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Tag: Professional services

  • CBIZ names James Aspromonti Long Island office managing director | Long Island Business News

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    THE BLUEPRINT:

    • will retire April 30 after leading on Long Island for years

    • became office managing director on Feb. 1

    • Aspromonti brings more than 35 years of accounting and assurance experience

    • Mazzenga chaired the annual CBIZ Workplace Challenge, the firm’s largest event on Long Island

    Carolyn Mazzenga, CBIZ’s longtime Long Island leader, will retire April 30, the national advisor said Monday. Taking the reins, James Aspromonti assumed the role of office managing director for the firm’s Melville and Riverhead locations on Feb. 1.

    With more than 35 years of experience, Aspromonti is a managing director and shareholder in the firm’s Assurance Services group. He has leadership experience in the CBIZ Consumer Products and Food & Beverage industry groups. He has been responsible for directing the accounting and auditing activities of CBIZ professionals serving these industries.

    His expertise includes helping clients improve their accounting efficiencies. He also serves internally as a mentor for staff.

    “I am honored to step into the role of office managing director and look forward to continuing our tradition of client service excellence,” Aspromonti said in a news release about his appointment.

    “It is a true privilege to follow in Carolyn’s footsteps – her leadership and dedication have set a remarkable standard for our team and the community,” he added.” I look forward to developing our next generation of professionals and fostering a collaborative and innovative team environment at CBIZ.”

    Active in the Long Island business community for many years, Mazzenga has received multiple professional and community awards.

    Mazzenga chaired the annual CBIZ Workplace Challenge, the firm’s largest event on Long Island, raising more than $1.4 million for local nonprofits since 2006. She helped launch the firm’s Women’s Leadership Development Program and contributed to its national Diversity, Equity & Inclusion initiative. She has also been quoted in publications on work-life balance, flexible scheduling, and women’s initiatives.

    “It has been a privilege to serve our clients and community alongside such a talented and dedicated team,” Mazzenga said in the news release.

    “I am proud of the growth and impact we have achieved together, from strengthening our presence in the business community to supporting important causes across Long Island,” Mazzenga said. “I have every confidence in Jim’s leadership and look forward to seeing CBIZ continue its legacy of excellence, innovation, and community commitment.”


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  • Starbucks feels the heat as more chains compete for US coffee drinkers

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    NEW YORK — Americans are drinking more coffee than they have in decades. But fewer of them are getting it from Starbucks.

    The company that revolutionized U.S. coffee culture remains America’s biggest player, with nearly 17,000 U.S. stores and plans to open hundreds more. But it’s facing unprecedented competition, which will make it harder to win back the customers it already lost.

    Starbucks’ share of spending at all U.S. coffee shops fell in 2024 and 2025; it now stands at 48%, down from 52% in 2023, according to Technomic, a food industry consulting firm. Dunkin ‘, a perennial rival that just opened its 10,000th U.S. store, gained market share in both of those years.

    Starbucks has other challengers, like the fast-growing drive-thru chains 7 Brew, Scooter’s Coffee and Dutch Bros. Chinese chains like Luckin Coffee and Mixue are opening U.S. stores. High-end coffee shop Blue Bottle, which has 78 U.S. stores, has opened two more since the start of the year. Even McDonald’s and Taco Bell are bolstering their beverage offerings.

    “People haven’t fallen out of love with Starbucks, but they’re now polyamorous in their coffee choices,” said Chris Kayes, chair of the management department in the George Washington University School of Business. “People are now experimenting with other coffees, and they’re seeing what’s out there.”

    Americans love coffee. In both 2024 and 2025, an estimated 66% of Americans reported drinking coffee every day, up 7% from 2020, according to the National Coffee Association, an industry trade group.

    Coffee chains are racing to cash in on that demand. The number of chain coffee stores in the U.S. jumped 19% to more than 34,500 over the last six years, according to Technomic, a consulting firm that researches the foodservice industry.

    Seattle-based Starbucks was a small, regional chain when former CEO Howard Schultz acquired it in 1987. Now, other small chains are seeing explosive growth. Nebraska-based Scooter’s Coffee had 200 locations in 2019; it now has more than 850. Arkansas-based 7 Brew, which had 14 locations in 2019, now has more than 600.

    “There’s too much supply relative to demand,” said Neil Saunders, a managing director and retail analyst at consulting firm GlobalData Retail

    Saunders said Starbucks’ size is somewhat of a disadvantage, since it has less ability to grow sales by opening new locations.

    “Honestly, they’re pretty saturated,” Saunders said. “They’re a very mature business.”

    Starbucks is undaunted. At a conference for investors on Thursday, the company said an ongoing effort to improve service while making stores warmer and more welcoming was boosting U.S. store traffic. It plans to add 25,000 seats to its U.S. cafes by this fall.

    “Growth doesn’t require us to become something new. It requires us to be exceptionally good at what we already are,” Starbucks Chief Operating Officer Mike Grams said.

    Starbucks expects to open more than 575 new U.S. stores over the next three years. It developed a smaller-format store that is cheaper to build but still has indoor seating, drive-thru lanes and mobile pickup. The company said the reduced scale would allow Starbucks stores to operate in locations they couldn’t before.

    Starbucks is also adding new products, like updated pastries and snackable foods that are high in protein and fiber, to try to win back customers.

    Lack of menu innovation is one reason Starbucks has struggled, especially among younger consumers who like novelty and will try new places to find it, Saunders said.

    Arizona-based Dutch Bros, for example, added protein coffee drinks in January 2024, nearly two years before Starbucks did. Energy drinks make up 25% of Dutch Bros’ business almost 14 years after the chain introduced them. Starbucks offered iced energy drinks for a limited time in 2024; executives said Thursday that customizable energy drinks would appear on the Starbucks menu soon.

    Dutch Bros, which is led by former Starbucks executive Christine Barone, has just over 1,000 shops in the U.S. and hopes to double that number by 2029. It’s betting that customers want speed and convenience; nearly all of its stores are drive-thrus with walk-up windows.

    Dutch Bros also focuses on value. In a recent meeting with investors, Barone pointed out that Dutch Bros’ medium drinks are 24 ounces; at Starbucks, a medium drink is 16 ounces.

    Luckin, whose app brims with coupons and promotions, is also value-oriented. On a recent afternoon, one of its nine New York stores buzzed with customers picking up mobile orders. The tiny shop had no seating.

    Xunyi Xie, who was visiting New York from his home in Delaware, said he stopped by to try a Velvet Latte because Luckin had a $1.99 drink promotion. Xie said he normally brews his own espresso, but if Luckin opened a store that was on his way to work, he would go there.

    As for Starbucks? “I think it’s overpriced,” Xie said.

    In 2024, the average customer spent $9.34 at Starbucks, compared to $8.44 at Dutch Bros and $4.68 at Dunkin’, according to an analysis by the investment research company Morningstar.

    Starbucks didn’t raise prices in its 2025 fiscal year and has vowed to be judicious about future increases. But Ari Felhandler, an equity analyst with Morningstar, said it would be a mistake for Starbucks to try to win over customers with discounts because competitors will always go lower.

    “Keep your prices the same and try to justify them,” Felhandler said. He thinks Starbucks’ store redesigns and new menu items will bring back traffic.

    Grams, Starbucks’ chief operating officer, said the company firmly believes its best way forward is not drive-thru-only stores or mobile pickup kiosks. It’s building cafes with comfortable seating — the “soul of Starbucks,” as he put it — that also serve mobile, drive-thru and delivery customers. Customers sometimes want something convenient, and they sometimes want to dwell, he said.

    “There’s always going to be competition. We’re aware of it, we keep an eye on it for sure, but we don’t try to be them,” Grams told The Associated Press. “We offer something that most people don’t, which is a legitimate space to sit down, enjoy and use it for a variety of different reasons.”

    But Kayes, of George Washington University, wonders if that strategy will be enough to keep Starbucks on top, or if customers who want a cozy or premium experience have already moved on to independent coffee shops or upscale chains like Blue Bottle.

    “In some ways, I think they are a victim of their own success,” Kayes said. “I do think that the aura of Starbucks as being something special and unique and exciting isn’t there anymore.”

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  • PwC names Sean Hunt managing partner of Melville office | Long Island Business News

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    THE BLUEPRINT:

    • named office managing partner of ‘s , office

    • Hunt brings 21 years at PwC, including two decades advising Long Island businesses

    • He succeeds Peter Kaplan, who will retire in 2027 after 37 years with the firm

    • Focus includes talent investment, regional growth and supporting clients through change

    PwC has named Sean Hunt as its new office managing parter for the firm’s Melville office, overseeing Long Island. Hunt has been with the firm for 21 years and succeeds Peter Kaplan, who is set to retire in 2027 after more than 37 years at PwC.

    The firm has had a Long Island presence for more than 50 years. Hunt spent the last 20 of them in the region advising , family-owned businesses and growth-oriented firms across Nassau and Suffolk counties and the greater New York region. His work includes tax, regulatory and structuring matters for companies in industries such as real estate, healthcare, financial services, manufacturing, and private equity-backed businesses.

    As office managing partner, Hunt will lead efforts to expand PwC’s Melville office as a center for serving businesses and organizations across Long Island, while building the firm’s capabilities and regional presence. His focus will include investing in talent and leadership development, deepening local relationships, and supporting clients as they manage regulatory change, adopt new technologies and navigate ownership transitions.

    “Long Island businesses are dealing with real decisions right now, including growth, succession, technology, and an environment that keeps changing,” Hunt said in a news release about becoming office managing partner of the firm’s Melville office.

    “Our job is to stay close to our clients, understand what’s happening on the ground, and bring them practical advice that helps them move forward,” Hunt said. “I’m proud of this team and excited about where we can take the Melville office next.”

    The Melville office employs more than 150 professionals who provide assurance, tax and advisory services to clients. The team advises middle-market and privately held companies as they pursue growth, investment and increased operational complexity.

    Kaplan led the office for more than 11 years, and is credited with broadening the firm’s reach in the region through fostering relationships with business leaders and a culture of collaboration and mentorship, as well as engaging with the area’s civic community.

    “This office has always been about people and relationships, with our clients, our teams, and the broader Long Island community,” Kaplan said in the news release.

    “Sean has grown here professionally, and he understands what makes this market work,” Kaplan added. “I’m confident he’ll build on what we’ve created and lead the office with a steady hand and a clear point of view.”

     

     


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    Adina Genn

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  • China’s C919 jet faces turbulent skies as US-China trade tensions add to delays

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    HONG KONG (AP) — China’s ambition to challenge Boeing and Airbus with its own homegrown passenger jet is running into turbulence, with deliveries of finished aircraft likely to fall far short of its target announced for this year.

    The C919 jet — a single-aisle passenger plane aiming to rival Boeing’s 737 and Airbus’ A320 – is made by state-owned aircraft manufacturer COMAC. Beijing is showcasing it as evidence of China’s technological advancement and progress in self-reliance, though it uses many Western sourced components.

    Trade friction with Washington threatens to prevent COMAC from securing core parts for the program that has been supported by huge Chinese government subsidies.

    “COMAC faces significant risk from the volatile policy environment, with its supply chains vulnerable to export restrictions and tit-for-tat measures between the U.S. and China,” said Max J. Zenglein, Asia-Pacific senior economist at The Conference Board think tank.

    The C919 has 48 major suppliers from the U.S. — including GE, Honeywell and Collins — 26 from Europe and 14 from China, according to analysts at the Bank of America. Trump threatened to impose new export controls on “critical” software to China after Beijing imposed stricter export controls on rare earths.

    “Existing choke points are being exploited in the deal making process between governments,” Zenglein said. “This is likely to continue as critical dependencies have become political bargaining chips.”

    Beijing has high hopes for the C919, which made its maiden commercial flight in 2023. The mid-sized jet is meant to help fill vast domestic demand for new aircraft over the next few decades. China hopes to expand sales beyond its borders and fly globally, including in Southeast Asia, Africa and Europe.

    COMAC delivered 13 C919s to Chinese carriers last year and only seven as of October this year, despite plans to ramp up production and deliver 30 jets in 2025, according to the aviation consultancy Cirium.

    China’s biggest state-owned airlines — Air China, China Eastern and China Southern — are the only commercial airlines currently flying a total of around 20 C919s.

    Trade tensions between the U.S. and China have “directly affected” delivery schedules for the C919, said Dan Taylor, head of consulting at aviation consultancy IBA. For one, output plans were disrupted when the U.S. suspended export licenses for the jet’s LEAP-1C engines around May, resuming them in July, he said.

    U.S.-controlled technology that needs export licensing for the LEAP-1C engines — jointly built by the U.S.’s GE Aerospace and France’s Safran -— means the C919’s engines require U.S. export clearance, Taylor said, making it “inherently sensitive to political shifts.”

    “Engine and avionics dependence on Western suppliers continues to expose the program to policy decisions beyond COMAC’s control,” Taylor explained.

    Geopolitical tensions alone are not the only cause for slower than expected production of the C919s. The program has been “marked by caution and prioritizing quality and safety, so there also may be some operational reasons for the slower production ramp up,” said Zenglein from The Conference Board.

    While “it has always been the aim to reduce the reliance on foreign components as quickly as possible” for the C919, Zenglein said, many analysts say it is a challenging process. China’s own engine alternative — the CJ-1000A under development by state-owned Aero Engine Corporation of China (AECC) — is still under testing, according to IBA.

    Several airlines outside of China, including AirAsia, have expressed interest in flying the C919, but a lack of international certification has so far prevented the C919 from flying beyond China. Certifications from the U.S. and the European Union’s aviation regulators could take years.

    For the C919 to succeed, it “needs to have each one of three things: good economics, a prompt global product support network, and certification from safety agencies”, said Richard Aboulafia, managing director of AeroDynamic Advisory. “Any one of these three alone doesn’t mean much,” he said.

    China will need 9,570 new passenger aircraft between 2025 and 2044, according to Airbus’ latest market forecast, more than 80% of them single-aisle jets like the C919.

    COMAC’s faces a growing challenge from Airbus, which is expanding its manufacturing capacity in China. A second assembly line is due to begin operating in 2026, allowing Airbus to increase its production of A320 single-aisle jets in China – an aircraft model similar to the C919.

    Analysts expect that it will take years for COMAC to break the Boeing-Airbus duopoly in global aircraft share. By the late 2020s, COMAC will likely grow within China and possibly establish regional exports, said IBA’s Taylor.

    In the near term, a lack of international certification will be “delaying any meaningful Western-market entry” for the jet and export control volatility will likely continue to undermine its global expansion plans, Taylor added.

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  • China’s C919 jet faces turbulent skies amid US-China trade tensions

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    HONG KONG — China’s ambition to challenge Boeing and Airbus with its own homegrown passenger jet is running into turbulence, with deliveries of finished aircraft likely to fall far short of its target announced for this year.

    The C919 jet — a single-aisle passenger plane aiming to rival Boeing’s 737 and Airbus’ A320 – is made by state-owned aircraft manufacturer COMAC. Beijing is showcasing it as evidence of China’s technological advancement and progress in self-reliance, though it uses many Western sourced components.

    Trade friction with Washington threatens to prevent COMAC from securing core parts for the program that has been supported by huge Chinese government subsidies.

    “COMAC faces significant risk from the volatile policy environment, with its supply chains vulnerable to export restrictions and tit-for-tat measures between the U.S. and China,” said Max J. Zenglein, Asia-Pacific senior economist at The Conference Board think tank.

    The C919 has 48 major suppliers from the U.S. — including GE, Honeywell and Collins — 26 from Europe and 14 from China, according to analysts at the Bank of America. Trump threatened to impose new export controls on “critical” software to China after Beijing imposed stricter export controls on rare earths.

    “Existing choke points are being exploited in the deal making process between governments,” Zenglein said. “This is likely to continue as critical dependencies have become political bargaining chips.”

    Beijing has high hopes for the C919, which made its maiden commercial flight in 2023. The mid-sized jet is meant to help fill vast domestic demand for new aircraft over the next few decades. China hopes to expand sales beyond its borders and fly globally, including in Southeast Asia, Africa and Europe.

    COMAC delivered 13 C919s to Chinese carriers last year and only seven as of October this year, despite plans to ramp up production and deliver 30 jets in 2025, according to the aviation consultancy Cirium.

    China’s biggest state-owned airlines — Air China, China Eastern and China Southern — are the only commercial airlines currently flying a total of around 20 C919s.

    Trade tensions between the U.S. and China have “directly affected” delivery schedules for the C919, said Dan Taylor, head of consulting at aviation consultancy IBA. For one, output plans were disrupted when the U.S. suspended export licenses for the jet’s LEAP-1C engines around May, resuming them in July, he said.

    U.S.-controlled technology that needs export licensing for the LEAP-1C engines — jointly built by the U.S.’s GE Aerospace and France’s Safran -— means the C919’s engines require U.S. export clearance, Taylor said, making it “inherently sensitive to political shifts.”

    “Engine and avionics dependence on Western suppliers continues to expose the program to policy decisions beyond COMAC’s control,” Taylor explained.

    Geopolitical tensions alone are not the only cause for slower than expected production of the C919s. The program has been “marked by caution and prioritizing quality and safety, so there also may be some operational reasons for the slower production ramp up,” said Zenglein from The Conference Board.

    While “it has always been the aim to reduce the reliance on foreign components as quickly as possible” for the C919, Zenglein said, many analysts say it is a challenging process. China’s own engine alternative — the CJ-1000A under development by state-owned Aero Engine Corporation of China (AECC) — is still under testing, according to IBA.

    Several airlines outside of China, including AirAsia, have expressed interest in flying the C919, but a lack of international certification has so far prevented the C919 from flying beyond China. Certifications from the U.S. and the European Union’s aviation regulators could take years.

    For the C919 to succeed, it “needs to have each one of three things: good economics, a prompt global product support network, and certification from safety agencies”, said Richard Aboulafia, managing director of AeroDynamic Advisory. “Any one of these three alone doesn’t mean much,” he said.

    China will need 9,570 new passenger aircraft between 2025 and 2044, according to Airbus’ latest market forecast, more than 80% of them single-aisle jets like the C919.

    COMAC’s faces a growing challenge from Airbus, which is expanding its manufacturing capacity in China. A second assembly line is due to begin operating in 2026, allowing Airbus to increase its production of A320 single-aisle jets in China – an aircraft model similar to the C919.

    Analysts expect that it will take years for COMAC to break the Boeing-Airbus duopoly in global aircraft share. By the late 2020s, COMAC will likely grow within China and possibly establish regional exports, said IBA’s Taylor.

    In the near term, a lack of international certification will be “delaying any meaningful Western-market entry” for the jet and export control volatility will likely continue to undermine its global expansion plans, Taylor added.

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  • A blueprint for leaders: How Allegis Group unlocks, sparks and drives AI innovation – Microsoft in Business Blogs

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    At Allegis Group, empowerment is a mindset. As a global leader in workforce and business solutions, the organization has a common purpose: to create significant opportunities for people and companies to grow and thrive.  

    That purpose drives how Allegis Group operates both externally and internally. When generative AI began reshaping the business world, the organization didn’t wait on the sidelines. Instead, it leaned in and asked: 

     “How can AI help us work better and faster?” 

    What began as a spark of curiosity quickly ignited a movement, reaching HR, operations, IT and delivery teams to reimagine how work gets done. 

    Turning excitement into confidence  

    Here’s what made progress real: 

    • Education-first rollout. Teams got hands-on through demos, pilots and safe environments that made AI approachable. From rewriting Outlook emails with Microsoft 365 Copilot to extracting insights with Azure AI, employees were encouraged to ask, “what if?” and see what was possible. 
    • Leadership-driven transformation. Senior leaders didn’t just endorse AI, they championed it. With backing from the CIO and enterprise architects, AI became a clear priority, giving teams confidence to experiment and adopt new workflows. 
    • Culture of exploration. Curiosity was celebrated. Managers invited AI ideas into team discussions, and employees shared creative use cases that built momentum across departments. 

    “We weren’t focused just on leveraging the technology,” explains Pervez Nadeem, Chief Enterprise Architect at Allegis Group. “Our goal was to reshape processes, remove inefficiencies and free people from the routine tasks that can slow them down.” 

    Real change, real results 

    • Faster time-off requests. PTO calculations that previously took an average of 31 hours now close in just 13 hours with 100% accuracy, thanks to an AI-powered solution built on Azure AI.
    •  Smarter translation at scale. With the Azure AI-based Allegis Language Translation Assistant translations now happen in minutes, saving an estimated $1.5 million year-to-date and ensuring consistency across regions.
    • Everyday productivity. Administrative tasks are now streamlined with Copilot in Microsoft 365 apps and Teams, empowering employees to redirect their time and energy toward the work that matters most.
    • Better candidate experiences. As demand for digital skills accelerates, Allegis Group uses AI to match candidates with personalized job recommendations, speed up onboarding and improve communication, helping customers in every industry connect with top talent faster. 

    “AI is helping us move problems out of the backlog and tackle them faster,” says Anshuman Jain, Enterprise Architect for AI, Allegis Group. 

    Kelly Quick, Compliance Controller at one of Allegis Group’s companies adds: “AI also makes our work more efficient, giving us time back for critical thinking, deeper data analysis and better interactions with colleagues”. 

    The new mindset: AI as a co-pilot 

    For Allegis Group, this is just the beginning. With strategic support from Microsoft and implementation guidance from TEKsystems Global Services (TGS), Allegis Group’s internal systems integrator and a trusted Microsoft partner, the organization is building on its foundation with: 

    • Multi-agent solutions for complex workflows 
    • AI-powered training and onboarding experiences 
    • Intelligent search and knowledge assistance at scale 
    • Enterprise-wide innovation, where every new solution becomes a stepping stone for the next 

    At its core, Allegis Group’s AI journey shows that when people and technology work hand in hand, the results ripple outward. Customers benefit from faster placements, higher retention and cost savings. Candidates gain more personalized opportunities, smoother onboarding and stronger support throughout their careers.  

    Allegis Group_Assets_Quote 1

    By putting AI to work across its business, Allegis Group is reimagining how work gets done internally and reshaping the future of professional services.  

    Read the full case study to see the transformation in action.

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  • Super Micro Computer’s shares plunge after accounting firm resigns

    Super Micro Computer’s shares plunge after accounting firm resigns

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    NEW YORK — Shares of Super Micro Computer plunged more than 30% Wednesday morning, after the server maker disclosed that Ernst & Young had resigned as its public accounting firm.

    According to a regulatory filing from Super Micro, EY resigned while conducting an audit for the tech company’s most recent fiscal year. The accounting firm communicated concerns in July over issues like transparency and internal control related to financial reporting, Wednesday’s report notes, later prompting Super Micro’s board to enlist a review.

    Additional information received during this review then led EY to raise questions about whether Super Micro “demonstrates a commitment to integrity and ethical values,” the company added, as well as transparency and oversight independent of the CEO and other management.

    The Associated Press reached out to EY for statement Wednesday. Super Micro’s regulatory filing notes that EY’s resignation letter stated, in part, that it was “no longer be able to rely” on representations from the company’s management and audit committee — and concluded it could no longer provide audit services “in accordance with applicable law or professional obligations.”

    EY sent its resignation letter last week, per Wednesday’s filing. The audit would’ve been the firm’s first on Super Micro’s behalf.

    Super Micro noted that it disagreed with EY’s resignation, but recognized the decision was final. The company added that it “has taken the concerns expressed by EY seriously” and its review is ongoing.

    The accounting firm’s resignation arrives just two months after short-selling firm Hindenburg Research released a report alleging ample accounting manipulation at Super Micro, pointing to “glaring accounting red flags” and evidence of undisclosed transactions. It also accused Super Micro of rehiring top executives that were directly involved in a 2018 scandal. At the time of August’s report, Super Micro said it would not comment “on rumors and speculation.”

    In 2020, the Securities and Exchange Commission charged Super Micro with improper accounting for “prematurely recognizing revenue and understating expenses” beginning at least as early as fiscal 2015 to 2017. The company paid a $17.5 million civil penalty.

    Super Micro has been among tech companies recently riding a the artificial intelligence wave. Despite the company’s recent plummet, shares are still up about 20% year to date.

    In August, Super Micro reported fourth-quarter revenue of $5.31 billion, a more than 143% increase over the $2.18 billion it reported in the same quarter of 2023. The company said Wednesday that it would be providing a “business update” next week regarding for the start of the 2025 fiscal year.

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  • OpenAI has ‘full confidence’ in CEO Sam Altman after investigation, reinstates him to board

    OpenAI has ‘full confidence’ in CEO Sam Altman after investigation, reinstates him to board

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    OpenAI is reinstating CEO Sam Altman to its board of directors and said it has “full confidence” in his leadership after the conclusion of an outside investigation into the company’s turmoil.

    The ChatGPT maker tapped the law firm WilmerHale to look into what led the company to abruptly fire Altman in November, only to rehire him days later. After months of investigation, it found that Altman’s ouster was a “consequence of a breakdown in the relationship and loss of trust” between him and the prior board, OpenAI said in a summary of the findings Friday. It did not release the full report.

    OpenAI also announced it has added three women to its board of directors: Dr. Sue Desmond-Hellman, a former CEO of the Bill & Melinda Gates Foundation; Nicole Seligman, a former Sony general counsel; and Instacart CEO Fidji Simo.

    The actions are a way for the San Francisco-based artificial intelligence company to show investors and customers that it is trying to move past the internal conflicts that nearly destroyed it last year and made global headlines.

    “I’m pleased this whole thing is over,” Altman told reporters Friday, adding that he’s been disheartened to see “people with an agenda” leaking information to try to harm the company or its mission and “pit us against each other.” At the same time, he said he’s learned from the experience and apologized for a dispute with a former board member he could have handled “with more grace and care.”

    In a parting shot, two board members who voted to fire Altman before getting pushed out themselves wished the new board well but said accountability is paramount when building technology “as potentially world-changing” as what OpenAI is pursuing.

    “We hope the new board does its job in governing OpenAI and holding it accountable to the mission,” said a joint statement from ex-board members Helen Toner and Tasha McCauley. “As we told the investigators, deception, manipulation, and resistance to thorough oversight should be unacceptable.”

    For more than three months, OpenAI said little about what led its then-board of directors to fire Altman on Nov. 17. An announcement that day said Altman was “not consistently candid in his communications” in a way that hindered the board’s ability to exercise its responsibilities. He also was kicked off the board, along with its chairman, Greg Brockman, who responded by quitting his job as the company’s president.

    Much of OpenAI’s conflicts have been rooted in its unusual governance structure. Founded as a nonprofit with a mission to safely build futuristic AI that helps humanity, it is now a fast-growing big business still controlled by a nonprofit board bound to its original mission.

    The investigation found the prior board acted within its discretion. But it also determined that Altman’s “conduct did not mandate removal,” OpenAI said. It said both Altman and Brockman remained the right leaders for the company.

    “The review concluded there was a significant breakdown in trust between the prior board, and Sam and Greg,” Bret Taylor, the board’s chair, told reporters Friday. “And similarly concluded that the board acted in good faith, that the board believed at the time that its actions would mitigate some of the challenges that it perceived and didn’t anticipate some of the instability.”

    The dangers posed by increasingly powerful AI systems have long been a subject of debate among OpenAI’s founders and leaders. But citing the law firm’s findings, Taylor said Altman’s firing “did not arise out of concerns regarding product safety or security.”

    Nor was it about OpenAI’s finances or any statements made to investors, customers or business partners, Taylor said.

    Days after his surprise ouster, Altman and his supporters — with backing from most of OpenAI’s workforce and close business partner Microsoft — helped orchestrate a comeback that brought Altman and Brockman back to their executive roles and forced out board members Toner, a Georgetown University researcher; McCauley, a scientist at the RAND Corporation; and another co-founder, Ilya Sutskever. Sutskever kept his job as chief scientist and publicly expressed regret for his role in ousting Altman.

    “I think Ilya loves OpenAI,” Altman said Friday, saying he hopes they will keep working together but declining to answer a question about Sutskever’s current position at the company.

    Altman and Brockman did not regain their board seats when they rejoined the company in November. But an “initial” new board of three men was formed, led by Taylor, a former Salesforce and Facebook executive who also chaired Twitter’s board before Elon Musk took over the platform. The others are former U.S. Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo, the only member of the previous board to stay on.

    (Both Quora and Taylor’s new startup, Sierra, operate their own AI chatbots that rely in part on OpenAI technology.)

    After it retained the law firm in December, OpenAI said WilmerHale conducted dozens of interviews with the company’s prior board, current executives, advisers and other witnesses. The company also said the law firm reviewed thousands of documents and other corporate actions. WilmerHale didn’t immediately respond to a request for comment Friday.

    The board said it will also be making “improvements” to the company’s governance structure. It said it will adopt new corporate governance guidelines, strengthen the company’s policies around conflicts of interest, create a whistleblower hotline that will allow employees and contractors to submit anonymous reports and establish additional board committees.

    The company still has other troubles to contend with, including a lawsuit filed by Musk, who helped bankroll the early years of OpenAI and was a co-chair of its board after its 2015 founding. Musk alleges that the company is betraying its founding mission in pursuit of profits.

    Legal experts have expressed doubt about whether Musk’s arguments, centered around an alleged breach of contract, will hold up in court.

    But it has already forced open the company’s internal conflicts about its unusual governance structure, how “open” it should be about its research and how to pursue what’s known as artificial general intelligence, or AI systems that can perform just as well as — or even better than — humans in a wide variety of tasks.

    Taylor said Friday that OpenAI’s “mission-driven nonprofit” structure won’t be changing as it continues to pursue its vision for artificial general intelligence that benefits “all of humanity.”

    “Our duties are to the mission, first and foremost, but the company — this amazing company that we’re in right now — was created to serve that mission,” Taylor said.

    ___

    The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP’s text archives.

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  • OpenAI has ‘full confidence’ in CEO Sam Altman after investigation, reinstates him to board

    OpenAI has ‘full confidence’ in CEO Sam Altman after investigation, reinstates him to board

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    OpenAI is reinstating CEO Sam Altman to its board of directors and said it has “full confidence” in his leadership after the conclusion of an outside investigation into the company’s turmoil.

    The ChatGPT maker tapped the law firm WilmerHale to look into what led the company to abruptly fire Altman in November, only to rehire him days later. After months of investigation, it found that Altman’s ouster was a “consequence of a breakdown in the relationship and loss of trust” between him and the prior board, OpenAI said in a summary of the findings Friday. It did not release the full report.

    OpenAI also announced it has added three women to its board of directors: Dr. Sue Desmond-Hellman, a former CEO of the Bill & Melinda Gates Foundation; Nicole Seligman, a former Sony general counsel; and Instacart CEO Fidji Simo.

    The actions are a way for the San Francisco-based artificial intelligence company to show investors and customers that it is trying to move past the internal conflicts that nearly destroyed it last year and made global headlines.

    “I’m pleased this whole thing is over,” Altman told reporters Friday, adding that he’s been disheartened to see “people with an agenda” leaking information to try to harm the company or its mission and “pit us against each other.” At the same time, he said he’s learned from the experience and apologized for a dispute with a former board member he could have handled “with more grace and care.”

    In a parting shot, two board members who voted to fire Altman before getting pushed out themselves wished the new board well but said accountability is paramount when building technology “as potentially world-changing” as what OpenAI is pursuing.

    “We hope the new board does its job in governing OpenAI and holding it accountable to the mission,” said a joint statement from ex-board members Helen Toner and Tasha McCauley. “As we told the investigators, deception, manipulation, and resistance to thorough oversight should be unacceptable.”

    For more than three months, OpenAI said little about what led its then-board of directors to fire Altman on Nov. 17. An announcement that day said Altman was “not consistently candid in his communications” in a way that hindered the board’s ability to exercise its responsibilities. He also was kicked off the board, along with its chairman, Greg Brockman, who responded by quitting his job as the company’s president.

    Much of OpenAI’s conflicts have been rooted in its unusual governance structure. Founded as a nonprofit with a mission to safely build futuristic AI that helps humanity, it is now a fast-growing big business still controlled by a nonprofit board bound to its original mission.

    The investigation found the prior board acted within its discretion. But it also determined that Altman’s “conduct did not mandate removal,” OpenAI said. It said both Altman and Brockman remained the right leaders for the company.

    “The review concluded there was a significant breakdown in trust between the prior board, and Sam and Greg,” Bret Taylor, the board’s chair, told reporters Friday. “And similarly concluded that the board acted in good faith, that the board believed at the time that its actions would mitigate some of the challenges that it perceived and didn’t anticipate some of the instability.”

    The dangers posed by increasingly powerful AI systems have long been a subject of debate among OpenAI’s founders and leaders. But citing the law firm’s findings, Taylor said Altman’s firing “did not arise out of concerns regarding product safety or security.”

    Nor was it about OpenAI’s finances or any statements made to investors, customers or business partners, Taylor said.

    Days after his surprise ouster, Altman and his supporters — with backing from most of OpenAI’s workforce and close business partner Microsoft — helped orchestrate a comeback that brought Altman and Brockman back to their executive roles and forced out board members Toner, a Georgetown University researcher; McCauley, a scientist at the RAND Corporation; and another co-founder, Ilya Sutskever. Sutskever kept his job as chief scientist and publicly expressed regret for his role in ousting Altman.

    “I think Ilya loves OpenAI,” Altman said Friday, saying he hopes they will keep working together but declining to answer a question about Sutskever’s current position at the company.

    Altman and Brockman did not regain their board seats when they rejoined the company in November. But an “initial” new board of three men was formed, led by Taylor, a former Salesforce and Facebook executive who also chaired Twitter’s board before Elon Musk took over the platform. The others are former U.S. Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo, the only member of the previous board to stay on.

    (Both Quora and Taylor’s new startup, Sierra, operate their own AI chatbots that rely in part on OpenAI technology.)

    After it retained the law firm in December, OpenAI said WilmerHale conducted dozens of interviews with the company’s prior board, current executives, advisers and other witnesses. The company also said the law firm reviewed thousands of documents and other corporate actions. WilmerHale didn’t immediately respond to a request for comment Friday.

    The board said it will also be making “improvements” to the company’s governance structure. It said it will adopt new corporate governance guidelines, strengthen the company’s policies around conflicts of interest, create a whistleblower hotline that will allow employees and contractors to submit anonymous reports and establish additional board committees.

    The company still has other troubles to contend with, including a lawsuit filed by Musk, who helped bankroll the early years of OpenAI and was a co-chair of its board after its 2015 founding. Musk alleges that the company is betraying its founding mission in pursuit of profits.

    Legal experts have expressed doubt about whether Musk’s arguments, centered around an alleged breach of contract, will hold up in court.

    But it has already forced open the company’s internal conflicts about its unusual governance structure, how “open” it should be about its research and how to pursue what’s known as artificial general intelligence, or AI systems that can perform just as well as — or even better than — humans in a wide variety of tasks.

    Taylor said Friday that OpenAI’s “mission-driven nonprofit” structure won’t be changing as it continues to pursue its vision for artificial general intelligence that benefits “all of humanity.”

    “Our duties are to the mission, first and foremost, but the company — this amazing company that we’re in right now — was created to serve that mission,” Taylor said.

    ___

    The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP’s text archives.

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  • Trump Organization convicted in executive tax dodge scheme

    Trump Organization convicted in executive tax dodge scheme

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    NEW YORK — Donald Trump’s company was convicted of tax fraud on Tuesday in a case brought by the Manhattan District Attorney, a significant repudiation of financial practices at the former president’s business.

    The guilty verdict came on the second day of deliberations following a trial in which the Trump Organization was accused of being complicit in a scheme by top executives to avoid paying personal income taxes on job perks such as rent-free apartments and luxury cars.

    The conviction is a validation for New York prosecutors, who have spent three years investigating the former president and his businesses, though the penalties aren’t expected to be severe enough to jeopardize the future of Trump’s company.

    As punishment, the Trump Organization could be fined up to $1.6 million — a relatively small amount for a company of its size, though the conviction might make some of its future deals more complicated.

    Trump, who recently announced he was running for president again, has said the case against his company was part of a politically motivated “witch hunt” waged against him by vindictive Democrats.

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  • Walmart shooting raises need for violence prevention at work

    Walmart shooting raises need for violence prevention at work

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    NEW YORK — The mass shooting Wednesday at a Walmart in Virginia was only the latest example of a workplace shooting perpetrated by an employee.

    But while many companies provide active shooter training, experts say there is much less focus on how to prevent workplace violence, particularly how to identify and address worrisome behavior among employees.

    Workers far too often don’t know how to recognize warning signs, and even more crucially don’t know how to report suspicious behavior or feel empowered to do so, according to workplace safety and human resources experts.

    “We have built an industry around how to lock bad guys out. We have heavily invested in physical security measure like metal detectors, cameras and armed security guards,” said James Densley, professor of criminal justice at Metropolitan State University in St. Paul, Minnesota, and co-founder of the nonprofit and nonpartisan research group The Violence Project. But too often in workplace shootings, he said, “this is someone who already has access to the building.”

    The Walmart shooting in particular raised questions of whether employees feel empowered to speak up because it was a team leader who carried out the shooting.

    Identified by Walmart as 31-year-old Andre Bing, he opened fire on fellow employees in the break room of the Chesapeake store, killing six people and leaving six others wounded. Police said he then apparently killed himself.

    Employee Briana Tyler, who survived the shooting, said Bing appeared not to be aiming at anyone in particular. Tyler, who started at Walmart two months ago, said she never had a negative encounter with Bing, but others told her that he was “the manager to look out for.” She said Bing had a history of writing people up for no reason.

    Walmart launched a computer-based active shooter training in 2015, which focused on three pillars: avoid the danger, keep your distance and lastly, defend. Then, in 2019 after a mass shooting at an El Paso, Texas, store in which an outside gunman killed 22 people, Walmart addressed the threat to the public by discontinuing sales of certain kinds of ammunition and asked that customers no longer openly carry firearms in its stores. It now sells only hunting rifles and related ammunition.

    Walmart didn’t specifically respond on Wednesday to questions seeking more detail about its training and protocols to protect its own employees. The company only said that it routinely reviews its training policies and will continue to do so.

    Densley said that employers need to create open channels for workers to voice concerns about employees’ behavior, including confidential hotlines. He noted that too often attention is focused on the “red flags” and workers should be looking for the “yellow flags” — subtle changes in behavior, like increased anger or not showing up for work. Densley said managers need to work with those individuals to get them counseling and do regular check-ins.

    In fact, the Department of Homeland Security’s active shooting manual states that human resources officials have a responsibility to “create a system for reporting signs of potential violence behavior.” It also encourages employees to report concerning behavior such as increased absenteeism and repeated violation of company policies.

    But many employers may not have such prevention policies in place, said Liz Peterson, Quality Manager at the Society for Human Resource Management, an organization of more than 300,000 human resources professionals.

    She noted that in a 2019 SHRM survey of its members, 55% of HR professionals said they didn’t know if their organizations had policies to prevent workplace violence, and another 9% said they lacked such programs. That was in contrast to the 57% of HR managers who said they did have training on how to respond to violence.

    A recent federal government report examining workplace violence over three decades found that workplace homicides have risen in recent years, although they remain sharply down from a peak in the mid-1990s.

    Between 2014 and 2019, workplace homicides nationwide increased by 11% from 409 to 454. That was still down 58% from a peak of 1,080 in 1994, according to the report, which was released in July by the Departments of Labor, Justice and Health and Human Services. The report found that workplace homicide trends largely mirrored homicide trends nationwide.

    But the country’s spike in mass public shootings is raising awareness among employers of the need to address mental health in the workplace and prevent violence — and of the liabilities employers can face if they ignore warning signs, Peterson said.

    In one high-profile example, the family of a victim filed a wrongful death lawsuit earlier this year against the Northern California Transportation agency, alleging it failed to address the history of threatening behavior of an employee who shot and killed nine co-workers at a light railyard in San Jose in 2021.

    The transportation agency released more than 200 pages of emails and other documents showing the shooter, Samuel James Cassidy, had been the subject of four investigations into workplace conduct, and one worker had worried that Cassidy could “go postal.” That expression stems from one of the deadliest workplace shooting in U.S. history, when a postal worker shot and killed 14 workers in Edmond, Oklahoma, in 1986.

    “Workplace violence is a situation that you never think is going to happen to your organization until it does, and unfortunately, it’s important to prepare for them because they are becoming more commonplace,” Peterson said.

    ———

    This story has been updated to correct the location of Metropolitan State University. It’s in St. Paul, not DePaul, Minnesota.

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  • Walmart shooting raises need for violence prevention at work

    Walmart shooting raises need for violence prevention at work

    [ad_1]

    NEW YORK — The mass shooting Wednesday at a Walmart in Virginia was only the latest example of a workplace shooting perpetrated by an employee.

    But while many companies provide active shooting training, experts say there is much less focus on how to prevent workplace violence, particularly how to identify and address worrisome behavior among employees.

    Workers far too often don’t know how to recognize warning signs, and even more crucially don’t know how to report suspicious behavior or feel empowered to do so, according to workplace safety and human resources experts.

    “We have built an industry around how to lock bad guys out. We have heavily invested in physical security measure like metal detectors, cameras and armed security guards,” said James Densley, professor of criminal justice at Metropolitan State University in DePaul, Minnesota and co-founder of the nonprofit and nonpartisan research group The Violence Project. But too often in workplace shootings, he said, “this is someone who already has access to the building.”

    The Walmart shooting in particular raised questions of whether employees feel empowered to speak up because it was a team leader who carried out the shooting.

    Identified by Walmart as 31-year-old Andre Bing, he opened fire on fellow employees in the break room of the Chesapeake store, killing six people and leaving six others wounded. Police said he then apparently killed himself.

    Employee Briana Tyler, who survived the shooting, said Bing appeared not to be aiming at anyone in particular. Tyler, who started at Walmart two months ago, said she never had a negative encounter with Bing, but others told her that he was “the manager to look out for.” She said Bing had a history of writing people up for no reason.

    Walmart launched a computer-based active shooter training in 2015, which focused on three pillars: avoid the danger, keep your distance and lastly, defend. Then, in 2019 after a mass shooting at an El Paso, Texas, store in which an outside gunman killed 22 people, Walmart addressed the threat to the public by discontinuing sales of certain kinds of ammunition and asked that customers no longer openly carry firearms in its stores. It now sells only hunting rifles and related ammunition.

    Walmart didn’t specifically respond on Wednesday to questions seeking more detail about its training and protocols to protect its own employees. The company only said that it routinely reviews its training policies and will continue to do so.

    Densley said that employers need to create open channels for workers to voice concerns about employees’ behavior, including confidential hotlines. He noted that too often attention is focused on the “red flags” and workers should be looking for the “yellow flags” — subtle changes in behavior, like increased anger or not showing up for work. Densley said managers need to work with those individuals to get them counseling and do regular check-ins.

    In fact, the Department of Homeland Security’s active shooting manual states that human resources officials have a responsibility to “create a system for reporting signs of potential violence behavior.” It also encourages employees to report concerning behavior such as increased absenteeism and repeated violation of company policies.

    But many employers may not have such prevention policies in place, said Liz Peterson, Quality Manager at the Society for Human Resource Management, an organization of more than 300,000 human resources professionals.

    She noted that in a 2019 SHRM survey of its members, 55% of HR professionals said they didn’t know if their organizations had policies to prevent workplace violence, and another 9% said they lacked such programs. That was in contrast to the 57% of HR managers who said they did have training on how to respond to violence.

    A recent federal government report examining workplace violence over three decades found that workplace homicides have risen in recent years, although they remain sharply down from a peak in the mid-1990s.

    Between 2014 and 2019, workplace homicides nationwide increased by 11% from 409 to 454. That was still down 58% from a peak of 1,080 in 1994, according to the report, which was released in July by the Departments of Labor, Justice and Health and Human Services. The report found that workplace homicide trends largely mirrored homicide trends nationwide.

    But the country’s spike in mass public shootings is raising awareness among employers of the need to address mental health in the workplace and prevent violence — and of the liabilities employers can face if they ignore warning signs, Peterson said.

    In one high-profile example, the family of a victim filed a wrongful death lawsuit earlier this year against the Northern California Transportation agency, alleging it failed to address the history of threatening behavior of an employee who shot and killed nine co-workers at a light railyard in San Jose in 2021.

    The transportation agency released more than 200 pages of emails and other documents showing the shooter, Samuel James Cassidy, had been the subject of four investigations into workplace conduct, and one worker had worried that Cassidy could “go postal.” That expression stems from one of the deadliest workplace shooting in U.S. history, when a postal worker shot and killed 14 workers in Edmond, Oklahoma, in 1986.

    “Workplace violence is a situation that you never think is going to happen to your organization until it does, and unfortunately, it’s important to prepare for them because they are becoming more commonplace,” Peterson said.

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  • Walmart shooting raises need for violence prevention at work

    Walmart shooting raises need for violence prevention at work

    [ad_1]

    NEW YORK — The mass shooting Wednesday at a Walmart in Virginia was only the latest example of a workplace shooting perpetrated by an employee.

    But while many companies provide active shooting training, experts say there is much less focus on how to prevent workplace violence, particularly how to identify and address worrisome behavior among employees.

    Workers far too often don’t know how to recognize warning signs, and even more crucially don’t know how to report suspicious behavior or feel empowered to do so, according to workplace safety and human resources experts.

    “We have built an industry around how to lock bad guys out. We have heavily invested in physical security measure like metal detectors, cameras and armed security guards,” said James Densley, professor of criminal justice at Metropolitan State University in DePaul, Minnesota and co-founder of the nonprofit and nonpartisan research group The Violence Project. But too often in workplace shootings, he said, “this is someone who already has access to the building.”

    The Walmart shooting in particular raised questions of whether employees feel empowered to speak up because it was a manager who carried out the shooting.

    That manager, identified by Walmart as 31-year-old Andre Bing, opened fire on fellow employees in the break room of the Chesapeake store, killing six people and leaving six others wounded. Police said he then apparently killed himself.

    Employee Briana Tyler, who survived the shooting, said Bing appeared not to be aiming at anyone in particular. Tyler, who started at Walmart two months ago, said she never had a negative encounter with Bing, but others told her that he was “the manager to look out for.” She said Bing had a history of writing people up for no reason.

    Walmart launched a computer-based active shooter training in 2015, which focused on three pillars: avoid the danger, keep your distance and lastly, defend. Then, in 2019 after a mass shooting at an El Paso, Texas, store in which an outside gunman killed 22 people, Walmart addressed the threat to the public by discontinuing sales of certain kinds of ammunition and asked that customers no longer openly carry firearms in its stores. It now sells only hunting rifles and related ammunition.

    Walmart didn’t specifically respond on Wednesday to questions seeking more detail about its training and protocols to protect its own employees. The company only said that it routinely reviews its training policies and will continue to do so.

    Densley said that employers need to create open channels for workers to voice concerns about employees’ behavior, including confidential hotlines. He noted that too often attention is focused on the “red flags” and workers should be looking for the “yellow flags” — subtle changes in behavior, like increased anger or not showing up for work. Densley said managers need to work with those individuals to get them counseling and do regular check-ins.

    In fact, the Department of Homeland Security’s active shooting manual states that human resources officials have a responsibility to “create a system for reporting signs of potential violence behavior.” It also encourages employees to report concerning behavior such as increased absenteeism and repeated violation of company policies.

    But many employers may not have such prevention policies in place, said Liz Peterson, Quality Manager at the Society for Human Resource Management, an organization of more than 300,000 human resources professionals.

    She noted that in a 2019 SHRM survey of its members, 55% of HR professionals said they didn’t know if their organizations had policies to prevent workplace violence, and another 9% said they lacked such programs. That was in contrast to the 57% of HR managers who said they did have training on how to respond to violence.

    A recent federal government report examining workplace violence over three decades found that workplace homicides have risen in recent years, although they remain sharply down from a peak in the mid-1990s.

    Between 2014 and 2019, workplace homicides nationwide increased by 11% from 409 to 454. That was still down 58% from a peak of 1,080 in 1994, according to the report, which was released in July by the Departments of Labor, Justice and Health and Human Services. The report found that workplace homicide trends largely mirrored homicide trends nationwide.

    But the country’s spike in mass public shootings is raising awareness among employers of the need to address mental health in the workplace and prevent violence — and of the liabilities employers can face if they ignore warning signs, Peterson said.

    In one high-profile example, the family of a victim filed a wrongful death lawsuit earlier this year against the Northern California Transportation agency, alleging it failed to address the history of threatening behavior of an employee who shot and killed nine co-workers at a light railyard in San Jose in 2021.

    The transportation agency released more than 200 pages of emails and other documents showing the shooter, Samuel James Cassidy, had been the subject of four investigations into workplace conduct, and one worker had worried that Cassidy could “go postal.” That expression stems from one of the deadliest workplace shooting in U.S. history, when a postal worker shot and killed 14 workers in Edmond, Oklahoma, in 1986.

    “Workplace violence is a situation that you never think is going to happen to your organization until it does, and unfortunately, it’s important to prepare for them because they are becoming more commonplace,” Peterson said.

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  • Ringleaders in massive COVID fraud extradited to US

    Ringleaders in massive COVID fraud extradited to US

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    LOS ANGELES — A Los Angeles couple who fled to Europe after being convicted of running a fraud ring that stole $18 million in COVID-19 aid money were returned to the United States to face prison, authorities announced Friday.

    Richard Ayvazyan and his wife, Marietta Terabelian, were extradited from the Balkan country of Montenegro, where they were living in a luxury seaside villa before their arrest in February.

    They arrived in Los Angeles on Thursday, according to the U.S. Department of Justice.

    While they were on the run last year, a court in Los Angeles sentenced Ayvazyan to 17 years in federal prison, and Terabelian to six years.

    Prosecutors said the couple and six accomplices fraudulently applied for about 150 relief loans intended to help businesses and employees struggling during the COVID-19 pandemic and lockdown.

    They applied using fake identities or names belonging to dead or elderly people and foreign exchange students, prosecutors said.

    To back up the applications, they submitted phony tax documents and payroll records for fake businesses to lenders and the U.S. Small Business Administration, prosecutors said.

    The money was used for down payments on luxury homes in the Tarzana area of Los Angeles, suburban Glendale and the Palm Desert and to buy “gold coins, diamonds, jewelry, luxury watches, fine imported furnishings, designer handbags, clothing and a Harley-Davidson motorcycle,” said a statement from the U.S. Department of Justice.

    Ayvazyan and Terabelian were convicted in June 2021 of conspiracy to commit bank fraud and other federal crimes. Two months later, while free on bond, the couple cut off their ankle monitors and fled, leaving behind their three teenage children, authorities said.

    Unemployment fraud was a nationwide problem during the pandemic, as benefit applications overwhelmed state unemployment agencies. Criminals were able to buy stolen identity data on the dark web and use it to file a heap of phony claims.

    The federal Labor Department has said that about $87 billion in pandemic unemployment benefits could have been paid improperly nationwide, with a significant portion attributable to fraud. An Associated Press review in March 2021 found that estimates ranged from $11 billion in fraudulent payments in California to several hundred thousand dollars in states such as Alaska and Wyoming.

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  • Former tribal leader gets 3 years in casino bribery case

    Former tribal leader gets 3 years in casino bribery case

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    BOSTON — The former leader of a Massachusetts Native American tribe convicted of accepting bribes including exercise equipment and a weekend stay at a luxury hotel from an architectural firm working with the tribe to build a casino has been sentenced to three years in prison.

    Cedric Cromwell, former chair of the Mashpee Wampanoags, was also sentenced in U.S. District Court in Boston on Tuesday to a year of probation and was fined $25,000, according to prosecutors.

    David DeQuattro, 56, the owner of the Rhode Island architecture and design firm, was sentenced to a year of probation under home confinement and fined $50,000.

    The Cape Cod-based tribe, which currently has about 2,600 enrolled citizens, in an impact statement signed by current Chair Brian Weeden said it has been “irreparably harmed” by Cromwell’s conduct.

    “For over 400 years, the Tribe has fought to preserve its culture, lands and protect its people from constant exploitation and oppression,” Weeden wrote. “And yet, we are now facing the ultimate betrayal by one elected and entrusted to lead and act in the best interests of our Tribal Nation and future seven generations.”

    He noted that while Cromwell was enriching himself, tribal members “struggled under the pressures of increased homelessness, unemployment, alcohol and opioid addiction, and other traumas.”

    Cromwell, 57, apologized in court.

    “I will spend the rest of my life seeking redemption,” he said, The Boston Globe reported.

    DeQuatto’s attorney called his client’s actions an “aberration.”

    Cromwell, who also was the president of the tribe’s five-member gaming authority, received $10,000 from DeQuattro in November 2015 that was deposited into an account for a company called One Nation Development LLC, which Cromwell founded to help Native tribes with economic development, prosecutors said.

    But One Nation Development had no employees and Cromwell spent the money on personal expenses, prosecutors said.

    He asked for, and received from DeQuattro and his business partner, a $1,700 home gym in August 2016, prosecutors said.

    Cromwell also asked DeQuattro to pay for a three-night stay at a luxury Boston hotel in May 2017 so he could celebrate his birthday with someone he described as a “special guest.” The stay cost $1,800, prosecutors said.

    Cromwell was convicted in May of bribery and extortion charges. DeQuattro was convicted of a bribery charge. Cromwell still faces multiple counts of filing a false tax return.

    Meanhwile, plans for the proposed $1 billion casino in Taunton remain on hold.

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  • Average long-term US mortgage rate back above 7% this week

    Average long-term US mortgage rate back above 7% this week

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    WASHINGTON — The average long-term U.S. mortgage rate returned to the 20-year highs of two weeks ago when rates breached 7% for the first time since 2002.

    Mortgage buyer Freddie Mac reported Thursday that the average on the key 30-year rate rose to 7.08% from 6.95% last week. A year ago the average rate was 2.98%.

    The rate for a 15-year mortgage, popular with those refinancing their homes, climbed to 6.38% from 6.29% last week. It was 2.27% one year ago.

    Last week, the Federal Reserve raised its short-term lending rate by another 0.75 percentage points, three times its usual margin, for a fourth time this year as part of its inflation-fighting strategy. Its key rate now stands in a range of 3.75% to 4%.

    More increases are likely coming, though there is some hope that the Fed will dial them down as more evidence comes in that prices have peaked.

    The Labor Department reported Thursday that consumer inflation reached 7.7% in October from a year earlier, the smallest year-over-year rise since January. Excluding volatile food and energy prices, “core” inflation rose 6.3% in the past 12 months. The numbers were all lower than economists had expected.

    Thursday’s report raised the possibility that the Fed could decide to slow its rate hike, a prospect that sent stock prices jumping as soon as the data was released.

    Two weeks ago, the average long-term U.S. mortgage rate topped 7% for the first time in more than two decades, which combined with sky-high home prices, have crushed homebuyers’ purchasing power by adding hundreds of dollars to monthly mortgage payments.

    Sales of existing homes have declined for eight straight months as borrowing costs have become too big of an obstacle for many Americans already paying more for food, gas and other necessities. Additionally, many homeowners seeking to upgrade or change locations have held off listing their homes because they don’t want to jump into a higher rate on their next mortgage.

    The sagging housing market has prompted real estate companies to dial back their financial outlooks and shrink their workforces. Online real estate broker Redfin on Wednesday said it was cutting 862 employees and shutting down its instant-cash-offer subsidiary RedfinNow.

    Redfin also laid off 470 employees in June, blaming slowing home sales. Through attrition and layoffs, Redfin has slashed more than a quarter of its workforce on the assumption that the housing downturn will last “at least through 2023,” it said in a regulatory filing.

    Another online real estate broker, Compass, has laid off hundreds of workers this year.

    While mortgage rates don’t necessarily mirror the Fed’s rate increases, they tend to track the yield on the 10-year Treasury note. The yield is influenced by a variety of factors, including investors’ expectations for future inflation and global demand for U.S. Treasurys.

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  • Trump Org. trial off until Thursday after witness gets COVID

    Trump Org. trial off until Thursday after witness gets COVID

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    NEW YORK — A criminal trial involving tax fraud charges against Donald Trump’s company won’t resume until late next week at the earliest as a key witness continues to recover from COVID-19.

    Court spokesperson Lucian Chalfen said the trial, in state court in Manhattan, is slated to resume on Thursday — not Monday, as the judge had previously hoped.

    The Trump Organization trial was abruptly halted Tuesday when longtime company senior vice president and controller Jeffrey McConney tested positive for the virus.

    McConney was on the witness stand for the first two days of testimony, Monday and Tuesday. He coughed off and on as he walked prosecutors through the company’s bookkeeping and payroll practices.

    By Tuesday’s lunch break, McConney’s symptoms had worsened, prompting him to take a COVID test. Chalfen said he was not aware of anyone else involved in the case testing positive.

    If the trial resumes Thursday, it will be the only day the case is in court next week.

    Court is closed Tuesday for Election Day and Friday for Veterans Day. The judge, Juan Manuel Merchan, previously said he would not hold the trial on Wednesdays.

    Merchan has said he expected the trial to take at least four weeks. The prolonged delay could push it into mid-December or beyond.

    The Trump Organization is accused of helping some of its top executives avoid income taxes on lavish company-paid perks, including a Manhattan apartment and luxury cars.

    McConney was granted immunity to testify last year before a grand jury and again to testify at the criminal trial.

    Before Tuesday’s adjournment, McConney told jurors he altered company pay records to reduce one executive’s income tax bill and recounted how the company changed its pay practices and financial arrangements once Trump was elected president in 2016.

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  • Judge says he’ll appoint monitor for Donald Trump’s company

    Judge says he’ll appoint monitor for Donald Trump’s company

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    NEW YORK — A Manhattan judge said Thursday he will appoint an independent monitor for former President Donald Trump’s real estate empire, restricting his company’s ability to freely make deals, sell assets and change its corporate structure.

    Judge Arthur Engoron ordered the outside watchdog for the Trump Organization as he presides over a lawsuit in which New York Attorney General Letitia James alleges Trump and the company routinely misled banks and others about the value of prized assets, including golf courses and hotels bearing his name.

    James’ office says the Trump Organization is continuing to engage in fraud and has taken steps to dodge potential penalties from the lawsuit, such as incorporating a new entity in Delaware named Trump Organization LLC — almost identical to the original company’s name — in September, just before the lawsuit was filed.

    Engoron, in an 11-page order, barred the Trump Organization from selling or transferring any noncash assets without giving the court and James’ office 14 days notice. The to-be-named monitor will be charged with ensuring the company’s compliance and will immediately report any violations to the court and lawyers for both sides.

    The Trump Organization must also grant the monitor access to its financial statements, asset valuations and other disclosures, must provide a full and accurate description of the company’s structure and must give the monitor at least 30 days notice of any potential restructuring, refinancing or asset sales, Engoron said.

    The company must also pay for the monitor, he said.

    Engoron’s decision to appoint a monitor is just the latest ruling he’s made against Trump or his interest. While presiding over disputes over subpoenas issued in James’ investigation, the judge, a Democrat, held Trump in contempt and fined him $110,000 after he was slow to turn over documents, and he forced him to sit for a deposition. In that testimony, Trump invoked his Fifth Amendment protection against self-incrimination more than 400 times.

    James, a Democrat, is seeking $250 million and a permanent ban on Trump, a Republican, doing business in the state. In the interim, she wants an independent monitor to review and sign off on some of the company’s core business decisions, including any asset sales or transfers and potential corporate restructuring.

    “Our goal in doing this is not to impact the day-to-day operations of the Trump Organization,” said James’ senior enforcement counsel, Kevin Wallace. He said the desired oversight would be “limited” and wouldn’t involve intricacies, such as how many rounds of golf or hotel rooms they were booking in a given year.

    “The Trump Organization has a persistent record of not complying with existing court orders,” Wallace said. “It should not be incumbent on the court or the attorney general to spend the next year looking over their shoulder, making sure assets aren’t sold or the company restructured.”

    Trump sued James in Florida on Wednesday, seeking to block her from having any oversight over the family trust that controls his company. Trump’s 35-page complaint rehashed some claims from his previously dismissed lawsuit against James in federal court in New York, including that her investigation of him is a “political witch hunt.”

    Wallace said at Thursday’s hearing that James’ office is seeking to stop “fraudulent activities that are ongoing at the Trump Organization” and wants safeguards in place so that the company can’t just sell off assets, such as Trump Tower and an office building at 40 Wall Street, that could eventually be used to pay a potential lawsuit judgment.

    Trump Organization lawyer Christopher Kise responded that the company has “no intention” to divest those properties, which together he says conservatively have a value of at least $250 million. The “Trump entities are not going anywhere,” he added.

    Kise argued that James’ lawsuit was much ado about common, good-faith disagreements in the real estate industry. If banks that loaned Trump money felt he or the company had acted improperly, they would have spoken up, Kise said.

    “There’s no problem. There’s no case here,” Kise said. “It’s mind-numbing that we’re going to have a receiver insert himself or herself into these complex transactions instead of the owner of this real estate.”

    Engoron took issue with at least one aspect of Kise’s reasoning, asking him if there was really a “good-faith disagreement” when Trump claimed his Trump Tower penthouse was three times its actual size, and $200 million more valuable.

    As for the new Trump entity that drew concern from James’ office, Kise said the company — listed in a New York corporate filing as Trump Organization II — had nothing to do with dodging potential penalties from James’ lawsuit, but rather “consolidation of payroll issues that have arisen in other contexts.”

    Kise didn’t offer additional details. The Trump Organization’s payroll practices are among the issues being raised at the company’s Manhattan criminal fraud trial, which was halted Tuesday and is expected to resume Monday after a witness tested positive for COVID-19.

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    Follow Michael Sisak on Twitter at twitter.com/mikesisak

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