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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, 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.


Scam watch: Bank theft, e-books, mortgage modification

Santa Ana resident accused of running illegal robocalling network

Scam watch: Computer virus warning, Ponzi scheme, fake BBB email

-- Tiffany Hsu

Photo: Larry Steagall / Kitsap Sun / AP Photo

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.”


ICANN approves open Web domain name rules: .anything is possible

Restaurant predictions for 2012: Popcorn, pine needles, smartphones

-- Tiffany Hsu

Photo: Anne Cusack / Los Angeles Times

Justice Department opinion allows states to offer online gambling

Montana lottery
The Justice Department has opened a window for states to offer their residents online gambling, saying such activity would not violate existing federal law.

The legal opinion could be a boon for states looking for ways to expand their lotteries to help close large budget deficits.

Assistant U.S. Atty. Gen. Virginia A. Seitz  said that proposals from state lotteries in Illinois and New York to sell tickets to adult residents online would not violate the 1961 federal Wire Act because they do not involve sports betting.

The 13-page legal opinion was issued Sept. 20 and quietly released by the Justice Department last week.

The Poker Players Alliance, which has been working for years to get Congress to make online poker legal, said the Justice Department opinion was "a much needed clarification of an antiquated and often confusing law."

"This will provide policy makers at both the state and federal level with the legal confidence to move forward with licensing and regulation of online poker and other non-sporting activity within their respective jurisdictions," said the group's executive director, John Pappas. He called on Congress to enact federal regulation of online poker to avoid a patchwork of different state laws.

State-run online lotteries also would not violate a controversial 2006 law, the Unlawful Internet Gambling Enforcement Act, which was meant to crack down on online poker sites. That law prohibits "unlawful Internet gambling," which is defined as placing, receiving or transmitting a bet via the Internet in a jurisdiction where federal or state laws make such bets illegal.

The 2006 statute allows bets "initiated and received or otherwise made exclusively" within a state that allows gambling and specifically says that the "intermediate routing of electronic data" does not factor in determining the location of the bet.


FBI shuts down Internet poker sites

Full Tilt Poker built Ponzi scheme, federal prosecutors say

California may benefit from legalizing sports betting, state senator says

 -- Jim Puzzanghera in Washington

Photo: A lottery machine in a Montana grocery store. Credit: Eliza Wiley Independent Record / Associated Press



Absolute Poker co-founder pleads guilty to conspiracy charges

Guilty plea in illegal online gambling case

A co-founder of Absolute Poker, one of three major Internet card-play sites targeted by the federal government this year, pleaded guilty Tuesday to conspiracy charges linked to a sprawling illegal gambling case.

The felony charges against Brent Beckley include bank and wire fraud and violation of Internet gambling law. Prosecutors have accused Absolute Poker, as well as fellow gambling sites Full Tilt Poker and PokerStars, of convincing financial institutions to process online gambling payments by disguising them as transactions with Internet retail merchants.

Beckley told a judge in the U.S. District Court of Manhattan that he “knew that it was illegal to deceive the banks,” according to the Associated Press. He will face sentencing April 19 after striking a plea deal that could land him in prison for a year to a year and a half.

The three gambling sites involved in the case are headquartered abroad.

The government filed a $3-billion civil lawsuit against the companies, which it amended in September to describe Full Tilt Poker as a “global Ponzi scheme” that was “not a legitimate poker company.”

The FBI shut down their websites in the U.S. in April on a day that many poker players now refer to as Black Friday. Prosecutors indicted the founders of the three businesses on charges of bank fraud, money laundering and gambling law violations.

Bradley Franzen, another defendant who helped work with payment processors, pleaded guilty in May after initially entering a not guilty plea.


Federal prosecutors call Full Tilt Poker 'a global Ponzi scheme'

L.A. class-action suit seeks $900 million from Full Tilt Poker

Three largest online poker sites indicted and shut down by FBI

-- Tiffany Hsu

Photo: Gambling chips and cards. Credit: Robert Sullivan / AFP Photo

Consumer Confidential: Online deals, safe cars, holiday accidents

Here's your fightin'-words Friday roundup of consumer news from around the Web:

--It's Free Shipping Day! More than 2,500 retailers are participating. And just in time, here are some of the sweeter deals out there to save you even more money. At Coldwater Creek's website, enter the promo code BEST40 to get 40% off your purchase. At J. Crew's site, use the code CHEER to get 30% off. At Land's End, you'll get 40% off, and you don't even need a promo code. At the Levi's site, use the code THIRTY to get 30% off. And for Perry Ellis, enter PESIRE30AF for 30% off. (Time)

--Which cars are safest? Glad you asked. The Insurance Institute of Highway Safety has crunched the numbers and come up with its winners. Companies with the strongest showing included Subaru, which got top ratings for all five models it sells in the U.S. Toyota got the most top picks, with 15 of its Toyota, Lexus and Scion models. Honda gets a nod for most improved. Of the 18 vehicles new to top safety pick status this year, 10 of them were Honda or Acura models. Among high-mileage green cars, the Toyota Prius V qualifies. So do the plug-in Nissan Leaf and Chevy Volt. (MoneyWatch)

--And be safe in the home as well. According to the Consumer Product Safety Commission, more than 13,000 people were treated in emergency departments nationwide last year due to injuries involving holiday decorations. This is an increase from 10,000 in 2007 and 12,000 in 2008 and 2009. Although estimates of deaths and injuries related to Christmas tree and candle fires are down, there are still an alarming number of incidents. Live trees or other evergreen decorations that have dried out burn fast and hot in a matter of seconds if they come in contact with an open flame. The agency recommends extra caution with flames, make sure your tree is watered, and be careful climbing up and down ladders. (Times News)

-- David Lazarus

Photo: It's Free Shipping Day. But don't overlook all the discounts as well. Credit: Lawrence K. Ho / Los Angeles Times


Consumer Confidential: Chase disclosure, retail sales, Toys R Us

Here's your thank-the-lord-for-the-nighttime Thursday roundup of consumer news from around the Web:

— From the Better Late Than Never file: Chase bank is making its checking accounts easier for customers to understand. The bank says it will start providing a three-page disclosure that helps consumers quickly identify the key terms of its basic checking account, such as the monthly fee and conditions customers need to meet to have that fee waived. Chase will be the first major bank to adopt a version of the consumer-friendly disclosure developed by the Pew Charitable Trusts earlier this year. As it stands, Pew says disclosures are often more than 100 pages and bury the fees and terms of most interest to consumers. The model disclosure developed by Pew in April is just one page and highlights terms such as the ATM withdrawal fee and overdraft policy. (Associated Press)

— Retail hopes are rising for the holiday season. The National Retail Federation says it now expects holiday sales for the November-December period to rise 3.8% to a record $469.1 billion. That's up from its more modest 2.8% forecast made in early October when the economy's health looked more uncertain. The new forecast is hardly stellar. The projected gain is still below the 5.2% pace seen during the holiday 2010 season from the prior year, but it's well above the 2.6% average increase over the past 10 years. And any upgraded forecast is good news as stores look to the final days before Christmas to rope in holiday shoppers. (Associated Press)

— But some retailers are taking no chances. Toys R Us says its stores nationwide will remain open for 112 uninterrupted hours beginning at 6 a.m. Tuesday, Dec. 20, and continuing through 10 p.m. on Christmas Eve. This is the second year Toys R Us has opened 24 hours during the holidays. The company will hold a two-day sale from Tuesday to Wednesday, and it has extended shipping deadlines. Orders submitted online by 2 p.m. on Christmas Eve can still be picked up in store on the same day, so presents can be wrapped and ready for Christmas morning. (Orlando Sentinel)

— David Lazarus

Photo: Chase wants customers to finally understand their checking accounts. Credit: Kathy Willens / Associated Press


Scam watch: Computer virus warning, Ponzi scheme, fake BBB email

Here is a roundup of alleged cons, frauds and schemes to watch out for.

Computer virus warning -- The Federal Trade Commission has started mailing refunds to 300,000 consumers who were victims of a scam in which they were tricked into buying unnecessary software to remove nonexistent viruses and spyware from their computers. The perpetrators of the scheme caused ads to appear on victims’ computers, informing them that a “system scan” had detected viruses and other threats that needed to be removed immediately. In December 2008 the FTC obtained a court order putting a halt to the scheme. The FTC alleged that the defendants conned more than 1 million consumers into buying software products such as Winfixer, Drive Cleaner and Antivirus XP to remove the malware the bogus scans had supposedly detected. Consumers who believe they are entitled to a refund or have questions may call the settlement administrator toll free at 1-877-853-3541 or visit for more information.

Ponzi scheme -- A San Diego investment manager was arrested on charges that he ran a $25-million investment fraud, in which he falsely claimed that he made huge profits trading stocks. Federal prosecutors alleged that Robert L. Holloway lost millions trading stocks, diverted more than $1 million of investors’ money to himself and used new investor money to pay returns to early investors. The scheme operated from 2005 to 2007, prosecutors said. Holloway, 54, is charged with four counts of wire fraud and one count of filing a false tax return.

BBB emails -- The Better Business Bureau is cautioning businesses and consumers about an email that falsely claims to be from the BBB and could infect computers with damaging viruses. The email subject line reads, “Complaint from your customers,” and contains a link to a site not affiliated with the consumer protection group. Consumers should not click on the link because it could cause their computers to be infected with a damaging virus. Anyone who has already clicked on the link should have their computers scanned for spyware, viruses or other potential problems, the BBB said. The group is working with law enforcement to determine the source of the emails.


L.A. radio talk host indicted in alleged Ponzi scheme

Scam watch: Discount electronics, telemarketers

Scam watch: Cyber Monday, pre-IPO fund, tech support

-- Stuart Pfeifer

Photo: A laptop computer. Credit: John Adkisson / Reuters 

Consumer Confidential: Amazon fallout, hybrids galore, Ford recall

Here's your Brandy-you're-a-fine-girl Friday roundup of consumer news from around the Web:

--It's not just brick-and-mortar retailers who are unhappy about luring away shoppers with its Price Check app. Sen. Olympia Snowe (R-Maine) called on the Internet heavyweight to drop its promotion because it gives consumers an incentive to gather price data from small retailers and leave stores without spending money. Amazon is offering a 5% discount on Saturday to entice users to try a new mobile app that compares its prices with real-world retailers. "Amazon’s promotion -- paying consumers to visit small businesses and leave empty-handed -- is an attack on Main Street businesses that employ workers in our communities," Snowe says. "Incentivizing consumers to spy on local shops is a bridge too far." (Bloomberg)

--There's likely a hybrid in your future. One of every two cars will be either a hybrid or some other alternative-fuel vehicle by 2040, oil giant Exxon Mobil predicts. Hybrids, which rely on both gas and electricity for power, currently account for less than 1% of all vehicles on the world's roads. They should move into the mainstream as governments boost fuel-efficiency requirements, Exxon says. Power for those hybrids, along with other vehicles and a growing number of households around the world, will increasingly come from natural gas, nuclear power and renewable energy sources like wind, Exxon believes. But the largest publicly traded oil company also makes clear that oil will remain king of the energy world for many, many years. (Associated Press)

--Speaking of wheels, heads up: Ford is recalling more than 128,000 Ford Fusion and Mercury Milan sedans from the 2010 and 2011 model years because the wheels can fall off the cars. The recall affects only cars with 17-inch steel wheels built from April 1, 2009, through April 30, 2009, and from Dec. 1, 2009, through Nov. 13, 2010. Federal regulators say that bolts holding the wheels on can fracture, causing a vibration. If the vibration is ignored, the wheels can separate from the car. Ford says it's not aware of any crashes or injuries caused by the problem. (Associated Press)

-- David Lazarus

Photo: Sen. Olympia Snowe thinks Amazon should back off its price-check promotion. Credit:  Harry Hamburg / Associated Press


Consumer Confidential: GOP block, Amazon discount, credit card debt

Here's your thick-as-a-brick Thursday roundup of consumer news from around the Web:

--As expected, Senate Republicans have blocked a vote on whether to approve President Obama's pick to run the new Consumer Financial Protection Bureau. GOP lawmakers say they have nothing against former Ohio Atty. Gen. Richard Cordray. They just don't like the agency, which is intended to keep an eye on credit card issuers, mortgage lenders and others with a track record for -- how shall we put it? -- not always acting in consumers' best interest. Republicans want to water down the agency's leadership structure, and they say they won't approve anyone to run the show until they get what they want. I'll have more on this in my Friday column.

--Amazon is stepping up its game. The online retail heavyweight says it will give customers a 5% discount if they check out the price of something in a brick-and-mortar store and then buy it via the Net from Amazon. The trick is Amazon's Price Check app, which allows users to instantaneously check to see whether Amazon sells the same merchandise for a better price. This Saturday, app users will get that 5% discount below whatever the store's price may be. Amazon’s app is available for the iPhone and Android smartphones at no cost to the user. You can do a price check by scanning an item’s bar code or typing in a search query, or even by snapping a photo or saying the product name. Needless to say, real-world stores aren't happy about the promotion. (

--But go a little easy on the spending. Consumers piled on $16.8 billion in credit card debt in the third quarter, up 154% from the same quarter last year, according to The news comes on the heels of a report by First Data that credit card spending in the U.S. rose in the first three quarters of the year. The Great Recession may have promoted many consumers to put away their plastic for a while, but they are apparently spending again -- big time. Based on the results of its study,’s latest projection is that consumers will end 2011 with roughly $64 billion more in credit card debt than they began it with. Ouch. (

-- David Lazarus

Photo: President Obama wants Richard Cordray to run a new watchdog agency. Senate Republicans think otherwise. Credit: Joshua Roberts / Bloomberg


Consumer Confidential: Unhealthiest cereals, email scam warning

Here's your why-do-fools-fall-in-love Wednesday roundup of consumer news from around the Web:

-- So what are the unhealthiest cereals? Glad you asked. According to the Environmental Working Group, Kellogg’s Honey Smacks, at nearly 56% sugar by weight, leads the list of the 10 worst children’s cereals. In fact, a one-cup serving of the brand packs more sugar than a Hostess Twinkie, and one cup of any of 44 other children’s cereals reviewed has more sugar than three Chips Ahoy! cookies. No. 2 on the bad-for-you list is Post Golden Crisp (51.9% sugar by weight), followed by Kellogg's Froot Loops Marshmallow (48.3%), Quaker Oats Cap'n Crunch's OOPS! All Berries (46.9%) and Quaker Oats Cap'n Crunch Original (44.4%). So what's good? You can't go wrong with a nice bowl of homemade oatmeal. (

-- Heads up: The Better Business Bureau is warning about a malicious email circulating the country. It says the email appears to come from a Better Business Bureau employee about a recently filed complaint with the organization. The email tells recipients to review the matter and advise the organization of their position on the complaint. Recipients are directed to a link which the email claims will take the reader to the BBB website. In fact the link takes recipient elsewhere, where a virus can be downloaded to your computer. An attachment with the mail may also contain a virus. The BBB says that if you get an email like this, delete it. Pronto. (

-- David Lazarus

Photo: Some kids' cereals are nearly half sugar by weight. Credit: Gene J. Puskar/Associated Press


Consumer Confidential: Slower mail, cyber sales, bad brakes

Here's your more-than-a-woman Monday roundup of consumer news from around the Web:

--Here's the latest bid by the U.S. Postal Service to cut its losses: slower mail. The Postal Service, which is trying to cut $20 billion in operating costs by 2015, is asking the Postal Regulatory Commission to let it relax delivery standards for first-class mail, which includes letters and bills. Slowing mail delivery would reduce the number of mail-processing plants the Postal Service needs. The service said in September that it was considering loosening delivery standards and closing 252, or more than half, of its mail-processing plants. The agency said last month it expects a $14.1-billion loss in 2012 as mail volume continues to drop. (Bloomberg)

--Clearly, we like shopping online. Purchases reached nearly $6 billion for the "Cyber Week" that runs from the Sunday before Cyber Monday through Dec. 2, according to the latest data from ComScore. The big drivers of the bountiful Cyber Week were three of the four heaviest online spending days in history, each of which posted sales in excess of $1 billion: Cyber Monday, the heaviest online spending day on record at $1.25 billion; Tuesday, Nov. 29, at $1.12 billion; and Wednesday, Nov. 30, at $1.03 billion. Online spending for the first 32 days of the November-December 2011 holiday season has totaled $18.7 billion, a 15% increase compared with the corresponding days last year. (Washington Business Journal)

--Heads up: Subaru is recalling three of its car models and Honda is recalling some motorcycles, all because the brakes can malfunction. The Honda recall covers 126,000 GL-1800 motorcycles from the 2001 to 2012 model years. A problem with a secondary brake master cylinder can cause the rear brake to drag, possibly causing a crash or fire. The Subaru recall involves nearly 32,000 Legacy, Outback and Impreza models from the 2012 model year. A defective brake master cylinder could cause the brake pedal to travel farther than expected. Federal safety regulators say this could cause a driver to misjudge the amount of pressure needed to stop quickly. (Associated Press)

-- David Lazarus

Photo:: The U.S. Postal Service is trying to cut $20 billion in operating costs by 2015. Credit: Paul J. Richards / AFP/Getty Images



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