The next big question about convicted scammer Bernard Madoff, who has been ensconced in his $7 million home for the past several months, is where he’ll likely spend the rest of his life.
Madoff stole billions through his investment firm. On Thursday, the 70-year-old former investment manager pleaded guilty to 11 criminal charges and now faces a sentence of as long as 150 years. He will be sentenced on June 16.
Madoff has managed to avoid jail so far, having posted $10 million bail. Since his December arrest, he has remained with his wife under house arrest in their Manhattan residence.
But he won’t be able to dodge the slammer for much longer.
Madoff may ask the court to be placed in a prison of his choosing and the court can then forward this request to the federal Bureau of Prisons.
The bureau "ultimately decides where the inmate [is incarcerated]," said bureau spokeswoman Felicia Ponce. "We take into consideration judicial recommendations, but they’re not binding."
Despite his white-collar status and non-violent history, Madoff won’t be whiling away his days in some cushy "Club Fed" type of prison.
Ponce said the bureau weighs the "seriousness of the offense, the expected length of incarceration, any history of escapes and violence" as well as the age of the inmate and "security needs." The bureau tries to incarcerate inmates within 500 miles of their homes, she said.
Madoff’s lawyer, Sorkin, wouldn’t provide any details of his client’s preferences. "There are many different facilities in many different places," he said.
No such thing as Club Fed
Ponce, of the Bureau of Prisons, dismissed the Club Fed institution as a "myth."
Ed Bales, managing director of Federal Prison Consultants, which prepares inmates for prison life, said that "Club Fed" facilities used to exist in such places as Nellis Federal Prison Camp near Las Vegas. He said these types of facilities were also located in Florida and Pennsylvania. They provided more freedom and better accommodations to inmates than the typical prisons, but were shut down several years ago.
Larry Levine, another prison consultant and former inmate, wrote on his Web site about the experience of being transferred from Nellis when it shut down in 2005 to a "real" prison near El Paso, Texas, replete with "warring gang members" and other violent offenders.
"The Nellis inmates were shell-shocked into the real world of federal prison," wrote Levine payday loans. "Gone were their cushy days of being in a camp."
White collar crooks: You never know where you’ll go
Nowadays, all types of prisons await white collar offenders. Martha Stewart, the domestic diva convicted of insider trading in 2004, served her five-month sentence at Alderson Federal Prison Camp in West Virginia, a minimum-security women’s prison known as "Camp Cupcake."
At the other end of the spectrum, former Tyco Chief Executive Dennis Kozlowski, who was convicted in a state court and sentenced to up 25 years for grand larceny, was sent to a rougher, medium-security state prison in upstate New York. In a 2007 letter to Fortune, he wrote, "[Prison] is the most difficult of all difficult places to be."
Bales, of Federal Prison Consultants, said his newly convicted clients typically expect the worst, their nightmares of prison rape fueled by television shows like "Oz" and movies like "The Shawshank Redemption." But once they end up behind bars, some inmates are pleasantly surprised to find that it’s not as dangerous as they’d thought, he said.
"They’re scared out of their minds," said Bales. "They think they’re going to get jumped in the shower. But once they hear what they’re really like, they calm down a bit."
Fairton is the fairest
The best possible facility is the so-called prison camp, where there are "no murderers or rapists" and "no bars on the walls," said Bales. But he added that a lengthy sentence such as Madoff’s might bar him from such a desirable facility.
Instead, Madoff might be eligible for a low-security prison, which isn’t as bad as medium-security, but it’s still a prison.
"In low security, you have some violence, you may have some low-level Mafia type figures, you may have some people who have been involved in child porn," he said. "[Madoff] may be facing that type of scenario."
The best possible low-security federal prison where Madoff could conceivably land is in Fairton, N.J., said Bales. That’s the current residence of Sanjay Kumar, former Chief Executive of Computer Associates, serving a 12-year sentence for fraud and obstruction of justice.
"It’s one of the best places to do your time," said Bales. "They send a lot of senators there and attorneys."
Ford Motor Co said on Wednesday that it expected operating savings of $500 million per year from an agreement with the United Auto Workers that will push hourly wage rates into the “ballpark” of foreign-based rivals.
Ford said the agreement would trim its all-in average wages for the 42,000 workers covered under the contract to about $55 per hour this year, while the U.S. operations of foreign-based automakers pay workers on average $48 to $49 per hour.
The agreement with the UAW, which workers ratified earlier in March, allows Ford to suspend some performance and bonus payments, reduce overtime costs and cut a paid holiday, as well as restructure funding of a union retiree healthcare trust.
Joe Hinrichs, Ford’s global head of manufacturing, said the savings from the operating agreement and restructuring of the funding of the trust, a Voluntary Employee Beneficiary Association, was “critical to our future competitiveness guaranteed payday loans.”
The annual savings could exceed $500 million if industry conditions allow Ford to exercise all of the changes in the agreement, Hinrichs said in a conference call with analysts and reporters.
Ford, which posted a record $14.7 billion net loss for 2008, has said it believes it has adequate liquidity to operate through the economic downturn without seeking emergency U.S. government loans.
(Reporting by David Bailey; Editing by Lisa Von Ahn)
Wal-Mart Inc. and Federal Express are using solar heating systems manufactured by Conserval Engineering Inc. Sheraton Hotels selected EnviroTower Inc. for its chemical-free cooling tower technology. Meanwhile, several U.S. utilities are deploying energy-management software from Lixar SRS Inc. All three cleantech ventures are from Toronto.
If "made-in-Ontario" clean technologies are good enough for the above-mentioned customers located outside the province, then why not purchase these same energy-saving, environment-friendly technologies here at home?
That’s the question Céline Bak, a partner with management consultancy Russell-Mitchell Group, believes the Ontario government should be asking as it tries to position the province as a leader in green technology development and deployment.
Bak spearheaded a report released last month that, for the first time, came up with an inventory of clean technology companies in the province. A total of 110 ventures were identified, nearly half of them based in the Greater Toronto Area. They’re mostly small private companies with little, if any, revenues. Many have commercial product and limited sales, but are lacking the capital to support breakout growth.
To its credit, the Ontario government has done a decent job of funding demonstration projects that give some of these companies a chance to showcase their products. Bak says the one-off demonstrations are helpful, but government can play a much more valuable role as procurer of these technologies.
"It’s moving from government as funder of demonstration projects to government as smart procurer," she says.
But Bak goes one step further. She’s proposing that all annual energy savings from the large-scale deployment of these technologies in government buildings, schools, hospitals and other public assets be set aside in an Ontario Clean Technology Commercialization Fund.
The money in such a fund, which could easily expand to hundreds of millions of dollars, could be reinvested through an independent third party in earlier-stage Ontario cleantech companies hungry for venture capital to support product commercialization and growth.
"This proposal is, in effect, a `local savings and loans’ strategy," according to a one-page brief Bak prepared with Kevin Jones at the Ontario Centre for Environmental Technology Advancement instant payday loan. But the two are under no illusion it will be an easy undertaking. "Implementing this proposal would require significant political will."
Got that right. Still, it’s a compelling funding model that deserves serious consideration.
One obvious concern any politician would have relates to the idea of governments picking winners. The public has rightly demanded that procurement be done in an open, transparent manner that promotes competition and seeks the greatest value for every dollar of taxpayers’ money. There’s also the protectionist aspect of such a policy and the possible retaliation from other jurisdictions.
At the same time, there’s a general appreciation that small, innovative companies often don’t have enough capital or sophistication to participate in traditional procurement processes. Indeed, some U.S. jurisdictions have small-business laws that allow a certain amount of procurement from local companies with revenues below, say, $50 million a year. "We’ve been talking about that law in Canada for ages," says Bak.
So, let’s assume it’s a path worth taking. How, then, do we do it?
The first step, argues Bak, is a comprehensive assessment of the clean technology companies in Ontario and an independent validation of what they have to offer. Which ones are unique and have no obvious competitors? In which product categories are more than one Ontario-based company capable of doing the job? The government would also have to identify and prioritize projects to get a clear sense of its needs.
If a local company meets a need and has no obvious competitor, then direct procurement may be justified. If this company has one or more local competitors, then a locally focused competitive tender is required. If no local company meets the need, then a traditional procurement process is used.
"It’s an idea that requires some work," Bak admits.
There’s no denying that using the massive purchasing power of government to support local innovation could go a long way toward putting Ontario cleantech companies on the global map. Likewise, reinvesting the government’s resulting energy savings in early-stage companies is a sensible way to close the loop.
Is it a good idea? Or is it begging for trouble? Please, share your thoughts.
Tyler Hamilton’s Clean Break column appears Mondays. Email him at thamilton@thestar.ca.
NEW YORK — Investors retreated from Wall Street again, driven by worries about the nation’s big banks and General Motors Corp.
Thursday’s slide more than wiped out the previous day’s rally. Short selling — bets that stocks will fall — exacerbated the losses, slashing 281 points from the Dow Jones industrials and sending all the major indexes down more than 4 percent.
The latest torrent of selling came ahead of the February Labor Department report that is likely to show hundreds of thousands of jobs were lost. Reports showing better-than-expected retail sales and factory orders Thursday weren’t enough to stoke investor confidence.
The Dow fell 281.40, or 4.1 percent, to 6,594.44, its lowest close since April 1997.
Broader indicators also tumbled. The S&P 500 index dropped 30.32, or 4.3 percent, to 682.55, its lowest close since September 1996. The Nasdaq composite index fell 54.15, or 4 percent, to 1,299.59.
The Russell 2000 index of smaller companies fell 21.85, or 5.9 percent, to 349.45.
On the New York Stock Exchange, only 235 stocks advanced while 2,887 fell. Consolidated volume came to a heavy 7.28 billion shares compared with 7.51 billion shares traded Wednesday.
Government bond prices rose as investors sought a safe haven. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.81 percent from 2.98 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, slipped to 0.20 percent from 0.25 percent Wednesday.
Stocks fell in every industry, with beleaguered banks posting some of the steepest drops after negative comments from Moody’s Investors Service weighed on the already depressed financial stocks free instant credit reports. Citigroup Inc., still shaky despite receiving billions in government aid, at times sank below $1 and finished down 9.7 percent at $1.02. Bank of America Corp. dropped 42 cents, or 11.7 percent, to $3.17; Wells Fargo & Co. tumbled $1.54, or 15.9 percent, to $8.12; JPMorgan Chase & Co. fell $2.70, or 14 percent, to $16.60.
General Motors, meanwhile, ended with a loss of 15 percent at $1.86. The automaker said in its annual report that auditors raised serious doubt about its ability to continue operating. GM has already received $13.4 billion in federal loans, and is seeking a total of $30 billion from the government. GM dove 34 cents, or 15.5 percent, to $1.86.
General Electric Co. closed down 3 cents at $6.66. Trading in the stock was volatile, but losses were limited as analysts expressed differing views on the health of its finance unit.
Exxon-Mobil Corp. closed at $62.22, down $3.46. The oil giant said it plans to increase spending on capital and exploration projects, even as many rivals scale back operations.
Blockbuster Inc. closed down 2 cents at 45 cents. Fourth-quarter sales climbed 4.4 percent, as increased sales of games and merchandise offset movie-rental declines.
Limited Brands Inc. closed at $6.40, down 62 cents. The operator of Victoria’s Secret reported that sales at stores open at least one year fell 7 percent in February.
WASHINGTON–The deepening recession caused worker productivity to slide by a worse-than-expected amount in the fourth quarter while wage pressures shot up at the fastest clip in two years.
The Labor Department said Thursday that productivity, the amount of output per hour of work, fell at an annual rate of 0.4 per cent in the October-December period. At the same time, unit labor costs were surging by 5.7 per ent.
While the combination of falling productivity and rising wage pressures would normally raise alarm bells about inflation, the threat of any resurgence of price pressures is seen as remote given the severity of the current recession.
The 0.4 per cent decline in productivity was far weaker than the 1.5 per cent increase that economists had expected. It represented a revision from the government's initial estimate a month ago that productivity in the fourth quarter was rising at an annual rate of 3.2 per cent.
The sharp reduction reflected the fact that the overall economy was contracting by a much larger amount in the fourth quarter than the government initially thought. The Commerce Department reported last week that the gross domestic product, the economy's overall output of goods and services, fell at a 6.2 per cent pace in the fourth quarter, the worst showing in a quarter century and much worse than the 3.8 per cent drop originally estimated.
Since productivity is the amount of output per hour of work, the big decrease in output translated into a sharp fall in productivity. And even with the massive layoffs that have been occurring in recent months, output was falling at a faster pace than companies were slashing their payrolls. That meant labour costs per unit of output showed an increase.
The 5.7 per cent rise in unit labor costs was the largest quarterly gain since a 9.6 per cent surge in the final three months of 2006 totally free credit score.
For all of 2008, unit labor costs rose by a much more modest 0.9 per cent, down from a gain of 2.7 per cent in 2007. Economists said the decrease in the annual figure was more representative of the trend in labor pressures currently.
They do not expect wage pressures to represent an inflation threat for some time given the current environment in which workers are more worried about keeping their jobs than about demanding higher wages.
For the entire year, productivity rose by 2.8 per cent, double the 1.4 per cent rise in 2007.
Productivity is considered the key ingredient needed for rising living standards because it allows businesses to pay their employees higher wages financed by their workers' increased output. That means companies can increase employee compensation without increasing the prices of their products which could boost inflation.
The severe recession, which has triggered massive layoffs, is keeping a lid on wage pressures and economists believe that will not change until a sustained rebound has started, something they don't see occurring for many more months.
Just this week, more companies announced they were cutting jobs. United States Steel Corp., the largest U.S.-based steel maker, said it was temporarily idling some operations in Canada, a move that will affect 1,500 workers, due to slumping demand for steel.
Tyco Electronics Ltd., which makes electronic components, and Diageo PLC, the world's largest producer of alcoholic drinks, also announced further layoffs.
In its latest survey of economic conditions, the Fed reported Wednesday the economy deteriorated further in the last two months and that business people expect no improvement until late this year at the earliest.
Four men at the Cargill Meat Solutions plant in Dodge City have been indicted on charges of aggravated identity theft and using false documents to gain employment in the United States.
The indictments claim all four men were citizens of Mexico, unlawfully working in the United States and had stolen Social Security numbers to get their jobs, according to a release from Acting U.S. Attorney Marietta Parker’s office.
According to court documents, the indictments of the four men consist of:
• Alejandro Cruz-Lopez possessed a Cargill Meat Solutions employee identification card with his picture and another person’s name, a Blue
Cross/Blue Shield card, two Delta Dental insurance cards, a UFCW union identification card with his picture and another person’s Social Security number, three Cargill pay stubs with a false name on them, and two Kansas identification cards with photos and a false name.
• Ramiro Santos-Carreto possessed a Cargill Meat Solutions identification card with his picture and another person’s name, a Cargill health insurance card, two Delta Dental insurance cards, a UFCW union identification card with his picture and another person’s Social Security number, an Arkansas identification card with his picture and another person’s name, and a Cargill Treatment and Work Restriction Record with a false name on it used car loans.
• Rogelio Gomez-Bernardino possessed a Cargill Meat Solutions employee identification card with his picture and another person’s name, three Cargill health insurance cards, two Blue Cross/Blue Shield cards, two Delta Dental insurance cards, a UFCW union identification card with his picture and another person’s Social Security number, and a California identification card with his photo and another person’s name.
• Leonardo E. Leon-Flores possessed a Cargill Meat Solutions employee identification with his photo and another person’s name on it, two
Cargill health insurance cards, a Blue Cross/Blue Shield card, two Delta Dental insurance cards, and a Kansas identification cared with his picture and a false name.
In each case, agents with the U.S. Immigration and Customs Enforcement office obtained employment forms containing Social Security numbers belonging to someone else.
If convicted, the defendants face a maximum penalty of 10 years in federal prison without parole and a fine of up $250,000 for possessing the false documents and a mandatory two-year sentence (running consecutive to other sentences) and up to $250,000 in fines on the aggravated identity theft.
Olin Corp. said Monday that it is lifting the force majeure declared Dec. 31 for product shipments from its Henderson, Nev.; Santa Fe Springs, Calif.; and Tracy, Calif.; facilities.
A force majeure refers to a clause in contracts that frees parties from liability when an extraordinary event occurs.
Olin said it expects to resume normal deliveries of chlorine, caustic soda, hydrochloric acid, hydrogen and bleach from those facilities immediately.
The force majeure was declared due to an unexpected equipment failure, the company said auto loans.
Clayton-based Olin Corp. (NYSE: OLN) is a manufacturer concentrated in two business segments: Chlor Alkali Products and Winchester. Chlor Alkali Products manufactures chlorine and caustic soda, sodium hydrosulfite, hydrochloric acid, hydrogen, sodium chlorate, potassium hydroxide and bleach products. Winchester products include sporting ammunition, reloading components, small caliber military ammunition and components and industrial cartridges.
OTTAWA – The Bank of Canada looks set to deliver a hefty half-point interest rate cut tomorrow that should boost the country’s dollar and bonds, but it may also signal its 15-month rate-cutting campaign is near an end.
And a report today is expected to show the economy suffered its biggest quarterly contraction since 1991 in the fourth quarter of last year. The median forecast in a Reuters poll of 16 analysts was for the economy to shrink 3.6 per cent on an annualized basis.
The rate cut is seen as a slam dunk by markets, with two-thirds of primary securities dealers forecasting a half-point easing that would take the bank’s main interest rate to a record low of 0.5 per cent.
Regardless of the size of the cut, most dealers see it as the final rate change by the bank in 2009.
"The bank in their statements and comments has not seemed overly geared to cut further and don’t seem to be drinking the same pessimistic Kool-Aid that everybody else is drinking at this point," said Doug Porter, deputy chief economist at BMO Capital Markets, who expects a quarter-point cut instant payday loans.
While rate cuts generally weaken a country’s currency, some market players said in this case a cut would be viewed as a positive because it would help get the economy back on track.
"The more aggressive the bank is the better it is going to be for the Canadian dollar," said Steve Butler, director of foreign exchange trading at Scotia Capital.
Mark Chandler, fixed income strategist at RBC Capital Markets, said that with the Bank of Canada’s key interest rate heading closer to zero, bond prices stand to gain.
"That suggests positive sentiment at the front end but limited positive sentiment without an open admission that there has been a more significant deterioration in the economic outlook."
Gas prices are soaring again, with local prices at the pump jumping 5 cents overnight in the Dayton area. In Ohio, all major cities saw gas prices climb Friday, with Cincinnati and Toledo seeing the largest increases with jumps of 6 cents per gallon each.
The statewide average price of gas was $1.83 on Friday, up from $1.80 a month ago, according to the AAA daily fuel gauge report.
Oil prices are declining, however, after a trending upward recently. Crude oil closed at $44.76 Friday, down $1.10, according to Yahoo! Finance. However, the closing price Friday was still well above recent levels in the upper $30s.
In Dayton, the average price of regular gas was $1.82, up 5 cents overnight, and up 4 cents from a month ago. However, that is tied with Toledo for the lowest price in the state.
A year ago, the price of regular gas in the Dayton area was $3 low interest personal loan.13 per gallon.
Premium gas prices also rose overnight statewide and locally as well. A gallon of premium gas in the Dayton area averages $2.02, up 7 cents overnight, but just up a penny from last month. The average local price of premium gas one year ago in Dayton was $3.46 per gallon.
Diesel prices locally remained the same overnight at $2.16 per gallon, but are down 9 cents from an average price of $2.27 a month ago. One year ago the average price of diesel fuel in Dayton was $3.61 per gallon.
In Ohio, Akron, Canton and Cleveland have the highest average gas price at about $1.84 each. Cincinnati and Columbus both have average prices of $1.83 per gallon.
Nationwide, gas is most expensive in Alaska at $2.51 and cheapest in Missouri at $1.67.
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