Online car-selling scam nets $4 million, prosecutors say

For more than three years, six foreign nationals ran an Internet vehicle-selling scam that bilked customers out of more than $4 million without delivering a single car, motor home or boat, according to a federal indictment out of Los Angeles this week. 

The indictment charges six people from Germany, Russia, Romania and Latvia with conspiracy to commit bank and wire fraud and money laundering.

Starting in 2007 through 2010, the group put vehicles up for sale on auto-trading websites such as EBay Motors, Edmunds.com and Craigslist and collected at least $4 million from customers, according to the U.S. Attorney’s office.

The funds were put into at least 110 bank accounts that were fraudulently set up using fake identities, according to the indictment. The money was then sent to Europe using wires, carry-on luggage or mailed packages, according to the indictment.

Prosecutors point to Romanian national Corenliu Stefan Weikum and Russian national Yulia Meshina-Heffron -– who both went by a slew of aliases –- as the ringleaders of the scheme.

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Retail Roundup: L.L. Bean's duck boots, McDonald's mobile, Lowe's

-- Maine retailer L.L. Bean says the duck boot is back in style, at least among fashion-conscious, trend-hungry college students around the country. This year, the nearly century-old outdoor apparel company sold about 400,000 pairs of the hunting boots -- which have hardy rubber soles -- up from 150,00 just four years ago, the Associated Press reported.

The boot is benefiting from a vintage fashion sense prevalent among college students, the AP said, and also new styles that updated the classic boot with bright pops of color (such as pink) for the spring. This would be the same sartorial flair that pushes flocks of teenagers to granny sweaters and thick, black-rimmed glasses.

-- Fast-food purveyor McDonald's is pushing more into the mobile space with a geo-targeted ad campaign touting its hot drinks. Inside the iPhone app for the music service Pandora, McDonald's put ads that can register the user's location and give information on the nearest McDonald's restaurant, along with photos of its hot chocolate and McCafe offerings. The ads also offer free holiday wallpapers downloads for the phone.

-- Home-improvement giant Lowe's Cos. acquired online home improvement retailer ATG Stores for an undisclosed amount. ATG will remain an independent subsidiary of Lowe's, with separate branding and merchandising, Lowe's said in a statement. No jobs are expected to be cut as a result of the acquisition.

"The addition of ATG Stores is a strategic fit, providing more opportunities for Lowe’s to be a relevant partner at every stage of the home improvement process and deliver better customer experiences from inspiration to planning to enjoyment,” Robert A. Niblock, Lowe’s chief executive and chairman, said in a statement.

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Photo: Rows of boots at the facility where L.L. Bean boots are assembled in Brunswick, Maine. Credit: Pat Wellenbach / Associated Press

Kimberly-Clark to launch 'designer' toilet paper roll covers

Apparently, even toilet paper rolls can be fashionably dressed.

That's the rather whimsical tack taken by consumer products giant Kimberly-Clark Corp., which is launching a "spring line" of colorful covers to hold extra rolls and add pizazz to the bathroom.

The company tapped interior designer Jonathan Adler to be the creative brain behind the "collection" -- and the three designs bear his signature stamp of graphic prints combined with bold color (and fancy descriptions such as "chevron pink," "clover green" and "barjello blue").

The covers are meant to highlight a new version of Kimberly-Clark's Cottonelle toilet paper. The company's other mission: to "change people's point of view on toilet paper."

Adler was game, and said his passion lies with transforming mundane objects into "eye-catching conversation pieces."

"Until now, toilet paper has been a relatively untouched canvas," Adler said in a statement.

Those seeking a conversation piece for their loos can either order one for $3.99 at www.respecttheroll.com. Or just buy a specially marked package of Cottonelle toilet paper and pay $1.99 for shipping.

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Photo: New toilet paper roll covers from Kimberly-Clark. Credit: Kimberly-Clark

CDR Financial Products founder pleads guilty in municipal bond case

A Beverly Hills financial firm and its founder pleaded guilty to federal criminal charges that they defrauded government agencies by steering investment contracts to firms that paid them kickbacks.

David Rubin, 50, and his company, CDR Financial Products Inc., were accused of running sham auctions for government agencies looking to invest money raised through municipal bond offerings. The contracts were awarded to favored firms that secretly paid kickbacks to CDR, not always the firm offering the highest returns, the government alleged.

Rubin, who sobbed at Friday’s plea hearing in New York, is scheduled to be sentenced April 27. He had unsuccessfully requested a delay in his trial to be with his wife, who is dying of cancer, Bloomberg News reported.

Two former CDR executives are scheduled to stand trial on similar charges next week in federal court in Manhattan.

Rubin developed a niche helping local, county and state agencies invest money raised from bond issues for such things as school or road construction.

Because government agencies typically don't need to use the money immediately, they often hire companies such as CDR to arrange short-term and longer-term deals to invest the funds.

The indictment alleged that CDR engaged in a pay-to-play scheme in which investment companies secretly paid CDR kickbacks to win government contracts. The alleged scheme cost the government agencies money because the contracts did not always go to investment providers offering the best return, the indictment said.

Rubin is the 10th person to plead guilty in an ongoing federal investigation of the municipal bond industry, the Justice Department said in a news release.

Federal prosecutors had amassed almost 800,000 tape recordings and 125 million pages of documents during a three-year investigation of CDR, defense lawyers said earlier this year, according to Bloomberg News.

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Energy Department predicted the 2011 boom in U.S. fuel exports

The 2011 Argus Americas Crude Summit, held in Houston last January, was named "Life After Macondo" and focused on the aftermath of the BP Deepwater Horizon oil spill. But American consumers might have been far more interested in a presentation that ventured far from that script.

Joanne Shore, team leader and lead operations research analyst at the Energy Department's Energy Information Administration, and colleague John Hackworth essentially explained why Americans were about to pay more for gasoline in 2011 than they ever had before.

Shore's and Hackworth's analysis (which can be found here) explained why it wouldn't matter that Americans were driving less and using higher-mileage vehicles that burned less fuel. It wouldn't matter that additives like ethanol were lowering the amount of refined oil in every gallon of gasoline.

Even as U.S. refiners were shutting down facilities because of lowered U.S. demand, Shore and Hackworth explained, they had already found thriving and lucrative markets overseas for their products.

Their main points: "world growth in distillate fuels" demand had "provided some attractive export opportunities for U.S. refiners"; U.S. low-sulfur diesel products were more attractive to foreign buyers than higher-sulfur fuel coming out of Russia; and they were far closer to South and Central American markets than distant European competitors.

Their analysis seems to have been correct. In 2007, U.S. fuel exports overseas held steady throughout the year at 1.24 million to 1.25 million barrels a day, according to Energy Department statistics. In 2011, the average export amount reached a record level that was more than twice as high, and the trend accelerated throughout the year.

In November and December, U.S. fuel exports averaged between 2.77 million barrels a day and 2.89 million barrels a day, their highest ever. In the U.S., in 2011, drivers paid an average of about $3.50 a gallon for gasoline, also the highest ever.

Today, according to the AAA Fuel Gauge Report, Californians are paying an average of $3.602 for a gallon of regular, 28.7 cents a gallon more than they have ever paid on Dec. 30. Nationally, the average cost for a gallon of regular today is $3.269 or 19.8 cents a gallon more than ever on this day of the year.

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Photo: Valero Energy Corp.'s Wilmington refinery. U.S. refiners exported record amounts of fuel to foreign buyers after Energy Department predicted a booming market overseas. Credit: Christina House / Los Angeles Times

Ford-brand auto sales pass 2 million for first time since 2007

Sales of Ford-brand autos zipped past the 2-million mark for the first time since 2007, Ford Motor Co. said Friday.

With strong year-over-year gains recently from models such as the Ranger, the Explorer and the Escape, Ford’s namesake brand is set to finish 2011 in prerecession style.

The Dearborn, Mich.-based automaker, the second-largest in the U.S., said that sales of small Ford-brand cars such as the Fiesta and Fusion are on track to finish up 20%. Light trucks may see a 30% gain.

Last month, 160,560 Ford-brand autos were sold –- a more-than-20% increase compared with the same month in 2010. As of the end of November, the company reported sales of more than 1.86 million Ford-brand vehicles.

Recently, the automaker said its retail market share has averaged about 15% -- its highest in five years. Ford also owns the Lincoln and Mercury brands.

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Photo: A 2012 Ford Focus SEL Sedan, left, and a 2012 Ford Fiesta SE. Credit: Wilfredo Lee / Associated Press

Sears, Kmart closings: Shares slide to new low on Fitch downgrade

Sears Holding Corp. is ending the year on a bitter note. The company, which earlier this week posted a list of 79 out of the up to 120 Sears and Kmart stores it plans to close and was then downgraded by Fitch Ratings, is now watching its stock bleed out to a new low.

In mid-day trading in New York, the beleaguered retailer’s stock was down to $32.20, heading for its fourth straight daily drop and less than half of the year-earlier price of $74.15.

Fitch Ratings downgraded the company on Thursday to CCC from B, saying that Sears’ liquidity levels next year will likely be “inadequate,” which could potentially banish the retailer into restructuring. 

And Standard & Poor’s said Wednesday that it was putting a watch on Sears’ credit rating as it considers a possible downgrade for the retailer.

Illinois-based Sears said Thursday that it will close 41 Sears stores and 38 Kmart stores – the first thrust of a plan to shut down 100 to 120 locations, including three in California -- following a disappointing holiday season.

Domestic sales tumbled 5.2% in the eight weeks through Christmas Day, the company said Tuesday. That comes after more than four years of sliding sales and projections that fourth-quarter earnings will be less than half the $933 million Sears pulled in during the same period a year earlier.

The company said it will now focus its resources on its strongest stores.

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Air Force buys souped-up, stealthy version of Predator drone

Adding to its growing arsenal of robotic aircraft, the Air Force has purchased a new high-flying hunter-killer drone.

For $15 million, the military bought one stealthy, jet-powered drone, dubbed Avenger, from General Atomics Aeronautical Systems Inc. -- the same San Diego company that builds MQ-1 Predators and larger MQ-9 Reapers.

The remotely piloted Predators and Reapers have become a central element for the Obama administration to hunt and destroy targets in the Middle East. The Avenger, also known as Predator C, is General Atomics’ third and latest version of these drones.

With a length of 44 feet and maximum takeoff weight of 15,800 pounds, the Avenger is larger, faster and can carry more weaponry than its predecessors.

For example, the propeller-driven Reaper is 36 feet long and has a maximum takeoff weight of 10,500 pounds. The largest bombs it carries weigh 500 pounds and hang from its wings.

The Avenger, on the other hand, has an internal bomb bay like other modern fighter and bomber jets. It is designed to carry 2,000-pound bombs, as well as heavier camera and sensor packages.

Both the Reaper and Avenger have 66-foot wingspans with a maximum altitude of around 50,000 feet.

The Reaper can stay aloft for 30 hours at time –- 10 hours longer than the Avenger. But with the power of a turbofan engine, the Avenger’s top speed is around 460 mph, much faster than the Reaper's 276 mph.

General Atomics first flew the Avenger back in April 2009 at the company's Gray Butte Flight Operations Facility in Palmdale. But even with more than two years of flight tests under its belt, the Avenger is strictly a test aircraft for the Air Force to evaluate its “performance characteristics,” said Jennifer Cassidy, a Pentagon spokeswoman.

“There is no intention to deploy the aircraft in the war in Afghanistan at this time,” she said.

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Photo: General Atomics' Avenger in mid-flight. Credit: General Atomics Aeronautical Systems Inc.

Restaurants in November had best performance in five months

Restaurants in November turned in their best performance in five months and are looking forward to solid sales and a better economy in 2012, according to a major trade group.

A monthly performance index calculated by the National Restaurant Assn. hit 100.6 in November, up 0.6% from October and the highest level in nearly half a year. Any level above 100 signifies growth.

More customers visited eateries during the month, leading to the strongest net sales in more than four years at establishments open more than a year. The trade group’s current situation index rose 0.8% from October to 100.2 last month.

And restaurant operators are feeling more optimistic, pushing the expectations index up 0.4% to 100.9 in its third consecutive monthly gain. Nearly half said they plan to buy equipment, expand or remodel within the next six months.

But come Sunday, the industry will start facing some changes.

Health inspectors across California will begin to enforce a state law that requires about 900,000 restaurant workers that prepare, serve or store food to hold a food handler card. Employees must complete food safety training and pass a test to earn the card, according to the California Restaurant Assn.

Meanwhile, the National Restaurant Assn. is opposing a new program set to launch next month in which the Internet Corp. for Assigned Names and Numbers, or ICANN, will begin accepting applications for new Internet domain names.

The restaurant association claims that eateries will be forced to spend at least $185,000 each protecting their brands and trademarks. 

“For our largest restaurant-member brands, the price tag is exorbitant,” said Scott DeFife, the association’s executive vice president of policy and government affairs, in a statement. “For the hundreds of thousands of smaller restaurant operators who depend on the Internet to communicate with guests, the costs and confusion could be insurmountable.”

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TCW and Jeffrey Gundlach reach settlement

Star bond trader Jeffrey Gundlach and his former employer, TCW Group Inc., have agreed to settle a lawsuit over allegations that he stole trade secrets to set up his own firm. Both sides announced the deal late Thursday but did not disclose terms.

Gundlach was found liable in September for breaching his fiduciary duty to TCW, which fired him in December 2009. But in what essentially was viewed as a win for Gundlach, the Los Angeles jury found no harm to TCW in that breach and awarded the firm no financial compensation.  

Furthermore, the jury found that TCW must pay $66.7 million to Gundlach and his three codefendants for failure to pay wages owed them before leaving the money-management firm to set up a rival company in 2009.

Both sides were still battling over TCW's claim that Gundlach had misappropriated the company’s trade secrets, causing harm to TCW. Any damages on that claim were to be decided by a judge, though TCW was asking for $89 million.

TCW, which manages about $120 billion in assets for clients, fired Gundlach in December 2009 in a shake-up that rocked the mutual-fund world. One month later the company sued Gundlach, alleging that he and key aides conspired against the firm and stole TCW proprietary information to set up a new fund-management business, DoubleLine Capital, almost overnight.

Gundlach, 51, then countersued and accused TCW, the parent of Trust Co. of the West, of ousting him after 24 years at the firm to cheat him out of a huge chunk of promised income.

The two lawsuits were combined into one trial, which began in late July and was closely watched on Wall Street.

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Photo: Jeffrey Gundlach. Credit: Los Angeles Times

Three California Sears stores among 79 outlets to close nationwide

Three Sears stores in California are among 79 stores nationwide on the chopping block after a dismal holiday season forced Sears Holdings Corp. to retool its strategy.

Two Sears stores in San Diego and one in El Monte will be closed at a date yet to be determined. The Illinois retailer posted a list of 41 Sears and 38 Kmart outlets targeted for closure, the first wave of the 100 to 120 total stores that the company ultimately plans to shut down. The list can be viewed here.

Retail analysts believe that the company, which has suffered more than four years of sales declines, may be edging toward bankruptcy unless it takes drastic action to upgrade its stores and revamp its merchandise.

After domestic sales dropped 5.2% in the two months leading up to Christmas, the retailer announced a new strategy redirecting resources away from "marginally performing" stores and toward more profitable shops. The company said Tuesday that lackluster holiday sales coupled with rising costs will slash fourth-quarter earnings to less than half the $933 million it reported a year earlier.

Sears Holdings is controlled by billionaire financier Edward Lampert, who gained control of Kmart in 2003 and two years later brought Sears, Roebuck & Co. into the fold. As board chairman, Lampert has held down costs by cutting investment in stores and reducing product assortment, decisions that retail analysts say won short-term profits at the expense of long-term growth.

Sears shares fell 43 cents, or 1.3%, to $32.90 on Thursday.

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Photo: A Sears store in Niles, Illinois.Credit: Tim Boyle/Getty Images