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An Apple Inc. manager has been charged in a $1 million kickback scheme involving six Asian suppliers of iPhone and iPod accessories.

Paul Shin Devine, a 37-year-old Apple global supply manager from Sunnyvale, was named in federal indictments and a civil suit brought by Apple (NASDAQ:AAPL) on Friday in San Jose.

The federal grand jury indictment charges Devince, who has been with Apple since 2005, with wire fraud, money laundering and other offenses.

The indictment also names Andrew Ang of Singapore, who works for Apple supplier Jin Li Mould Manufacturing Pte. Ltd.

Court filings on Friday said that Devine was paid by suppliers in Asia for inside information they could use to get negotiate favorable contracts with Apple.

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The U.S. economy continued to grow during the second quarter, the government reported Friday. But the pace slowed more than economists were expecting, raising concern about growth - or even another recession - in the months ahead.

Gross domestic product, the broadest measure of the nation’s economic activity, rose at a 2.4% annual rate during the three months ended June 30, the Commerce Department said.

The sluggish pace was down from the upwardly revised 3.7% growth rate in the first quarter, and missed economists’ forecast for a 2.5% increase.

Still, the figure marked the fourth straight quarter of growth and gave credence to some economists’ views that the recession that began in December 2007 likely ended at some point in mid-2009.

"This solid rate of growth indicates that the process of steady recovery from the recession continues," said Christina Romer, chair of the White House Council of Economic Advisers, in a statement.

"Nevertheless, faster growth is needed to bring about substantial reductions in unemployment," she added. "Much work clearly remains to be done before the U.S. economy is fully recovered."

Most troubling to economists - particularly in the months ahead - was a slowdown in consumer spending, which accounts for 70% of economic activity.

Nigel Gault, chief U.S. economist at IHS Global Insight, said the subdued consumer spending, pressured by high unemployment and debt as well as a lack of income and credit access, could lead to slower growth - or even another downturn.

"People are continuing to cut back, and that could mean that third-quarter growth will be the worst since the end of the recession," Gault said. "The slowing growth path leaves the possibility of a double-dip recession on the table."

The report showed consumer spending rose at a modest 1.6% rate last quarter. That compares to a 1.9% rise during the first quarter, revised down from a previously reported 3%.

A surge in imports also weighed on domestic growth, the government said. Imports spiked 28.8% during the second quarter, up from an 11.2% hike in the previous quarter.

But that increase was mostly due to 17% jump in business investments, as business increased spending by 22% on software and equipment, which Gault said are primarily produced outside of the United States.

"Businesses reduced spending very sharply last year during the recession by cutting costs and employees," Gault said. "The pullback helped them prop up profits. Companies are sitting on huge piles of cash, which they’re now putting to work."

While they’re willing to refresh their technology equipment, Gault said businesses are still cautious when it comes to hiring, and that will continue to strain the economy.

He added that the quarter’s significant increases in housing and government spending were driven by temporary factors and will likely reverse into declines in the current quarter.

The report showed that residential investment climbed 28% during the second quarter, as Americans rushed to buy homes ahead of the expiration of the homebuyer tax credit.

And government spending rose 9.2% during the quarter, up from 1.8% in the first quarter. Gault attributed that growth to spending related to the decennial census.

Recession deeper than previously thought

Revisions to annual GDP rates also released Friday indicated that the economic downturn was worse than the government previously estimated, and the recovery was more slack.

Between the fourth quarter of 2007, when the recession officially began, and the second quarter of 2009, when many economists say it ended, GDP dropped by 4.1%, marking the deepest recession since 1947. The government’s prior estimate for the overall decline during the period was 3.7%.

"It now appears that the financial crisis may have affected production substantially more quickly than was previously reported or realized at the time," Romer said.

The most significant factor in the downward revisions was muted consumer spending, but the data also showed that the consumer savings rate is higher than expected.

Annual growth rates for 2007, 2008 and 2009 were all revised lower.

In 2007, the government said the economy grew at a rate of 1.9%, down from the 2.1% it reported earlier. In 2008, economic activity was flat instead of ticking up 0.4%. And in 2009, the economy shrank at a rate of 2.6%, weaker than the 2.4% rate previously estimated.

"While the recession was somewhat deeper than originally thought, the recovery was also much more tepid that previously thought and is slowing rather than accelerating," said Martin Regalia, chief economist for the U.S. Chamber of Commerce, which has been critical of Obama administration business policies.

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ADC Telecommunications Inc. has been sold to Tyco Electronics in a $1.25 billion deal, the companies announced Tuesday.

Tyco will pay $12.75 per share for Eden Prairie-based ADC, which makes technology for the telecommunications industry.

The transaction is expected to close in the fourth quarter.

Tyco, based in Switzerland, recorded more than $10 billion in revenue last year. The company, formerly part of Tyco International, makes electrical components for several industries, including networking equipment used by telecom companies.

The deal will allow Tyco to expand its portfolio of wireless connectivity products, which are used to build mobile networks, the company said in a news release. Tyco (NYSE: TEL) also will incorporate ADC's U.S. professional services business into its operations payday loan lenders.

The acquisition will add up to 14 cents per share to Tyco's full-year earnings, the company said.

ADC ranked No. 32 on the Minneapolis/St. Paul Business Journal's most recent list of the largest public companies in the state. The firm has 9,050 employees in Minnesota.

An ADC spokesperson couldn't be reached for comment on how the deal will affect jobs in the Twin Cities.

The company has a long history in the Twin Cities. It grew rapidly during the tech boom of the 1990s — becoming a $3 billion company by 2000. It cut its staff sharply after the dot-com bubble burst.

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ST. LOUIS — Boeing Machinists chose to remain on the job instead of walking out on strike — a move that was met with a mix of cheers and jeers inside the Chaifetz Arena on Sunday.

"The membership spoke," said Gordon King, president and directing business representative for the International Association of Machinists District 837. "Ultimately, it is their choice."

The union represents more than 2,500 Boeing Machinists in the St. Louis area. Union negotiators had recommended the workers reject the latest contract proposal, but King said he knew the vote could go either way.

The vote was 1,237 in favor of the contract and 838 opposed.
The result was a far cry from the vote taken just two weeks ago, when the union overwhelmingly rejected Boeing’s previous offer by a 3-to-1 margin. Since then, the fear of going on strike during a recession began to weigh more heavily on many union members, King and several union members said.

Boeing’s 4 1/2-year proposal will raise Machinists’ salaries an average of 3.6 percent a year and increase pension payments for those already employed by the company.

The latest company changes included removal of language requiring employees to pay for dependent medical care coverage during extended leaves of absence and caps to nonformulary name-brand drugs.

In a released statement, Boeing officials said the vote "allows us to keep delivering on our commitments to our customers." The Machinists in St. Louis work on the F/A-18 Super Hornet, the EA-18G Growler, the F-15 fighter jet and the C-17 Globemaster transport plane.

Boeing officials said their goal was to produce a contract that "recognizes both the significant contributions of our employees and the competitive environment in which we must compete to keep jobs here in St. Louis."

A strike would have only magnified what has been a difficult period for Boeing’s St. Louis-based defense business, which has been dealt setbacks in recent Pentagon budgets.

Defense Secretary Robert Gates opposes continued production of the C-17. Last year, the Pentagon scaled back Army modernization and missile-defense programs in which Boeing was a major player.

But Boeing also is working toward securing another multiyear order of locally built F/A-18 fighter jets.

As a strike loomed during the past week, Boeing offered a key concession, removing language requiring employees to pay for dependent medical care coverage during extended leaves of absence and capping the costs of nonformulary name-brand drugs.

But the most contentious issue — pension benefits — was left unchanged empire payday loans. Instead of a pension, Boeing will offer new hires after January 2012 an enhanced 401K contribution plan.

Though they accepted the provision in the new contract, current Machinists and retirees worry that the change means that their pensions, too, will be placed in peril in the future.

"I’m scared to death that they’re going to freeze the defined-benefit pension plan we have right now and end up selling it to an insurance company and turn it into an annuity," King said. "And then what’s going to happen from there, a good possibility of losing what they’ve got."

Maintenance worker Herman Ward of Florissant, a 24-year Boeing employee, said he was relieved the contract was accepted. He was concerned that a work stoppage would have resulted in the elimination of his job. He said he supported the company’s contract offer in both votes this month.

"There’s a possibility that when you go out, you won’t get back in," Ward said of a strike. "There are outside contractors ready to take our jobs … I could not afford to take a chance of losing everything that I’ve worked so hard to get just because another decision someone else wanted to make for us."

Several groups of workers gathered in the Chaifetz Arena parking garage following the vote. Some refused to give their names to reporters. Few would say how they voted. Many expressed relief that the negotiations were over.

"We have a job," said one Machinist between sips of beer. "The way things are right now, you should be thankful you have a job."

But Boeing flight mechanic Peggy Chapin of Granite City said she was disappointed by the outcome — even though both she and her husband, Tom, also a Boeing Machinist, would have been on strike at the same time.

"I think they’re scared," she said of fellow union members moments after Sunday’s vote. "I can understand the economic times and everything. Everybody’s scared. Sometimes you’ve got to stand up and fight for what you believe in."

U.S. Sen. Christopher "Kit" Bond, R-Mo., said in a statement that he was glad that fight did not take the form of a strike, noting the importance of Boeing’s contributions to national defense. "Our nation’s warfighters and our allies depend on the dedicated and skilled Machinists of Boeing," he said.

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Dr. Roger Evans, a cardiologist in Wichita, Kan., is used to answering patients’ questions about their hearts. But lately, he said, he has spent half his time answering a succession of different questions — about the health care law.

Donald Moore, 75, one of those patients, expressed his uneasiness about the law recently: “The fact is that I don’t understand it, and no one else I talk to understands it. Every day, you read something different in the paper.”

Moore’s latest concern was a “rumor that the new health care procedures are going to be monitored and managed by the IRS.”

“That’s a turnoff right there,” he said. “How much is true, how much is fiction, out here no one knows.”

Most of the health care law, which President Barack Obama signed last month has yet to take effect, but for many doctors it is already having an impact.

“We’ve had to add an hour or two to the day because patients want to talk about it,” said Evans, who travels around the state and said questions often left him scratching his head. “I see 30 to 50 patients in a day, and it is the subject of conversation more than half the time.”

After months of public wrangling and brinksmanship in Washington, the nation’s doctors now find themselves having to answer questions about a 2,400-page law that many do not understand themselves, and which they may have opposed. “Not only is the public confused, but so are our members,” said Dr. Lori Heim, president of the American Academy of Family Physicians, which supported the bill. “There’s been a lot of misinformation out in the media. We’ve been trying to get to them simple answers — what does this mean for my practice, what does it mean for my patients, what does it mean for the future?”

Some doctors said their patients were pushing for surgery now, for fear that it will not be covered in the future or that they will end up on a waiting list. “It’s ludicrous to be coerced to perform surgery because of fear of noncoverage in the future,” said Dr. Eustaquio Abay II, a neurosurgeon in Wichita. “I refuse.”

Abay said he had tried to read the law, but gave up because it was all legal jargon to him. “They think we have all the answers, but we don’t,” he said of patients.
While many doctors say they are not besieged, the queries have been particularly robust in states where the plan was unpopular, Heim said.

Joseph Baker III, president of the Medicare Rights Center, a nonprofit organization that operates a hotline for patients with questions, characterized the volume of calls about the bill as moderate. But he said the level of confusion was high, comparable to that created when Medicare added prescription drug coverage in 2004.

Often, Baker said, callers have been getting their information from media commentators or doctors who opposed the legislation. “They’re being told by their providers, ‘Now I won’t be able to take Medicare patients,’” he said.

“People call us confused, panicked, anxious,” he said. “And in most instances, we say there are some benefits in the short term, like closing the doughnut hole,” as the gap in Medicare prescription drug coverage is known, “and that the things that might have a negative impact, like lower reimbursement to providers, will happen over a number of years. Usually that calms people down.”

The questions do not always reflect the actual provisions of the law. The major changes for this year, including coverage on their parents’ policies for adult children under age 26, rarely come up, said Dr. Melissa Gerdes, a family practitioner in Whitehouse, Texas, who said it was not unusual for her patients to discuss politics in the examining room. She said that only one patient had asked about the new law’s provisions on the doughnut hole, and that she could not recall any patient who had inquired about coverage for adult children.

“The big one I get is, ‘Are you going to be able to keep seeing me?’” Gerdes said. (She tells them she will.)

At Dr. Alieta Eck’s free clinic in Somerset, N.J., where all the doctors donate their time, Eck said many of her patients were excited about the new program. “People say, ‘I can’t wait for Obamacare,’” said Eck, who has been outspoken in her opposition to the program. “They’re already getting free care.”

Eck said that her office had not been overrun with questions about the bill, but that during visits at her paid practice, “most patients are fearing that everything’s going to cost them more.”

For many doctors, the big frustration comes when they do not know what to say to their patients.

“Quite honestly, I don’t know how to answer their concerns,” said Dr. Deborah Sutcliffe, a solo practitioner in Red Bluff, Calif. “Sometimes they’re more informed than I am, sometimes they’re not. I haven’t read the damn thing.”

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Having seen its $3.3 billion takeover bid spurned by the board of Macarthur Coal Ltd., Peabody Energy Corp. is asking Australia’s Takeovers Panel to intervene on its behalf.

Peabody is asking the panel to require Macarthur to postpone a Monday meeting where shareholders will consider issuing stock to complete the purchase of a third coal producer Gloucester Coal Ltd.

Macarthur agreed in December to buy Gloucester. But Peabody has said that its interest in Macarthur is contingent the Gloucester deal being scuttled.

Macarthur’s board rejected both Peabody offers, saying they don’t fully value the company, which is in the midst of an aggressive expansion. The board also recommended that shareholders vote to issue shares on Monday to complete the Gloucester transaction.

Australia’s Takeovers Panel is a peer-reviewed body that operates under the country’s securities law, according to its web site. It is charged with resolving disputes over takeover proposals. Its 54-members consist of executives, lawyers and academics appointed by the Governor General.

In its appeal to the panel, Peabody argues that Macarthur failed to provide shareholders with enough information to compare its bid with the Gloucester agreement.

The St. Louis-based company asked that Macarthur provide more disclosure, including updated analysis from an independent expert on the Gloucester proposal, and that Monday’s shareholder meeting be delayed until 10 business days after shareholders receive the additional information.

In a statement Thursday, Macarthur said shareholders “have all information required to make an informed decision.”

The company also criticized Peabody for taking out full-page ads in major Australian newspapers, calling them “self serving and potentially misleading.

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This is why I must keep writing about Roth IRA conversions:

A dozen readers age 70 1/2 and older have written to say their financial advisers recommended they convert their entire traditional IRAs to Roth IRAs this year. By converting everything, the advisers claimed, they’d avoid having to take required minimum distributions from their traditional IRAs for 2010.

That’s incorrect and potentially very costly advice.

"It’s absolutely not true," said Ed Slott, a certified public accountant in Rockville Centre, N.Y., who publishes a monthly "IRA Advisor" newsletter for financial professionals (at www.irahelp.com). After age 70-1/2, holders of traditional IRAs must start withdrawing a minimum amount each year (the required minimum distribution or "RMD"). This distribution must be taken before any remaining funds can be converted to a Roth IRA.

Failure to take a required distribution is subject to a 50 percent penalty on the amount that should have been withdrawn but wasn’t. Any RMD funds mistakenly "converted" into a Roth IRA can be considered an "excess" contribution to the Roth IRA, resulting in a 6 percent excise penalty for every year the money remains in the Roth IRA, Slott said.

To answer a common question, people eligible to make a direct contribution to a Roth IRA — which is different from a conversion — can certainly use money from an RMD for the contribution. But to be eligible to contribute, you or your spouse must have "earned income," which means mostly income from work — the RMD itself does not qualify — and your income cannot exceed certain limits. The IRA direct contribution limit for 2010 is $6,000 for people 50 and over, while conversions have no limit.

Slott, who runs training seminars for financial professionals on IRAs, said he’s found a general lack of knowledge about the rules and potential pitfalls of Roth IRA conversions among many advisers no fax pay day loans.

"I am starting to realize how much they don’t know," Slott said, particularly bank employees and brokers who are not tax-law specialists. As of this year, anybody with a traditional IRA is eligible to convert to a Roth. Whether it makes sense to do so depends on a host of individual circumstances, which is why getting good advice is important.

But bad advice abounds. Another reader said he decided against converting because his adviser told him that, once in the Roth IRA, the converted funds could not be withdrawn for five years.

"That’s wrong, too," Slott said. Converted funds can be withdrawn at any time, although there may be penalties.

But penalties are probably not as bad as you think. A much-feared 10 percent tax penalty on withdrawals applies only if you withdraw the converted funds before age 591/2 and also have not held the funds for at least five years.

Once you are at least 591/2, "there is no more 10 percent penalty, period," even if you withdraw the money right after you convert, Slott emphasized. Five years after a conversion, and once you are at least 591/2, all the money, including any subsequent investment gains, can be withdrawn tax-free.

Even if you are 591/2 or older, if you withdraw converted funds within five years, you would owe ordinary income taxes on any investment gains since the conversion — but not on the amount converted. Taxes can be minimized or avoided through well-timed partial withdrawals. The first funds withdrawn from a Roth IRA are generally considered to be any direct contributions and converted principal, which have already been taxed and would not be taxed again.

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Despite a drop in demand, gas prices continued to move higher last week, with the national average hitting $2.82, up from $2.79 a gallon the previous week.

However, the fundamentals don’t support higher prices and we can expect to see prices fall a few cents this week, said Jessica Brady, manager of AAA public and government relations.

“We may see retail gas prices decline a few cents this week in response to the lower crude price, and this should help postpone $3 gasoline from becoming a common sight in the Southeast,” she said in a news release payday loans.

Statewide, the price of a gallon of regular gasoline hit $2.85 last week, up from $2.84 a week earlier.

Prices held steady week over week in two of the three South Florida counties, with the average price of a gallon of regular unleaded selling at $2.90 in Miami and $2.87 in Fort Lauderdale. The average price rose by a penny in West Palm Beach, to $2.92.

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For a sneak peek at this year's Women in Business Awards, visit our event page. There you'll find the 2010 award winners, and information on a banquet honoring their achievements free credit reports.

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A congressional watchdog panel warned on Thursday that mounting commercial real estate losses could endanger the banking system and thwart economic recovery.

A total of $1.4 trillion in commercial real estate loans will require refinancing in the next four years, the Congressional Oversight Panel said in a report. More than half of those loans are underwater, written for properties whose value has dropped like a rock.

The expected losses when loans go bad could hit between $200 billion to $300 billion and threaten 3,000 small and mid-size banks with a disproportionate share of commercial real estate assets on their books, according to the panel.

The report is intended to "wave a red flag" to the White House and Congress that the commercial real estate loan market is going to get a lot worse before it gets better.

"We’re at a point where even as TARP is ramping down another major challenge in our economy is ramping up," said Elizabeth Warren, the oversight panel’s chairwoman. "We need to start now, before the system is on the brink of collapse to figure out a plan," she added.

The panel’s research found that 2,988 banks are heavily invested — with more than three times their assets tied up — in commercial real estate loans. Of that number, 2,500 banks each have less than $1 billion in assets.

Indeed, many such smaller banks have already failed. Small bank failures"will intensify sharply over the next few years," Warren said.

"When commercial properties fail, the result is a downward spiral of economic contraction, as these are the same small banks that create jobs and boost economic activity," she said Business Card Holders.

Solutions: The panel offers a number of possible solutions for policymakers to head off a commercial real estate crisis. For example, it says the Treasury Department should "stress test" banks that are concentrated in commercial real estate loans.

Treasury Secretary Tim Geithner said at a congressional hearing last fall that "it is not realistic or feasible" to review such a large number of banks in a detailed level.

The oversight panel also suggested that the federal government should consider other remedies, including injecting capital into these small banks, buying their toxic assets or guaranteeing loans.

Bank regulators could also simply allow banks to extend underwater loans rather than requiring them to recognize losses, but the panel worries that such a move could delay a rebound in bank lending. But the panel also worries that massive writedowns throughout the banking system could stymie lending and create a "negative bubble."

"There’s a need for a nuanced response," Warren said. She said that banks should recognize some commercial real estate losses, but that regulators should monitor them closely to ensure that losses don’t spiral downward and drag down the larger economy. 

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