Business owner taken into custody
The owner of a Northeast Philadelphia check cashing business was among seven people taken into custody Thursday by federal law enforcement officials for alleged violations of anti-money-laundering provisions under the Bank Secrecy Act, U.S. Immigration and Customs Enforcement said. Indictments were filed Tuesday in New York and California. The defendants allegedly failed to follow reporting and anti-money-laundering requirements for transactions totaling more than $50 million. The Philadelphia operation, Bargain Island, on Bustleton Avenue, is owned by Feasterville resident George Gonchar, 51. From October 2009 through October 2010, Gonchar allegedly cashed $5.8 million in checks delivered by couriers from Brooklyn without properly filling out cash transaction records, as required by federal law. — Harold Brubaker
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AIG, Bear Stearns bailout funds repaid
The Federal Reserve Bank of New York that loans it set up to help facilitate the bailouts of American International Group Inc., and now defunct investment bank Bear Stearns, during the financial crisis have been fully repaid with interest. In total, $53.12 billion in loans was repaid. The original amount of the loan to a portfolio called Maiden Lane III L.L.C., created to buy the securities, repay debt and provide capital for some of AIG's operations, was $24.3 billion. And $28.82 billion more in loans, set up through a portfolio named Maiden Lane L.L.C., which helped facilitate Bear Stearns' takeover by JPMorgan Chase & Co. was also repaid. The loans were repaid through asset sales. The government stepped in with a $182.5 billion package to rescue AIG from collapse in the depths of the financial crisis in 2008. It was the largest bailout in history. The Fed also still owns some investments it acquired from AIG, which it plans to sell over time. — AP
Mortgage rates up slightly
Average rates on U.S. fixed mortgages rose this week, the first increase in seven weeks, according to a survey by mortgage buyer Freddie Mac. The average rate on the 30-year mortgage increased to 3.71 percent. That's up from 3.67 percent last week, the lowest since long-term mortgages began in the 1950s. The average rate on the 15-year mortgage rose to 2.98 percent. That's up from 2.94 percent last week, also a record low. — AP
More file for unemployment
More Americans sought unemployment aid last week, suggesting that hiring remains sluggish. The Labor Department said Thursday that weekly unemployment benefit applications rose 6,000 to a seasonally adjusted 386,000, an increase from an upwardly revised 380,000 the previous week. The four-week average, a less volatile measure, rose for the third straight week to 382,000. That's the highest in six weeks. Weekly applications are a measure of the pace of layoffs. When they drop below 375,000, it typically suggests hiring is strong enough to reduce the unemployment rate. — AP
Talks to focus on ‘too big to fail'
Global financial regulators, after reaching a consensus last year on tougher capital rules to govern banks that would roil the world economy if they collapsed, will try to hammer out a deal next week on controls for lenders with the potential to bring down national economies. The Basel Committee on Banking Supervision plans to publish draft rules for so-called systemic lenders that aren't covered by last year's plans that require global banks deemed too big to fail to hold additional capital of as much as 2.5 percent of their risk-weighted assets, according to two people with knowledge of the discussions. The Financial Stability Board, which brings together regulators, finance ministry officials and central bankers from the Group of 20 nations, published a provisional list of 29 globally important banks that may face these surcharges, including Deutsche Bank AG, BNP Paribas SA and Goldman Sachs Group Inc. It also said that these globally important lenders should be subject to tougher supervision. — Bloomberg News
Nokia to cut 10,000 jobs
Nokia Corp. said it would slash 10,000 jobs and close plants. More than a third of the global job cuts, to be completed by the end of 2013, will be in Finland. Nokia said heavy competition would continue to hit its smartphone sector, but to a "somewhat greater extent than previously expected." It said the downturn would continue in the third quarter. Nokia faces fierce competition from Apple Inc.'s iPhone and phone makers using Google Inc.'s Android. It is also being squeezed in the low-end by Asian manufacturers making cheaper phones. — AP
Current-account deficit widens
The U.S. current-account trade deficit grew this winter to its widest imbalance in three years. A big increase in imports of oil, cars and machinery and a drop in U.S. earnings on overseas investments drove the increase. The deficit in the current account jumped to $137.3 billion in the January-March quarter. That's up from $118.7 billion in the final three months of last year, the Commerce Department reported Thursday. The current account is the broadest measure of trade. It tracks the sale of merchandise and services between nations as well as investment flows. — AP
Consumer prices drop in May
A measure of U.S. consumer prices fell in May by the most since December 2008, pulled down by a plunge in gas prices. Excluding volatile food and energy costs, prices rose only modestly. The Labor Department said Thursday that the consumer price index dropped 0.3 percent. Gas prices sank 6.8 percent, also the most since December 2008. "Core" prices, which exclude food and energy, rose 0.2 percent for the third straight month. — AP
