Archive for February, 2011

US charges Swiss bankers for aiding tax evasion

Wednesday, February 23rd, 2011 | Finance News


WASHINGTON (AFP) – The US indicted four Credit Suisse bankers Wednesday on charges of helping US taxpayers hide money in secret Swiss accounts to avoid US taxes.

The four bankers and unnamed co-conspirators were accused of offering US customers the chance to open accounts in Switzerland at the understanding that the money would be hidden from US tax authorities.

It said that as of 2008, the bank hosted thousands of such accounts holding up to $3 billion in assets.

"The conspiracy dates back to 1953 and involved two generations of US tax evaders, including US customers who inherited secret accounts at the international bank," the justice department said in a statement.

Bank officials "knew and should have known that they were aiding and abetting US customers in evading their US income taxes," the indictment said.

It named the three Swiss nationals Emanuel Agustino, Michele Bergantino and Roger Schaerer, and Italian Marco Parenti Adami.

Agustino and Bergantino had traveled to the US to market the tax-evasion opportunities at the bank, the indictment said.

Agustino continued to offer such services at two other Swiss banks after he left Credit Suisse, it added.

The four face possible sentences of up to five years in prison and a fine of $250,000.

The charges said they had helped Credit Suisse customers travel to Switzerland, the Bahamas and elsewhere to make use of the secret accounts.

"After the bank decided to close the secret accounts maintained by US customers, the defendants encouraged and assisted the customers to transfer their secret accounts to other banks in Switzerland and Hong Kong," to continue avoiding tax liabilities, the justice department said.

Credit Suisse itself is not a part of the investigation, according to the bank, and the indictment said the bank began shutting down its US cross-border banking services in 2008.

"We are cooperating with the authorities in their investigation of these individuals," Credit Suisse spokesman David Walker said.

The indictment came after the recent arrest in the United States of another Credit Suisse banker on similar charges.

The banker, identified by the Financial Times and other media as Christos Bagios, had earlier worked at another Swiss banking group, UBS, which came under US pressure in 2008 over its alleged marketing of secret accounts to US tax evaders.

UBS was eventually forced to pay a 780-million-dollar fine and some 4,000 case files on American clients.


Rising Gas Prices Hit Youth Entering Work Force Hard

Wednesday, February 23rd, 2011 | Finance News

After months of searching for a full-time job, my 18-year-old son landed one. Now a fresh 19, he has joined the rest of the working population in Cleveland and jumped into the daily flow of rush hour traffic. As happy as I am that he found something, I am concerned. Gas prices are on the rise, and his beginning wages are going to make it a difficult commute, mentally and financially.

It's never easy to see your hard-earned money whittled away. What makes it harder is to watch the toll the economy takes on your child. When he was younger and money was tight the solutions were easy: walk to the park, hit the library, play a game. Now, he is worried about saving money to follow his dream. Biding his time and stashing as much money as he can to finance his next step will become more and more difficult if the gas prices go over $4 a gallon as predicted.

His 2003 Ford Focus gets around 25 to 30 miles per gallon. Currently gas in our area is around $3.20. In order to conserve, we've mapped out a few alternative routes and arranged his schedule in order to make smarter use of his driving time.

Since I work from home the majority of the week, gas prices do not have much of a direct influence on me. A full-time writer, I can cocoon myself away from the hustle and bustle, but now, in light of the switch my son made from working odd jobs around the neighborhood with his brother and completing an internship program nearby, I have to take note.

Honestly, though, complaining about gas prices and how it may inconvenience or delay a dream seems very petty on a world scale. The crisis in Libya and the unrest throughout the Middle East is a growing concern. My son is feeling the burden of work but thankfully has not had to endure the bitter taste of war. My father is a Vietnam veteran, many of my friends served in the Gulf War and we know too many young adults currently overseas.

I am concerned about how gas prices affect my family, but I am more concerned about the state of the world today. I will gladly stay close to home and make necessary adjustments in how I plan grocery shopping and trips with the kids knowing that there are much bigger issues brewing. For the young people entering the work force, I do not know what to say, it seems counterproductive to spend the majority of a small paycheck on gas, car maintenance, insurance and the like. But the alternative, sit at home and do nothing, is worse in the long run. The country needs young people with a strong work ethic to keep the economy moving and make their mark on the world. Slow and steady wins the race, right?


Toll Brothers posts surprise 1st-quarter profit

Wednesday, February 23rd, 2011 | Finance News


LOS ANGELES – Toll Brothers Inc. upended Wall Street's expectations Wednesday, reporting a profit for its fiscal first quarter and higher contracts for new homes.

But what everyone wanted to know is how sales are shaping up so far this spring, traditionally the busiest time for homebuilders.

CEO Douglas Yearley Jr., delivered more positive news along with the quarterly results: The company's national spring sales event, which ends this weekend and offers buyers upgrades on home features such as cabinets and kitchen fixtures, has already brought in 15 percent more deposits than last year.

That's noteworthy, considering the industry got a big boost last spring from federal tax credits offered to entice reluctant buyers.

But Yearley struck a cautious tone, saying it's too early to render a verdict on the spring season.

Last year, after the government tax credits expired in April, new home sales collapsed on the way to the lowest level for any year since at least 1963.

"The goal of last year's tax credit was obviously to kick the market and then keep it moving, and it certainly kicked the market, but it was unable to keep it moving," Yearley said in an interview. "This year, I'm hopeful that, while the numbers are very similar to last year — up slightly — this will be more sustained, more natural demand."

While stressing that the housing market remains tough, and that it's too early to know how the spring home-selling season will turn out, Yearley noted that he's seeing improvement in some markets in Texas and the Northeast.

In the November to January period, Toll's contracts on new homes climbed 4 percent in units and 5 percent in value to $307.2 million.

On a per community basis, contracts rose 7 percent to 2.81 units, which was a strong improvement from the same periods in 2008 and 2009. Still, the builder said the results were well below a first-quarter average of 5.06 net signed contracts per community from 2001 through 2010.

In recent weeks, several large builders have reported their home deliveries and contracts for new homes fell sharply in and around the final months of last year.

Whether 2011 marks a turnaround for housing will hinge largely on how home sales fare this spring.

Sales of previously occupied homes rose slightly in January to a seasonally adjusted annual rate of 5.36 million, the National Association of Realtors said Wednesday. That's up 2.7 percent from 5.22 million in December.

Economists expect January new home sales data, due out Thursday, will be down to a seasonally adjusted rate of 303,000 homes versus 329,000 in December. That's about half the 600,000 a year pace that economists view as healthy.

Many would-be homebuyers continue to be put off by high unemployment, uncertainty over home prices and weak consumer confidence in the economy.

"The homebuyer is still wary," Yearley said.

The builder estimates it will deliver between 2,200 and 2,800 homes this year, down from its prior estimate of 2,100 to 2,900. Last year, it delivered 2,650 homes. The builder also projects it will open about 50 communities his year.

Yearley expects the company will add more employees this year than in 2010, but the ramp-up in hiring remains, as everything else, cautious.

"We're only filling positions that are needed for today's activity, but we're certainly back to growing," he said.

Homebuilders are a bellwether for the housing market and the economy. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, by some estimates.

Toll Brothers, which is based in Horsham, Pa., has operations in 19 states.

The builder reported net income of $3.4 million, or 2 cents per share, for the quarter ended Jan. 31. That compares with a loss of $40.8 million, or 25 cents per share, a year earlier.

Analysts surveyed by FactSet forecast a loss of 8 cents per share.

The quarter included a $20.4 million tax benefit compared with a $16 million tax benefit a year ago.

Revenue climbed 2 percent to $334.1 million from $326.7 million, besting Wall Street's $317.7 million.

Shares ended the regular session up 44 cents, or 2.1 percent, to $21.20.