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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Photo: Larry Steagall / Kitsap Sun / AP Photo

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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Photo: Sonny Hedgecock / AP Photo / The High Point Enterprise

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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Photo: Anne Cusack / Los Angeles Times

Butterball turkey plant raided on animal cruelty concerns [Updated]

North Carolina officials raided a Butterball turkey facility Thursday looking for signs of animal cruelty, according to an animal advocacy group that had sent undercover footage of the site to authorities.

The Hoke County Sheriff’s Department obtained a warrant to search Butterball’s turkey semen collection factory in Shannon, N.C., according to Mercy for Animals.

The activist group had collected hidden-camera footage of the location in November and December, which it then forwarded to law enforcement along with a legal complaint against Garner, N.C.-based Butterball. The video is available here.

Mercy for Animals said it found the birds being kicked, stomped on, dragged and beaten at the facility. Some were suffering from bloody open wounds and infections as well as severe feather loss and broken bones, the group claimed.

The company claims to be the largest turkey producer in the country, distributing 20% of products based on the fowl. Butterball could not be reached for comment.

[Updated 12:53 p.m.: Butterball said in a statement Thursday that it is working with county officials about Mercy For Animals’ allegations.

“Butterball has a zero tolerance policy for any mistreatment of our birds or the failure to immediately report mistreatment of our birds by any associates,” the statement said. “We are performing extensive internal and third-party audits as part of our own investigation. Employees found in violation of Butterball’s animal welfare policies will be subject to immediate termination.”]

Last month, Mercy For Animals went after McDonald's egg producer Sparboe with undercover video of poor chicken treatment, causing the fast-food giant to dump the supplier.

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Index of pending home sales climbs to 19-month high

The most Americans in more than a year and a half signed contracts in November to buy homes, raising hopes that a boost in sales will follow, a real estate industry group reported Thursday.

An index of pending purchase agreements rose to 100.1 last month, up 7.3% from October, according to the National Assn. of Realtors. The reading is the highest since the gauge spiked to 111.5 in April 2010 when buyers rushed to take advantage of an expiring federal tax credit. The November increase followed a 10.4% gain from September to October.

A reading of 100 is typically considered a healthy level, according to the association. The index is up 5.9% from November 2010.

But economists cautioned that many potential buyers are canceling deals before the sale goes through.

"Housing affordability conditions are at a record high and there is pent-up demand from buyers who've been on the sidelines, but contract failures have been running unusually high,” Lawrence Yun, the realty group's chief economist, said in a statement.

The latest jump in pending home sales could be a result of buyers' recommitting to contracts after hashing out problems that had put deals on hold. Most home-buying agreements are finalized a month or two after a contract is signed.

The largest growth in signed contracts last month came in the West, with a 14.9% boost, followed by increases of 8.1% in the Northeast, 4.3% in the South and 3.3% in the Midwest.

Last week, the Commerce Department said that housing starts were up 9.3% in November from October even as statistics from DataQuick showed home sales down 4.2% in California in the same period (though they were up 4% from a year earlier).

Home prices have continued to fall in the nation’s largest cities, dropping 1.2% from September to October, according to the Standard & Poor’s/Case-Shiller index — probably leading some potential buyers to try to wait for the market to bottom out.

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Photo: Donna McWilliam / Associated Press

Wendy's reenters Japan with $16 foie-gras-and-truffle burger

Wendy's is making a high-end reentry into Japan with a $16 burger festooned with foie gras and truffles.

The third-largest fast-food chain in the U.S. (potentially soon to supplant Burger King for the No. 2 spot) took a breather from Japan for two years but returned this week to launch a restaurant in a luxury shopping area in Tokyo.

That franchisee developed the luxurious 1,280-yen (about $16.45) sandwich -– the folks at Wendy's corporate offices said they "really don’t have anything to do with it." The goose liver confection won't show up in the U.S. anytime soon -– Wendy's said its most expensive item here is likely a salad or a triple cheeseburger, in the $5-to-$6 range.

Besides, customers in California already have their pick of foie gras sandwiches -- at least before the delicacy is outlawed in the state next year. There's one sandwich for $16 at the Torrance restaurant Buffalo Fire Department, and another -- for $26 -- at RH in West Hollywood.

Wendy's Chief Executive Emil Brolick has said the company will aim to eventually triple its number of foreign restaurants to about 1,000 eateries. Other fast-food giants, including KFC owner Yum Brands, are also looking overseas for growth opportunities.

That's because chains are better able to experiment internationally, according to Nick Setyan, a restaurant industry analyst at Wedbush Securities Inc.

Fast-food chains that are associated with a "get-in, get-out" vibe in the U.S. are considered more high-end and even elite abroad, Setyan said. In many other countries, Pizza Hut is a sit-down casual dining concept and McDonald's is an event destination, he said.

Chains can work their creative magic trying to adapt to cultural preferences among foreign customers, Setyan said. Hence McDonald's Chicken Maharaja Mac in India,  where many residents don't eat beef for religious reasons. KFC sells congee rice porridge in China. Burger King’s recent Russian ads are much more flamboyant than the ingredient-focused equivalents in the U.S.

Fast-food chains are increasingly feeling pressure domestically, especially as a slew of "better burger" fast-casual brands, such as Five Guys and Smashburger, poach customers.

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Photo: The Foie Gras Rossini from the Japan Premium series. Credit: Wendy's Japan via Bloomberg

Spot gold falls to six-month low of $1,562.90 an ounce

Spot gold took its fifth consecutive daily tumble Wednesday to $1,562.90 an ounce, plunking itself at its lowest price in six months.

The last time the precious metal was flirting with $1,550 was when it hit $1,562.30 on July 12. It then went on to reach a high of $1,888.70 on Aug. 22, as fearful investors fled from aftershocks of the U.S. debt downgrade.

The spike sparked speculation that the safe-haven commodity could breach the near-mythical $2,000-an-ounce threshold.

Those fantasies are now kaput, according to analysts — at least for the foreseeable future. The triple threat of a strong dollar, austerity programs in Europe and an overload of bullish investors has resulted in a “disconcertingly bearish concoction,” according to commodities analyst Dennis Gartman.

“Anybody who is long is under duress, anybody who is short is in control,” Gartman said of the gold situation. “There is something very serious going on.”

Throw into the mix the light volumes that are common during year-end trading and “it’s hard to tell what’s really going on this week,” said Matt Zeman, a metals trader with Kingsview Financial.
“It gets really goofy,” he said. “But the chart for gold doesn’t look healthy.”

Investors also tested gold’s $1,550 floor last week before the price briefly rebounded. But Zeman said the continuing downward pressure could eventually spark a sell-off of the metal.

“We may see it break wide open,” he said. “The best place to be in the gold market right now is on the sidelines.”

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Less than a quarter of companies to hire in 2012: CareerBuilder

The employment picture won’t change much next year, with less than a quarter of hiring managers planning to take on more employees.

In a survey of more than 3,000 human resource and hiring professionals, 23% said they’ll add full-time, permanent staff in 2012, down a bit from the 24% who said the same this year, according to job search site CareerBuilder. The percentage of companies that plan to cut staff -– 7% -- hasn’t budged year over year.

Seven in 10 firms either intend to keep their staff at the same size or are unsure of their hiring and layoff plans, according to CareerBuilder. Slightly more employers in the western part of the country will recruit new workers than in other U.S. regions –- but more companies there also plan to downsize their staff. 

And employees jumped ship at 34% of companies this year, with many complaining of low salaries and work overload. Next year, 43% of hiring managers are worried that top talent will resign.

That may be why more than half say current workers will get pay raises in 2012 (mostly in the 1% to 5% range), with new employees at 32% of companies getting higher starting salaries.

There’s still hope that hiring will pick up in the latter half of 2012, according to CareerBuilder Chief Executive Matt Ferguson. Some companies are starting to focus on diversity, with 20% targeting Latino, black and female applicants and 44% intending to pick up new bilingual employees.

“Many companies have been operating lean and have already pushed productivity limits,” Ferguson said in a statement.

Small businesses are more optimistic than most –- a promising sign, since they are responsible for the bulk of job creation in the country. More companies with fewer than 250 employees plan to add workers in 2012 than did this year. Fewer said they’ll reduce head count.

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Auto sales expect best year since since 2008, says TrueCar

The auto industry is expected to wrap up a year of slow but steady recovery with the most vehicle sales since 2008.

More than 12.8 million cars and trucks were sold in 2011, the highest volume since the 13.2 million that were sold in 2008, according to price-tracking website TrueCar.com this week.

That’s 1.2 million more than last year but less than the 13.8 million vehicles TrueCar predicts will be sold next year as the economy improves.

In December, new-car sales will be up 8.1% from the same period in 2010 and 24.4% up from November on an unadjusted basis, according to TrueCar. Used-car sales will also be up.

Hyundai and Kia will sell 39.9% more cars in December than in the same month last year while Chrysler will see a 33.8% bump in year-over-year sales, according to TrueCar.

Honda sales this month are expected to be down nearly 16% compared to last year, while Toyota will suffer a 1.7% slip — the only automakers to see a sales slide, TrueCar forecasted.

GM will claim the most market share, with 18.9%, followed by Ford’s 16.5% and Toyota’s 14.1%. Ford, Chevrolet and Toyota will be the top-selling brands.

“This year was absent of a blockbuster sales month but we see this pace of growth as healthy and sustainable in the coming year,” said Jesse Toprak, TrueCar’s vice president of industry trends and insights, in a statement.

Last week, J.D. Power and Associates also predicted strong sales, anticipating 12.7 million sales of light vehicles this year and 13.8 million for 2012, though forecasters warned that the industry would have to overcome the slow summer season to keep selling momentum. 

Edmunds.com also released its estimates last week, saying that 2011 will end with 12.8 million sales — a 10% increase from 2010. Next year, the auto information site expects 13.6 million vehicles to be sold.

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Photo: Customer Frank Barba views 2012 Jeep Grand Cherokee vehicles at Arrigo Dodge-Chrysler-Jeep car dealership in West Palm Beach, Fla. Credit: Mark Elias / Bloomberg

100 to 120 Kmart and Sears stores to close after slow holiday

Sears Holding Corp. said it would close 100 to 120 Kmart and Sears stores nationwide after all-important holiday sales at the chains proved to be disappointing.

Quarterly sales through Christmas were down 5.2% due to steep declines in apparel purchases and layaway sales at Kmart, home appliance performance at Sears and consumer electronics transactions at both. All this even after many of the stores offered special deals and extended operating hours for the holidays.

At this rate, Sears Holding expects its adjusted fourth-quarter earnings, to be announced in late February, to be less than half the $933 million it reported during the same period in 2010. The company’s stock was down nearly 24% to about $35 midway through the trading day.

The store closures will generate up to $170 million in cash, along with extra funds from selling or leasing the real estate, according to Sears Holding. The company has yet to announce the affected locations. The company operates more than 4,000 stores in the U.S. and Canada, including dozens in Southern California.

Sears Holding also said it would abandon its past policy of trying to boost “marginally performing stores” and would instead focus on the cash cows.

The Hoffman Estates, Ill.-based company said it planned to further improve its situation by lowering expenses, reducing and better managing inventory and offering more targeted pricing and promotions.

"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce ongoing expenses, adjust our asset base, and accelerate the transformation of our business model," Chief Executive Lou D'Ambrosio said in a statement.

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Photo: Justin Sullivan / Getty Images