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Archive for the ‘Business’ Category
12 May
WASHINGTON—Federal officials said Wednesday they had charged 107 people across the country in recent days for allegedly running a string of unrelated Medicare fraud schemes involving a total of $452 million in false claims.
Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius said that charges were being brought against defendants in seven cities, including doctors and nurses, for seeking to defraud the federal health program for the elderly and disabled. At least 83 of the defendants were arrested Wednesday morning, officials said.
Among those arrested were seven people in Baton Rouge, La., who were accused of recruiting elderly, mentally ill and drug-addicted patients from nursing homes and homeless shelters. The suspects allegedly signed up the recruits for mental-health services billed at $225 million over six years that never were given or were medically inappropriate, according to officials.
Other suspects were arrested in Miami, Los Angeles, Houston, Detroit, Chicago and Tampa, Fla. The various schemes aren’t alleged to be directly connected, and officials didn’t know how much of the $452 million in false claims submitted by the defendants had been paid to them.
“These indictments remind us that Medicare is an attractive target for criminals, but it should also remind those criminals that they risk prosecution and prison time every time they submit a false claim,” said Lanny Breuer, head of the Justice Department’s criminal division.
Ms. Sebelius said that, as a result of the latest arrests, the department had blocked payments Wednesday to 52 health-care providers suspected of being linked to the fraud rings.
The departments of Justice and Health and Human Services have stepped up their efforts to combat Medicare fraud in recent years, and say they are trying to shift their focus to stopping the government from paying false claims rather than trying to recover the money later.
A group of three Democratic and three Republican senators said Wednesday they were seeking ideas from health-care providers about new ways to prevent fraud in government-run health programs.
Write to Louise Radnofsky at louise.radnofsky@wsj.com
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11 May
Thu Oct 6, 2011 4:57pm EDT
* Case involves contract dating back to 1998
* Oracle denied engaging in fraud, but agreed to settle
(Adds details of case, Oracle comment)
WASHINGTON Oct 6 (Reuters) – Oracle Corp (ORCL.O) has
agreed to pay $199.5 million plus interest to settle
allegations that the software giant failed to give promised
discounts to the federal government, the U.S. Justice
Department said on Thursday.
The world’s No. 3 software company was also accused of
making false statements about its sales practices and discounts
and failing to meet its contract obligations to provide
complete information about its sales practices.
Additionally, Oracle did not disclose higher discounts
given to other customers and as a result the federal government
paid more for its products than it should have, according to
the Justice Department.
The settlement over false claims allegations is the largest
involving the General Services Administration, which handles
procurement for the federal government.
“Resolutions like this one – the largest GSA false claims
settlement in history – demonstrate our commitment to ensure
taxpayers are not overpaying for the products and services they
receive,” Tony West, head of the Justice Department’s Civil
Division, said in a statement.
Oracle denied any wrongdoing or that it engaged in fraud as
part of the contract, which dates back to 1998, and argued that
many of the witnesses were no longer available or did not
remember the events.
Nevertheless, company spokeswoman Deborah Hellinger said
“Oracle has therefore decided to avoid the distraction and high
cost of litigating this case by settling.”
The settlement represents about 11 percent of the $1.84
billion in net income Oracle had in the quarter that ended Aug.
31.
The case involved a former Oracle employee who became a
whistleblower, Paul Frascella, and he will receive $40 million
as his share, according to the Justice Department.
Oracle shares closed up 56 cents, or 1.9 percent, at $30.07
in regular trading on the New York Stock Exchange.
(Reporting by Jeremy Pelofsky in Washington and Jim Finkle in
Boston, editing by Carol Bishopric, Gary Hill)
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11 May
A surprise proposal in Congress to drum up tax revenue from inherited IRAs is raising eyebrows—and making some financial advisers nervous.
A Senate Finance Committee proposal floated this past week as part of a highway-funding bill would give heirs five years to empty inherited individual retirement accounts or 401(k)s, which would typically trigger income-tax payments. The rule change could raise some $4.6 billion in income taxes over the next decade, according to a statement by Sen. Max Baucus (D., Mont.), chairman of the Senate Finance Committee.
“IRAs are intended for retirement,” Sen. Baucus said at a committee hearing on Tuesday. “They are being used by some taxpayers to give tax-free benefits to second, third, maybe even fourth generations.”
Today, if you inherit an IRA or 401(k), you can stretch withdrawals across your life expectancy, meaning the assets could continue to increase in value, tax-deferred, for decades while you withdraw a relatively small portion each year. Income tax is due on distributions unless the inherited account is a Roth IRA.
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The strategy is especially beneficial to younger heirs. A 10-year-old grandchild, for example, could spread out those withdrawals—and any taxes—for almost 73 years, according to an Internal Revenue Service life-expectancy table.
The proposed Senate measure would apply to accounts whose owners die after 2012. It exempts several types of heirs, including children with special needs, spouses and beneficiaries who are within 10 years of the original account-holder’s age.
The proposal isn’t in the House version of the bill, and Sen. Baucus has said he is willing to look for other revenue sources. But even if inherited IRAs don’t get clipped now, it could happen down the road. “Perhaps this is a provision that can be taken up in tax reform,” Sen. Baucus told the committee.
“Congress sees gold in these IRAs, and they’re looking to corral some of that money,” says Ed Slott, an IRA consultant in Rockville Centre, N.Y.
A handful of accountants and lawyers who deal regularly with inherited IRAs say it makes sense to simplify distributions. But they also worry that a five-year deadline could dump big distributions on some heirs too fast, bumping them into higher tax brackets or allowing them to blow through an inheritance.
Another problem with the shorter payout: Once the assets are out of the IRA, they are no longer sheltered from creditors in bankruptcy, says Seymour Goldberg, a lawyer and CPA in Woodbury, N.Y. If the five-year deadline is enacted, Mr. Goldberg says, he would advise setting up trusts to manage IRA proceeds for such heirs, despite steep administration costs. His firm, for example, charges at least $3,500 to set up such a trust.
The proposal could have unintended consequences. The short-term tax gain could backfire, Mr. Slott says, if it slows the rate of conversions to Roth IRAs. He says he has seen retirees in their 60s and 70s convert traditional IRAs to Roths and pay income tax on tax-deferred holdings in order to secure future tax advantages for their grandchildren.
If Congress does wind up shrinking the “stretch,” there are still a number of ways to transfer money to your children, though they are more complicated and have costs, Mr. Slott says:
- Withdraw the IRA assets you don’t think you will need, pay the tax and buy life insurance for them. You could use the policy to fund a trust on their behalf to remove the assets from your estate.
- Leave your IRA to a charitable remainder trust that pays your beneficiaries and still gives you a tax deduction.
- Name your spouse, rather than your children or grandchildren, as your IRA beneficiary to prolong the withdrawal period.
At the moment, it is good to be aware that Congress has IRAs on its radar, “but there’s no need to do anything now because this might become law,” says Barry Picker, a CPA and certified financial planner in Brooklyn, N.Y. “We’ll have to deal with it later, client by client.”
Write to Kelly Greene at kelly.greene@wsj.com
A version of this article appeared February 11, 2012, on page B9 in some U.S. editions of The Wall Street Journal, with the headline: Congress Eyes New Rules For Inherited IRAs.
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11 May
Wed May 9, 2012 8:40pm EDT
Singapore index futures fell 0.2 percent early on
Thursday, signaling a lacklustre start for the Straits Times
Index as weak corporate earnings from heavyweights like
Singapore Airlines looked set to weigh.
Asian shares were also down as sentiment took a hit from
mounting worries about the health of Spanish banks and deepening
political chaos in Greece that put the country at risk of
insolvency and an exit from the euro.
0836 (0036 GMT)
(Reporting by Charmian Kok in Singapore;
charmian.kok@thomsonreuters.com)
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10 May
Dubai : The new wave of television models hitting local stores will pack in a lot more features and apps in their ever-thinning forms. As if that is not enough, their retail prices should continue to slide further.
This would make it more compelling for buyers looking to upgrade their television sets ahead of the Euro Cup and the London Olympic Games.
"Sixty per cent of these buyers are looking forward to watching the Olympics in 3D," said D.Y. Kim, president of LG Gulf.
"We have been facing new industry standards with consumers becoming more demanding."
Article continues below
Prices of LED TVs and even those with 3D features could drop through the year. Plasma TV shipments will witness a decline while those of LCDs are expected to record a slight rise to the Middle East and Africa markets.
Despite manufacturers sounding optimistic, IHS iSuppli projects total shipments this year to be between 11.5 million and 11.8 million units — against 11.8 million units last year — due to global economic concerns.
In 2011, the market grew 37.2 per cent, fuelled by strong demand for LCD TVs.
Demand for 3D TVs is gradual in its build-up and made up only 10 per cent of the overall shipments last year. But things should change.
"In conjunction with the increasing popularity and maturity of optic-fibre networking, as well as video-on-demand and online movie rental, smart TV was the star among all TV technologies last year," said Sweta Dash, senior director for LCD Research, IHS iSuppli.
LG is anticipating a 25 to 30 per cent increase in smart TV sales this year, while these were around 30 per cent for Samsung’s regional operations.
"3D momentum was quite low in the UAE; however, more people are now interested in purchasing a 3D TV," said Kim.
"The market has been receptive to new technology and we plan to further attract consumers towards 3D TV with the launch of new product features and applications."
ADDING UP NICELY
TV numbers for Middle East and Africa:
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10 May
Bad news is good news, it’s often said in financial markets. But that adage applies mainly if the news is bad enough. Only developments dire enough to elicit an effective response by monetary or fiscal policy makers can be counted as good news for bulls.
April’s employment data, while assuredly worse than expected, failed to come up to the catastrophic standards that would impel the Federal Reserve to institute further monetary stimulus measures — at least not yet. With the U.S. economy merely limping along and the omnipresent risks posed by the European debt crisis, exacerbated by elections in France and Greece over the weekend, investors fled risk assets such as stocks and took refuge in government securities that provide vanishingly low yields.
U.S. Treasuries rallied Friday on news of an anemic 115,000 increase in nonfarm payrolls for April, about two-thirds of the consensus gain forecast by economists, extending the decline of the past month and a half. While equities slid sharply, the 10-year note yield dropped to 1.88%, about 50 basis points, or a half percentage point, below its March peak. Yields had risen sharply then on sentiment the Fed not only would be averse to further stimulus, but might even back away from its stated intent of maintaining its key federal-funds rate target at 0-0.25% through late 2014. That increase in yields effectively has been unwound in the wake of the generally lackluster economic data released since then.
Delving into the jobs report, the weaker-than-expected April payroll gain was offset by revisions that lifted the tally by 53,000. In addition, the unemployment rate actually dipped by 0.1 of a percentage point, to 8.1%, which no informed observer would be deluded into thinking was an indication of an improving labor market. The jobless rate, which is derived by a survey of households separate from the polling of business establishments that provides the payroll numbers, fell because of a 0.2% shrinkage in the labor force. The household survey found fewer people holding down jobs last month (the numerator in the unemployment rate). But because the labor force (the denominator) shrank owing to dropouts among the ranks of job seekers, the jobless rate dipped.
What more can the Fed can do to put folks on payrolls at this point is unclear given interest rates already at historic lows. Meanwhile, on the fiscal front, governments at all levels have been shedding workers steadily while state and local governments face ongoing budget pressures when most begin new fiscal years July 1. Then there’s the widely advertised federal fiscal cliff next Jan. 1, when the Bush tax cuts are due to expire and spending cuts take effect that will slice several percentage points from 2013 gross domestic product — unless Congress acts.
GIVEN THIS MISERABLE STATE OF AFFAIRS, investors are accepting yields that are well below the Fed’s 2% stated inflation target. Not only are real yields negative on the 10-year Treasury, but the five-year note yields just 0.78% and the two-year note yields 0.26%. Meanwhile, the 30-year bond yields just 3.07%.
This isn’t just an American phenomenon. German 10-year bund yields hit a record low of 1.58% Friday ahead of the balloting in France and Greece. And to show what happens in the wake of the bursting of a credit bubble, 10-year Japanese government bonds yield 0.89%.
The U.S. Treasury market is a testament to how lousy things are — and the lack of available policy responses. Nobody buys Treasuries for yield; they buy them in spite of it. Think of them as parking places for your wealth. New Yorkers are resigned to paying 50 bucks or more to park for an evening in Manhattan to make sure their car isn’t towed away or worse. Even if it’s costly in real terms, investors know they’ll get their money back in Treasuries.
Comments? E-mail: randall.forsyth@barrons.com
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10 May
Don Yacktman defies those who say stock picking is a fool’s game.
His two main funds, the Yacktman Focused Fund (ticker: YAFFX) and the Yacktman Fund (YACKX), were the leading performers among large-cap value funds over the past decade, with roughly 11% annualized returns that handily outpaced the Standard & Poor’s 500 index.
Morningstar grants each fund a five-star rating, though Focused Fund returns have inched ahead because it can own more concentrated stock positions.
Yacktman, who is based in Austin, Texas, has a simple philosophy for producing good returns. Look for value-priced ugly ducklings with solid cash flow, and …
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7 May
NEW YORK (CNNMoney) — The dollar strengthened against the Japanese yen Thursday ahead of a conference call of G-7 finance ministers that might be the first step toward intervention by Japanese authorities in currency markets.
The call comes after twin natural disasters pushed the yen to a record high against the dollar, and fears over the country’s unfolding nuclear crisis continue to spook investors.
On Wednesday, the dollar fell as low as 76.54 against the yen in late trading, dipping under the previous all-time low of 79.75 set in April 1995. By Thursday afternoon, the dollar had stabilized around 79 versus the yen.
Reports published in advance of the conference call speculated that finance ministers would voice a measure of support for Japanese efforts to weaken the yen.
For an economy facing a tough road ahead, a weaker currency would be a good thing. A stronger home currency will make Japanese goods more expensive in overseas markets, to the detriment of Japan’s manufacturing industry.
Under normal circumstances, intervention would be frowned on by other central bankers, but because of the scale of the disaster, Japanese authorities might be given a free pass by their counterparts.
Despite the nation’s turmoil in recent days, the yen has long been a haven for risk-averse investors.
In the coming months, Japanese corporations are expected to repatriate vast amounts of capital. Those funds are currently tied up in foreign markets but will be needed to facilitate rebuilding. That phenomenon would act to strengthen the currency further.
At this point, most analysts see global risk as the dominating factor for the yen’s rise. In addition to the natural disasters in Japan, Portugal’s credit rating was downgraded on Wednesday. And violence in the Middle East and North Africa continue.
All that uncertainty is sending investors scurrying for cover, moving from high-risk assets into cash and bonds.
If Japan is able to arrest the yen’s appreciation, it might allow the country to turn its attention to other matters: calming equity markets, bolstering government bonds and starting the rebuilding process. 
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6 May
DUBLIN (Reuters) – Irish airline Aer Lingus (AERL.I) offered its first dividend in more than five years as a public company on Friday following a return to profit, disappointing some shareholders who had hoped for a bigger payout.
Aer Lingus, which has not made any form of distribution to shareholders since its stock market listing in 2006, said on Friday it intends to declare an ordinary dividend of 3 cents per share, to be paid in July.
This will make a total payout of approximately 15.9 million euros ($21 million) this year.
However the airline, in which Abu Dahabi’s Etihad Airways bought a small stake this week, backed away from boosting the payout with a special dividend like those promised by rivals Ryanair (RYA.I) and easyJet (EZJ.L).
The chief financial officer of Ryanair, which is the largest shareholder in Aer Lingus, welcomed the dividend, but described the payout as “paltry,” saying 50 million euros would be more appropriate considering its 1 billion euro gross cash pile.
“If it was Christmas I’d be calling you Scrooge,” said Ryanair’s Howard Millar, speaking at Aer Lingus’ annual general meeting on Friday.
British low-cost airline easyJet said in November it would make its first dividend a bumper payout, paying a special dividend of 34.9 pence on top of an ordinary dividend of 10.5 pence, making a total payout of 195 million pounds.
Ryanair, which in 2010 paid its first dividend after listing 13 years earlier, and has said it will likely approve a substantial dividend this year.
Aer Lingus said it expects to pay a final dividend of 3 cents per share in each of the next two years, subject to the group’s financial position being maintained.
“The board believes that this dividend represents a reasonable proportion of profitability and will not be detrimental to Aer Lingus’ financial strength,” the company said.
Analysts said shareholders may be disappointed, but uncertainty surrounding the airline could be the reason for its conservative payout.
“Ryanair and easyJet set a precedent that there might be some sort of special dividends here. There will probably be a little bit of disappointment that there isn’t,” Davy’s analyst Stephen Furlong told said.
“I’m assuming they adopted a more prudent approach,” he said, noting the volatile operating environment for airlines as well as uncertainty surrounding the group’s pension deficit and ownership.
Etihad Airways bought a 3 percent stake in the Irish airline on Tuesday, positioning itself as a potential buyer of the indebted Irish government’s 25 percent stake in Aer Lingus which it plans to sell as part of its international bailout.
However analysts said Etihad would likely want to resolve uncertainty over whether Aer Lingus may eventually have to contribute to a pension deficit that rose to 700 million euros at the end of 2011.
Shares in Aer Lingus were down 1.1 percent at 1511 GMT, outperforming the wider market .ISEQ which was down 2.6 percent.
($1=0.7603 euros)
(Editing by Erica Billingham)
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6 May
Story By: by Mark Memmott
A sign earlier this month in New York City’s Queens borough.
The nation’s jobless rate edged down to 8.1 percent in April from 8.2 percent in March, but just 115,000 jobs were added to private and public payrolls, the Bureau of Labor Statistics reports.
The job growth was well below expectations and has raised new questions about the strength of the U.S. economy.
We’ll add more to this post as we read through the report and gather reactions and analysis. So be sure to hit your “refresh” button to get our latest updates.
Update at 9:55 a.m. ET. White House Says “Economy Is Continuing To Heal”:
“Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression, but much more remains to be done to repair the damage caused by the financial crisis and the deep recession,” writes Alan Kreuger, chairman of the Council of Economic Advisers, on the White House blog.
Update at 9:10 a.m. ET. Early Analyses:
— “U.S. job growth slowed again in April, a fresh sign that the economy could be settling into a sluggish spring.” (The Wall Street Journal)
— The payroll figure is “a disappointing number that will add to fears that the economic recovery has lost some momentum.” (The Financial Times)
— “Employers in the U.S. added fewer workers than forecast in April and the jobless rate unexpectedly declined as people left the labor force, underscoring concern the world’s largest economy may be losing speed.” (Bloomberg News)
Update at 8:55 a.m. ET. Obama’s Policies “Aren’t Working,” Boehner Says:
“Today’s report is more evidence President Obama’s policies aren’t working for families and small businesses, and aren’t creating enough jobs to get our economy back on track,” House Speaker John Boehner, R-Ohio, says in a statement posted by his office. “Where are the jobs?”
Update at 8:50 a.m. ET. Why Did The Jobless Rate Drop?
The economy needs to add more than 115,000 jobs a month to bring down the unemployment rate, economists will tell you. So why did the rate decline in April?
Mostly because the size of the “civilian labor force” shrank by 342,000 people, to 154.4 million. And the labor force “participation rate” edged down to 63.6 percent from 63.8 percent.
So, fewer people were counted as being part of the labor force and a modest about of new jobs were added to payrolls. Those two things combined to shave a tenth of a percentage point off the jobless rate.
And what’s behind the decline in the size of the labor force? This was critical: The number of “discouraged workers” â those who have given up even trying to find work because they don’t think there are jobs to be had â jumped by 103,000, to 968,000 people.
Update at 8:41 a.m. ET. March Job Growth Revised Upward:
Previously, BLS had estimated there were about 120,000 jobs added to public and private payrolls in March. Today, it revised that figure upward â to 154,000.
Update at 8:40 a.m. ET. Job Growth Much Less Than Expected:
Before the report’s release, the consensus forecast among economists was that payrolls likely grew by about 160,000 positions in April, Bloomberg News reports.
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