Online Newspapers Overnight 01-28-2014 | Pol

Two men have been charged with running and three others with being customers of websites that allegedly offered to obtain access to email accounts.

The swoop against the sites was co-ordinated with police forces in Romania, India and China.

Six other alleged administrators of such sites were arrested as part of the overseas element of the operation.

Mark Anthony Townsend and Joshua Alan Tabor, both of Arkansas, have been charged with operating the needapassword.com website that, according the FBI, charged people to find passwords for about 6,000 email accounts.

If the two are found guilty they face up to five years in jail for computer fraud offences.

The other three people have been charged with paying, between them, more than $23,000 (£14,000) to similar hacker-for-hire websites outside the US to find passwords for a wide variety of email accounts.

Paying a hacker to act on your behalf is a "misdemeanour offense" and if found guilty each defendant could go to a federal jail for 12 months.

In a statement, the FBI said it expected all five defendants to plead guilty.

Federal prosecutors in New York announced charges against Charlie Shrem and Robert Faiella, both operators of bitcoin exchange businesses, for attempting to sell $1 million in the digital currency to users of the underground black market website Silk Road, which was shut down by authorities in September.

According to the charging document, Shrem, 24, chief executive officer of the exchange BitInstant.com, changed cash into bitcoins for Faiella, 52, who ran an underground bitcoin exchange through the username BTCKing on Silk Road's website. The criminal complaint says that Shrem, in addition to knowing that Faiella's business was funneling money into Silk Road, also used Silk Road himself to buy drugs, including marijuana-infused brownies.

"Wow, Silk Road actually works," Shrem told an acquaintance in an online chat, according to the complaint.

U.S. law enforcement officials have vowed to pursue any criminal activity in the nascent bitcoin world as regulators try to formulate their approach to the digital currency.

"When Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act," Preet Bharara, the U.S. attorney for Manhattan, said in a statement emailed to the press on Monday. "We will aggressively pursue those who would co-opt new forms of currency for illicit purposes."

Bharara has said recently that prosecutors are not going after bitcoin itself and view it as they view any other currency in which transactions are sometimes made illegally.

The U.S. Attorney's office in Manhattan said in the statement that authorities arrested Shrem on Sunday at New York's John F. Kennedy International Airport. Faiella was arrested on Monday at his home in Cape Coral, Florida.

The tech investors Cameron and Tyler Winklevoss invested $1.5 million in BitInstant last year.

"When we invested in BitInstant in the fall of 2012, its management made a commitment to us that they would abide by all applicable laws - including money laundering laws - and we expected nothing less," the Winkelvoss twins said in a statement.

"Although BitInstant is not named in today's indictment of Charlie Shrem, we are obviously deeply concerned about his arrest," they said. "We were passive investors in BitInstant and will do everything we can to help law enforcement officials."

Technology news website Re/code, which reported news of the deal earlier, said the price was $400 million, without disclosing where it got the information.

A Google spokesman declined to comment on the price. DeepMind representatives could not be immediately reached for comment.

Founded in London in 2012 by Demis Hassabis, Shane Legg and Mustafa Suleyman, DeepMind uses general-purpose learning algorithms for applications such as simulations, e-commerce and games, according to its website.

Google, which is working on projects including self-driving cars and robots, has become increasingly focused on artificial intelligence in recent years.

Eugene Kaspersky said 99 percent of mobile attacks are towards Android-based phones, since Apple has strict controls and does not allow third-party applications.

The most disturbing trend in cyber attacks was a growing shift to mobile devices from computers and a major cyber attack using mobile phones was bound to happen since cellular users are not properly protected, he told Reuters.

"I expect something really bad to happen to change people's minds and awareness," he said, noting that it took the Chernobyl virus in 1998 for people to properly protect their computers.

"Cyber crime is moving to mobile but people are not aware. It's still not as big as computer crime but it's growing fast. The trend is a very dangerous situation," he said at a cyber-tech conference in Israel, where he wants to open a research and development lab.

Kaspersky makes one of the top-selling anti-virus programs in the United States, where it has gained market share in recent years against products from Symantec Corp, Intel's McAfee and Trend Micro.

Megafon has not been able to sell iPhones since 2009 as the company and its rivals could not guarantee the sales volumes demanded by Apple, industry sources had said.

Megafon said it would buy various iPhone models under the new three-year deal with Apple.

It follows Vimpelcom which in October became the first Russian carrier to sign a new direct contract to sell the iPhone 5s and 5c. Market leader MTS still buys the smartphones from distributors.

Apple has a 20 percent share of a $6.50 billion Russian smartphone market in money terms, or 9 percent of units sold in 2013, according to cellphone retailer Euroset. Apple also sells in Russia through its online store and electronics retailers.

But he is unlikely to mention the Keystone XL oil pipeline, a politically charged project that could shape his legacy in each area.

Some five years after Keystone XL was proposed, Canadian officials, Republicans and some Democrats in conservative U.S. states are expressing frustration over the lack of a decision by the White House on the initiative.

The TransCanada Corp project involves construction of a 1,179-mile (1,900-km) pipeline from Alberta, Canada, to Steele City, Nebraska, where it would connect with a previously approved line. That would create a system that could move more than 800,000 barrels of crude from Alberta's oil sands to refineries on the U.S. Gulf Coast each day.

Supporters say Keystone XL would create thousands of jobs and cut U.S. fuel costs by reducing the nation's reliance on oil imports from nations that are less friendly than Canada. They also point to U.S. government reports about the dangers of moving crude oil by rail as an alternative to the pipeline.

Critics of the pipeline plan say it would harm the environment and hasten climate change by promoting oil-harvesting methods in Alberta that produce high levels of carbon dioxide emissions.

The project is in limbo while the U.S. State Department finalizes an environmental review, a long-delayed process that has irked allies in Ottawa and advocates on both sides of the issue in the United States.

Behind the scenes, a complex political calculus is at play on everything from the timing of the decision to the outcome.

For Obama, a decision in favor of the pipeline could undermine the Democratic president's environmental credentials and anger activists who have supported him just as his administration is writing new rules to reduce heat-trapping carbon dioxide emissions from power plants.

A decision against the pipeline could undercut Obama's pledge to boost employment and U.S. energy security while alienating an important international ally and oil supplier.

No matter what Obama decides, an announcement before the midterm congressional elections in November - which many observers expect - could make Keystone a big issue in the races that will determine control of the U.S. Congress.

As even the relatively robust economies of Mexico and Poland now feel the heat from disparate flashpoints from Turkey to Argentina, there are growing doubts that emerging markets have built any immunity to such contagion.

The wildfire engulfing the developing world is starting to look very like the currency runs of the past, such as the Asian, Russian and Latin American collapses that began in 1997.

Dominic Rossi, Global CIO for equities at fund manager Fidelity, likens the current wave of plunging currencies, equities and bonds to watching an old film - one in which some of the biggest emerging markets could feature.

"We've seen this movie before," he said. "One emerging country after another gets left stranded on the shore as the tide goes out. The weakest ones first, Argentina and Turkey, soon to be followed by Brazil, Russia and others."

Emerging markets have been inflated in recent years by huge amounts of cheap cash created by the U.S. Federal Reserve, much if which found its way into developing economies in the hunt for better returns. With the Fed scaling back the program, that flow is reversing and the currencies of countries with the biggest economic and political problems - notably Argentina and Turkey - are diving.

Investors' behavior may not have changed all that much from during the past crises, even though many emerging economies now have more flexible currencies and trillions of dollars in foreign exchange reserves. There are three main reasons why these markets could again suffer the capital flight that plagued them during the 1990s.

First is the scale of money that has moved to developing markets over the past decade and now dwarfs the sums which fled in panic 15 years ago.

Secondly, lending into emerging markets has increasingly been through bond markets, rather than in the direct bank loans that dominated previously and which involved longer-term relationships between banks and the firms and countries.

Thirdly, the emergence of index-tracking Exchange Traded Funds (ETFs) over the past decade has arguably increased the indiscriminate nature of emerging market inflows, leaving them ever more vulnerable to lockstep withdrawals.

The Supreme Council of the Armed Forces (Scaf) said: "The people's trust in Sisi is a call that must be heeded as the free choice of the people."

Security sources say he will resign and announce his candidacy within days.

Field Marshal Sisi led the ousting of President Mohammed Morsi in July, following mass protests against him.

An election must take place by mid-April. Correspondents say Field Marshal Sisi would be likely to win, given his popularity and the lack of any serious rivals.

On Saturday, tens of thousands of people backed his candidacy at a rally in Cairo, after the field marshal said he wanted to gauge "public demand".

At the same time, almost 50 people were killed in clashes between security forces and protesters demanding Mr Morsi's reinstatement. Referring to the field marshal, the alliance led by Mr Morsi's Muslim Brotherhood said on Sunday that the opposition protests showed "the people want the execution of the murderer" and not to "appoint the murderer as president".

'Unite the people' On Monday, the Scaf held an hours-long meeting to discuss "the demands of the people" for Field Marshal Sisi's candidacy.

During the meeting, interim President Adly Mansour announced that he had promoted him from general to the army's top rank, reportedly as a final honour before he stands down.

The state news agency Mena later reported that the Scaf had unanimously "endorsed" Field Marshal Sisi to run for president.

The state-run al-Ahram newspaper also said his chief-of-staff, Gen Sedky Sobhy, had been chosen to replace him as head of the armed forces.

A senior military official told the AFP news agency that the field marshal would step down and announce his run within days. He wanted to "unite the people, restore security and Egypt's international standing", the official added.

On Sunday, speculation that the field marshal would stand intensified after Mr Mansour said presidential elections would be held before parliamentary elections, switching the order laid out in last year's transitional "road map".

The 59-year-old former military intelligence chief was appointed head of the armed forces and defence minister by Mr Morsi in August 2012.

Israel is one of a number of countries competing to host the new plant.

"Intel will take its decision as late as possible. Until it needs to, it won't make a decision," Maxine Fassberg, general manager of Intel Israel, told a news conference. "If we're looking at the next technology it has to come this year, but we don't know when."

Intel has already held talks with the Israeli government, which must offer incentives to be competitive, said Fassberg, manager of Intel's Fab 28 plant in the southern town of Kiryat Gat.

"There is no certainty it will be in Israel. The jury is still out; we are in the game," said Mooly Eden, president of Intel Israel and general manager of perceptual computing.

Intel Israel's exports amounted to $3.8 billion in 2013, down from $4.6 billion the year before. Eden said the 2012 number was inflated by inventory carried over from 2011 as the plant upgraded to improved technology.

"Overall I believe we have a healthy growth," Eden said.

In its 40 years in Israel, Intel has invested $10.8 billion in plants and development centers and received $1.5 billion in grants. It employs nearly 10,000 people.

It received grants totaling 28 percent of its investment when it built Fab 18, which started operating in Israel in 1999. This amount fell to 15 percent for Fab 28 in 2008, and when it upgraded Fab 28, the grant amounted to only 7 percent, she said.

"We could look at almost any size," SAP's Chief Financial Officer Werner Brandt was quoted as saying. Brandt, who will retire in May, declined to name any potential targets.

SAP on Tuesday pushed back its profit target by two years as it waits for subscription revenue from cloud computing to gather pace and invests more in the business to keep up with a fast-growing market.

Cloud computing helps businesses cut costs by ditching bulky servers for network-based software in their own offices, instead using remote data centers run by technology companies.

IBM Markets Intelligence estimates the cloud computing market could be as big as $200 billion by 2020.

Obama's big speech on Tuesday will be his sixth foray into the House of Representatives chamber to lay out his policy priorities for the year.

This year's address is critical to forming a narrative on which Democrats can campaign this year. And Obama wants to bolster his standing after a rocky end-of-the-year controversy over the botched rollout of his signature healthcare law, and the tumult surrounding a government shutdown.

Obama has seized on income inequality in America as the main theme of his State of the Union speech, which went through its usual draft process over the weekend.

He will promote his demand that Congress raise the minimum wage and call for steps to increase jobs at the lower rungs of the economic ladder at a time when the stock market is soaring, but overall job growth is tepid.

The White House sees raising incomes as a key to building up the middle class and getting more Americans out of poverty and into better lives.

BATTLEFIELD

The implicit message, that Democrats stand for the middle class, should help them as they gird for what could be difficult congressional elections in November.

"I think it will define the battlefield of our debate, by clarifying for the American people about who's on their side," Representative Steve Israel, chairman of the Democratic Congressional Campaign Committee, told Reuters.

"The more the president talks about building the middle class and the more Republicans talk about protecting special interests, the better the battlefield for us."

Democrats will need all the help they can get.

The party in control of the White House typically loses seats in midterm elections. Republicans are mounting a spirited attack to take control of the Senate and capture more seats to bolster their majority in the House of Representatives.

Senate Republican Leader Mitch McConnell said his party stands a good chance of winning eight seats currently held by Democrats and could possibly extend their gains further.

The party needs to pick up a total of six seats to win control of the 100-seat chamber.

"The American people will understand by this fall that we are the party of the private sector," McConnell said on "Fox News Sunday."

"We've tried big government now for six years in a row, we know that it doesn't work."

If Democrats lose the Senate, Obama's ability to push legislation will be reduced greatly and solidify his status as lame duck.

Parliamentary elections were supposed to be held first under the timetable drawn up after the army overthrew President Mohamed Mursi of the Muslim Brotherhood in July following mass protests against his rule.

The decision to revise the order of elections is likely to deepen tensions in Egypt, which is struggling to cope with waves of political violence. Forty-nine people were killed in anti-government marches on Saturday, the third anniversary of the popular uprising that toppled autocrat Hosni Mubarak.

"I have taken my decision to amend the roadmap for the future in that we will start by holding presidential elections first followed by the parliamentary elections," interim leader Mansour said in a televised speech.

Critics have campaigned for a change of the roadmap, saying the country needs an elected leader to direct government at a time of economic and political crisis and to forge a political alliance before potentially divisive parliamentary elections.

Sisi is expected to announce his candidacy for the presidency within days and win by a landslide. His supporters see him as a strong, decisive figure able to stabilize Egypt.

The Brotherhood accuses him of masterminding a coup and holds him responsible for widespread human rights abuses in a crackdown against the movement which has killed up to 1,000 Islamists and put top leaders behind bars.

While tough measures against the Brotherhood have nearly crippled it, security forces have failed to contain an Islamist insurgency. Militant attacks have raised fears for the stability of Egypt, of great strategic importance because of its peace treaty with Israel and control over the Suez Canal.

EXPECTED MOVE

A new constitution voted in earlier this month cleared the way for a change in the order of the elections by leaving open the question of which should come first.

"It was an expected move amid the growing signs that Sisi is being groomed to become the next president," said Khaled Dawoud, a well-known liberal activist.

Mansour did not announce a date for the presidential vote. The constitution says steps towards holding the first of the elections should be begin no later than 90 days from the ratification of the document in mid-January.