U.S. Inquiry of Google on Drug Ads

Federal regulators are investigating Google on suspicion of illegally displaying ads for online pharmacies that are operating outside the law, government officials said Thursday.

Google has set aside $500 million to pay for a potential settlement, according to a Securities and Exchange Commission filing the company made on Tuesday. It said the money was for the “potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers,” but gave no details.

The United States attorney’s office in Rhode Island is leading the investigation into pharmaceutical advertising on the Web search engine and the Food and Drug Administration and Justice Department are also involved, people briefed on the investigation said.

Google and the Justice Department declined to comment. An F.D.A. spokeswoman confirmed there was a continuing investigation. Jim Martin, a spokesman for the United States attorney’s office in Rhode Island, said, “We neither confirm or deny the existence of an investigation.”?

Web sites are liable for advertising that breaks federal criminal law, according to Eric Goldman, director of the High Tech Law Institute at Santa Clara University.

Google has been trying to clean up ads from so-called rogue pharmacies, which sell counterfeit drugs or do not require valid prescriptions. In the last year, Google has made significant changes to its policies for accepting pharmaceutical ads, most recently in January. But Michael Zwibelman, litigation counsel for Google, has described it as “an ongoing, escalating cat-and-mouse game.”

In February 2010, Google changed its AdWords policy to accept ads only from pharmacies certified by the National Association Boards of Pharmacy in the United States or the Canadian International Pharmacy Association. Previously, Google had accepted ads verified by a company called PharmacyChecker.com.

In September 2010, Google filed a civil lawsuit in federal court against pharmaceutical advertisers that it believed had broken its advertising rules.

“Rogue pharmacies are bad for our users, for legitimate online pharmacies and for the entire e-commerce industry — so we are going to keep investing time and money to stop these kinds of harmful practices,” Mr. Zwibelman wrote in a company blog post at the time.

It is unclear why the investigation and penalty are coming now, after Google’s cleanup efforts.

Google said the $500 million charge reduced its net income last quarter by 22 percent, to $1.8 billion from $2.3 billion. “We believe it will not have a material adverse effect on our business,” the company said in the S.E.C. filing.

The investigation is Google’s latest run-in with regulators, who have also been investigating the company on, and in some cases penalizing it for, antitrust issues and privacy violations.

Gabriel Levitt, vice president of PharmacyChecker.com, said that Google’s measures to crack down on rogue pharmacy ads went too far, preventing people from getting drugs they needed.

But critics of online pharmacies say that Google and other Web sites feed the business.

“It’s very hard to police these sites because they change every couple of days,” said Joseph A. Califano Jr., founder of the National Center on Addiction and Substance Abuse at Columbia University. “The only things that keeps them in business are the Googles of the world.”

The focus of the investigation was first reported by The Wall Street Journal on its Web site.

Edward Wyatt and Charlie Savage contributed reporting from Washington.

 

Ex-First Lady of Egypt Is Detained in Inquiry

CAIRO — Egyptian corruption investigators detained Suzanne Mubarak, the wife of the ousted president, Hosni Mubarak, for questioning over allegations that she profited illegally from her position, government officials said on Friday. Hours later, state news agencies said Mrs. Mubarak had been hospitalized for a heart attack, an echo of reports several weeks ago that Mr. Mubarak, 82, had suffered a heart attack under questioning about official corruption.

Before the announcement of her hospitalization, officials had said Mrs. Mubarak, 70, would be held in a Cairo prison.

Mr. Mubarak has remained in detention in a hospital, while the couple’s two sons are in the Tora prison near Cairo, along with a host of other people close to the former president. The detentions are part of a push by Egyptian prosecutors to fulfill demands for a sweeping cleanup after the revolution that threw Mr. Mubarak out of office three months ago.

The Web site of the state-owned newspaper Al Ahram reported that Egypt’s top corruption investigator, Khaled Selim, traveled on Friday to Sharm el Sheikh, where the Mubarak family has a home, to question Mrs. Mubarak.

Like her husband and sons, Mrs. Mubarak was formally detained for 15 days for questioning, but in Egypt that typically amounts to indefinite imprisonment because the detention is routinely renewed, as it has been in the cases of her sons and husband. No charges have been filed against any of the Mubaraks.

Although such detention usually signals the likelihood of serious charges, it is unclear whether prosecutors intend to pursue a case against Mrs. Mubarak or to press her for information about her family’s wealth. She was best known for the work of her charitable organizations, including the National Council for Women and the Suzanne Mubarak Women’s International Peace Movement. She organized conferences about the concerns of women in the region, campaigned against the practice of female genital cutting and helped sponsor the Arab equivalent of “Sesame Street.”

But she also enjoyed the privileges of her position. In cables from the United States Embassy in Egypt that were released by the antisecrecy group WikiLeaks, diplomats described her as one of the most powerful figures in the Mubarak government. The diplomatic cables and reports in Egyptian state media since the revolution have also said that Mrs. Mubarak was considered an important force in propelling her son Gamal’s rise as a successor to his father.

A 2006 cable said that a 274-page report by an opposition group accusing her of corruption had stirred broad public anger. Another cable noted that on a visit to the Sinai she commandeered a bus for her own use that had been bought with money given by the United States Agency for International Development for carrying children to school.

Liam Stack contributed reporting.

 

JPMorgan in Talks to Settle S.E.C. Inquiry Into Securities

JPMorgan’s securities unit has been cooperating with agency officials and is “in advanced discussions with the staff concerning a potential resolution of that investigation,” the bank said in a quarterly financial report filed with the S.E.C. on Friday.

JPMorgan did not specify which collateralized debt obligations were the subject of the S.E.C. talks and said there was no assurance that the settlement would be completed.

The C.D.O. investigation gathered momentum last year when the Goldman Sachs Group agreed to pay $550 million and admitted making a “mistake” in its disclosures about a subprime-linked C.D.O.

Separately, JPMorgan, one of the lenders criticized over improper foreclosures on military families’ homes, won approval of a $56 million settlement of claims that it overcharged service members on their mortgages.

Judge Margaret B. Seymour of United States District Court in Columbia, S.C., found that the accord, which provides $27 million in cash to military personnel overcharged on mortgages as well as other benefits, was a fair resolution of suits over the problem loans.

Service members who suffered from the overcharges think the settlement “is phenomenal,” said Jonathon Rowles, a Marine fighter pilot who sued JPMorgan over the handling of his loan.

“They recognized they made mistakes and they took the steps to fix them and compensate people for their damages,” Mr. Rowles said in an interview after the hearing. “I’m pleased with the way it turned out.”

JPMorgan officials acknowledged earlier this year that one of the bank’s units made errors in handling mortgages covered by the Servicemembers Civil Relief Act. That law was enacted in 1942 to shield deployed military personnel from financial stress.

Bank officials “regret the mistakes our firm made on mortgages for members of the military,” Frank J. Bisignano, a JPMorgan executive who leads the home lending unit, said in an e-mailed statement on Friday.

Under the terms of the settlement, Mr. Rowles and an estimated 6,000 other service personnel whose mortgage accounts were mishandled will split the $27 million, according to court filings. That will provide an average payout of $4,500 per soldier, but recoveries will vary based on the service member’s individual damage claims.

The accord also calls for JPMorgan to cut interest rates on all mortgages held by deployed troops to 4 percent for one year, the filing shows.

The lender has agreed to return houses that were improperly foreclosed upon and not yet sold, and to pay fair market value for those already auctioned off, according to the filing. It also will forgive any remaining mortgage debt of military borrowers who were protected by the law and mistakenly foreclosed upon.

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JPMorgan in Talks to Settle S.E.C. Inquiry Into Securities

JPMorgan’s securities unit has been cooperating with agency officials and is “in advanced discussions with the staff concerning a potential resolution of that investigation,” the bank said in a quarterly financial report filed with the S.E.C. on Friday.

JPMorgan did not specify which collateralized debt obligations were the subject of the S.E.C. talks and said there was no assurance that the settlement would be completed.

The C.D.O. investigation gathered momentum last year when the Goldman Sachs Group agreed to pay $550 million and admitted making a “mistake” in its disclosures about a subprime-linked C.D.O.

Separately, JPMorgan, one of the lenders criticized over improper foreclosures on military families’ homes, won approval of a $56 million settlement of claims that it overcharged service members on their mortgages.

Judge Margaret B. Seymour of United States District Court in Columbia, S.C., found that the accord, which provides $27 million in cash to military personnel overcharged on mortgages as well as other benefits, was a fair resolution of suits over the problem loans.

Service members who suffered from the overcharges think the settlement “is phenomenal,” said Jonathon Rowles, a Marine fighter pilot who sued JPMorgan over the handling of his loan.

“They recognized they made mistakes and they took the steps to fix them and compensate people for their damages,” Mr. Rowles said in an interview after the hearing. “I’m pleased with the way it turned out.”

JPMorgan officials acknowledged earlier this year that one of the bank’s units made errors in handling mortgages covered by the Servicemembers Civil Relief Act. That law was enacted in 1942 to shield deployed military personnel from financial stress.

Bank officials “regret the mistakes our firm made on mortgages for members of the military,” Frank J. Bisignano, a JPMorgan executive who leads the home lending unit, said in an e-mailed statement on Friday.

Under the terms of the settlement, Mr. Rowles and an estimated 6,000 other service personnel whose mortgage accounts were mishandled will split the $27 million, according to court filings. That will provide an average payout of $4,500 per soldier, but recoveries will vary based on the service member’s individual damage claims.

The accord also calls for JPMorgan to cut interest rates on all mortgages held by deployed troops to 4 percent for one year, the filing shows.

The lender has agreed to return houses that were improperly foreclosed upon and not yet sold, and to pay fair market value for those already auctioned off, according to the filing. It also will forgive any remaining mortgage debt of military borrowers who were protected by the law and mistakenly foreclosed upon.

View the original article here

German Terrorism Arrests Disrupt Qaeda Inquiry

 

The moment came after they overheard a conversation in which the men exulted about the bombing in Morocco on Thursday that killed 16 people. The suspects had begun building a bomb; one of them complained about the smell as they mixed chemicals in a kitchen. They also mused about where they might kill the most people, officials said. A crowded bus stop, perhaps?

At that point, the investigators reluctantly decided that the danger of an attack outweighed the risk that arresting the men would alert other suspects and hamper the broader investigation. Shortly after sunrise on Friday, they seized two suspects in Düsseldorf, catching one as he walked to his car and another in his apartment, where the suspect briefly brandished a knife before surrendering.

A third man was arrested in Bochum, where he offered no resistance, German officials said on Saturday.

“It was completely clear to me we had to act,” said J?rg Ziercke, president of the Federal Criminal Police Office.

Mr. Ziercke and other officials laid out details of the investigation on Saturday, in a news conference near the federal court where the three men were brought before a judge.

The officials described a vast operation involving an intensive surveillance effort by more than 100 people and including assistance from American intelligence sources and the Moroccan authorities.

The German officials said they believed that the aborted attack was part of a strategy that Al Qaeda had been following to encourage homegrown terrorist attacks, now that the group had lost much of its ability to direct attacks from abroad.

Mr. Ziercke described the plot as a kind of hybrid terrorism that had elements of central control but left would-be attackers largely to their own devices.

One of the suspects, a citizen of Morocco who had lived for a decade in Germany, was recruited to attend a Qaeda training camp last year near the Afghan-Pakistani border, officials said. The suspect, identified only as Abdeladim El-K., 29, received weapons and explosives training and orders from a high-ranking Qaeda official, whom the authorities did not identify, to carry out an attack in Germany.

After re-entering Germany illegally in May 2010, Mr. Ziercke and other officials said, the suspect recruited two longtime acquaintances: men identified as Jamil S., 31, who has joint German and Moroccan citizenship; and Amid C., 19, who is a citizen of Germany and Iran.

While two of the suspects had Moroccan roots, the authorities said they had not found any evidence of a direct connection between the German plot and the bombing in Marrakesh. However, the men did appear to have been inspired by the attack, the police said.

The authorities said all three of the suspects worked full time on preparing for an attack, trying to conceal their activities by communicating in code and acquiring chemicals such as hydrogen peroxide and acetone that can be used in bomb production. They downloaded bomb-making recipes from the Internet and tried to extract chemicals for a detonator from a charcoal lighter.

The suspects also investigated security measures at possible targets like public buildings, airports and train stations, the authorities said. They stayed away from mosques and other places where they might attract attention.

The German officials who spoke on Saturday did not confirm news reports that the suspects planned to stage an attack during the Eurovision Song Contest, an international music competition that will draw large crowds to Düsseldorf from May 10 to 14.

While taking note of the event, officials said the suspects had not yet settled on a target.

“They wanted to create an explosion in a place with big crowds of people,” said Rainer Griesbaum, head of the antiterrorism unit at the federal prosecutor’s office in Karlsruhe.

Mr. Griesbaum and Mr. Ziercke said there was at least one other suspect tied to the plot who had not been arrested, and that there might be dozens of others in Germany providing financial and logistical support to terrorist groups. The officials said they knew of about 200 Germans who had received training at Qaeda camps.

Mr. Griesbaum said Al Qaeda remained determined to retaliate against Germany for sending troops to Afghanistan.

“We have prevented this danger, but only this danger,” Mr. Griesbaum said.