last week, many were told that the funds were empty. Sarasota police have been fielding inquiries from around the country and as far away as France.Robert Wilkes, a 76-year-old retiree in Vero Beach, Fla., who worked in commercial banking, said the SEC's charges against Nadel didn't surprise him."He should be charged with fraud," Wilkes told The Associated Press. He wouldn't disclose how much he'd invested with Nadel, but said, "We're going to have to completely revamp our style of living. We're going to have to cut back."The SEC also is seeking unspecified restitution plus interest from several so-called relief defendants: investment advisers Valhalla Management and Viking Management, and hedge funds Scoop Real Estate, Valhalla Investment Partners, Victory IRA Fund, Victory Fund, Viking IRA Fund and Viking Fund.Those defendants consented to an asset freeze, also without admitting or denying the allegations. Nadel provided false and misleading information to those companies to be distributed to investors through account statements and other materials, according to the SEC suit.The agency said Nadel's funds appeared to have assets totaling less than $1 million — while he claimed in sales materials for three of the funds that they had about $342 million in assets as of Nov. 30. The materials also boasted of monthly returns of 11 to 12 percent for several of the funds last year, when they actually had negative results.An investor in one fund received an account statement for November indicating that her investment was worth almost $420,000. In reality, the entire fund had less than $100,000, according to the SEC."Investors should be able to rely on the truthfulness of an account statement and offering materials," David Nelson, director of the SEC's regional office in Miami, said in a statement. "Mr. Nadel's alleged actions deceived investors, and we are seeking to hold him accountable for that misconduct."Wilkes already has his Florida home on the market and now plans to put his second home in Vermont up for sale."It's just been a very traumatic event for us," he said. "Like a bad dream that when you wake up, you find it's not a dream. It's a nightmare." Missing Florida hedge-fund adviser Arthur Nadel was sued by U.S. regulators on claims he defrauded clients while overstating six funds’ investments by $300 million. Nadel, 76, who disappeared Jan. 14, “recently” transferred at least $1.25 million from two funds to a secret bank account he controlled, the Securities and Exchange Commission said in the lawsuit at federal court in Tampa, Florida. The funds’ total assets now are less than $1 million, the agency said. “Mr. Nadel’s alleged actions deceived investors, and we are seeking to hold him accountable for that misconduct,” David Nelson, head of the SEC’s Miami office, said in a statement. The Federal Bureau of Investigation joined local police during the weekend in searching for Nadel, who left his $250,000 four-bedroom Sarasota, Florida, home for work last week and didn’t return. Nadel went missing a month after New York money manager Bernard Madoff allegedly admitted to running a $50 billion Ponzi scheme.
The SEC civil suit also names Nadel’s firms, Scoop Capital LLC and Scoop Management Inc. The agency said it secured an emergency court order freezing the assets and appointing a receiver to recover investor funds. Offering materials for three of Nadel’s hedge funds said they had about $342 million in assets at the end of November, according to the SEC. Documents for several of the funds falsely reported monthly returns of 11 percent from January through November last year, even though at least three funds had losses, the agency said.

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Kosta Kovachev, 57, is charged in a criminal complaint filed in the U.S. District Court for the Southern District of New York

Kosta Kovachev, 57, is charged in a criminal complaint filed in the U.S. District Court for the Southern District of New York with one count of conspiracy to commit wire fraud.The government alleges in a separate criminal complaint that Dreier sold as much as $380 million in fake promissory notes from 2006 to 2008 to three hedge funds in the name of a New York real estate development company.The developer later told the government it was in the dark about the sales and that the notes were bogus. The names of the hedge funds and developer were not disclosed in the criminal complaints.

Dreier LLP, a well-known law firm founded by Marc Dreier, has since collapsed. The firm had 250 attorneys in New York, Connecticut, Pennsylvania and California.

Last fall, one of the hedge funds became concerned when $115 million worth of promissory notes it purchased had not been repaid in a "timely manner," according to the complaint filed in Kovachev's case.The fund demanded a meeting with the developer to discuss repayment. According to court papers, Dreier had access to the developer's Manhattan offices because of prior business dealings with the company. He then set up a meeting there Oct. 15 without the developer's authorization.
At the meeting Kovachev allegedly pretended to be the developer's controller and helped pull off the ruse by answering financial questions posed by the hedge fund's employees.Federal prosecutors said Kovachev is a former registered stockbroker with no employment connection to the developer.The complaint further alleges that earlier the same month Kovachev helped Dreier sell more of the developer's fake promissory notes for $13.5 million to another hedge fund.Kovachev also is charged with posing as the developer's CEO during a telephone conference with a third hedge fund in which he helped seal a $100 million promissory note deal last November. Federal prosecutors said Kovachev faces a maximum of five years in prison and a minimum $250,000 fine. The fine could be much larger - up to twice the gross gain or loss from the scheme, they said.Dreier could get up to 40 years in prison for masterminding the scheme, along with millions of dollars in fines, prosecutors said.
The New York Times reported Jan. 18 that Dreier is incarcerated in a Lower Manhattan federal jail awaiting trial. The government has seized his homes in Manhattan and the Hamptons, a third home in the Caribbean, an art collection, a 121-foot yacht, and four cars, according to the report.

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Maytas Infra Ltd (MAIL.BO) denied on Tuesday it had received funds from fraud-hit Indian outsourcer Satyam Computer Services Ltd (SATY.BO)

Maytas Infra Ltd (MAIL.BO) denied on Tuesday it had received funds from fraud-hit Indian outsourcer Satyam Computer Services Ltd (SATY.BO), a day after India extended its probe to the linked construction firm.On Monday, the Indian government said the probe into Satyam, which is at the centre of India's biggest corporate scandal, had been widened to include Maytas Properties and Maytas Infra, two companies in which Satyam founders hold stakes. "Maytas Infra categorically states that there has been no receipt or utilisation of any funds belonging to Satyam, by diversion or otherwise," the company said in a statement issued late on Tuesday."We strongly refute this incorrect allegation against the company," it said, adding Maytas Infra was cooperating with the investigation.Satyam tried to take over the two Maytas companies in mid-December in a $1.6 billion deal, before hastily backing down in the face of a shareholder revolt.Maytas is Satyam spelt backwards.

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Rajesh Kumar, a 35-year-old Fiji native, was arrested Sunday in Sacramento on a $250,000 warrant alleging fraud.

Rajesh Kumar, a 35-year-old Fiji native, was arrested Sunday in Sacramento on a $250,000 warrant alleging fraud. Kumar is accused of defrauding a woman who took cover and survived the Dec. 27, 2007, shootings that killed Ravinder Kalsi and his brother, Paramjit Kalsi.Police have said they do not believe Kumar was the shooter in that case and declined to give details of the alleged fraud.The brothers were closing up Sahib Indian Restaurant at 12221 San Pablo Ave. at about 9 p.m. when two people approached the door. As Ravinder, 30, let them in, he was shot. The two assailants then chased Paramjit, 42, to the kitchen, shooting him numerous times.
The seemingly random killings of the two well-liked brothers shocked the East Bay Sikh community and baffled police at the time.Investigators later determined that a woman who was also in the restaurant took cover during the shooting and was not hit. Kumar allegedly defrauded the woman, police said. The Kalsis had bought the restaurant five years earlier. The brothers immigrated to the United States in 1997 from the town of Patijla, about 150 miles north of New Delhi. Carpenters in India, they did construction work in Berkeley for several years until they saved enough to buy a house. They bought, renovated and sold or leased several houses over the years, eventually earning enough to open their restaurant and send money home to India.One of the brothers was engaged to a woman in India, and the brothers planned to sell the restaurant and return home for the wedding at the end of the month.

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Three suspects in a $200,000 fraud and extortion investigation were taken into custody

Three suspects in a $200,000 fraud and extortion investigation were taken into custody Thursday in Thurston County. They were booked into the Thurston County Jail on charges of residential burglary and attempted first-degree theft.
The Thurston County Sheriff's Office has been investigating the case since spring of 2008, when the suspects allegedly tried to sell a replacement mobile home to a victim. The suspects allegedly told the victim his home needed to be demolished, and they would help replace it. Detectives say the suspects kept asking for money in amounts ranging from $15,000 to nearly $40,000, but they never produced the home. They told the victim if he didn't pay he would be evicted.
The suspects were taken into custody last week, when they again contacted the 78-year-old victim, forced his way into his home on Loganberry Street and attempted to get more money. They are being held without bail.

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Heartland Payment Systems, the sixth-largest payments processor in the U.S., announced today that its processing systems were breached

Heartland Payment Systems, the sixth-largest payments processor in the U.S., announced today that its processing systems were breached in 2008, exposing an undetermined number of consumers to potential fraud. While the company continues to assess the damages inflicted by the attack, Robert Baldwin, the company's president and CFO, says law enforcement has already noted that the attack against his company is part of a wider cyber fraud operation.

"The indication that it is tied to wider cyber fraud operation comes directly from conversations with the Department of Justice and the U.S. Secret Service," Baldwin says. The company says it believes the breach has been contained.

Heartland, headquartered in Princeton, NJ, handles approximately 100 million transactions per month, although the number of unique cardholders is much lower. "It is still a question as to the percentage of the data flow they were able to get," Baldwin says, adding he would not speculate on the number of cards potentially exposed. Specifics surrounding when the breach occurred are still being analyzed. But Baldwin says two forensic auditing teams have been working on the breach analysis and investigation since late 2008, after Heartland received the notification from Visa and MasterCard. The investigation began immediately after the credit card companies told Heartland they saw suspicious activity surrounding processed card transactions. Described by Baldwin as "quite a sophisticated attack," he says it has been challenging to discover exactly how it happened. The forensic teams found that hackers "were grabbing numbers with sniffer malware as it went over our processing platform," Baldwin says. "Unfortunately, we are confident that card holder names and numbers were exposed." Data, including card transactions sent over Heartland's internal processing platform, is sent unencrypted, he explains, "As the transaction is being processed, it has to be in unencrypted form to get the authorization request out." No merchant data or cardholder Social Security numbers, unencrypted personal identification numbers (PIN), addresses or telephone numbers were involved in the breach. Nor were any of Heartland's check management systems. The company delivers credit/debit/prepaid card processing, payroll, check management and payments solutions to more than 250,000 business locations nationwide Baldwin says the company moved quickly to announce the breach. "It is important to get it out, but leaves us with incomplete information for our customers until the investigation is complete," he says. For more information on the breach, the company has set up a website: www.2008breach.com. Heartland advises cardholders to examine their monthly statements closely and report any suspicious activity to their card issuers.

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