Tuesday, April 1, 2003

Business Digest

PayPal accused of money laundering

SAN JOSE, Calif. - Online auctioneer EBay Inc. said its PayPal unit is accused of breaking an antiterrorism money-laundering law for processing payments for Internet casinos.

A federal prosecutor in Missouri contends PayPal violated the act by servicing Web gambling sites during a nine-month period and should forfeit any profit and interest earned, EBay said in a regulatory filing. The law, known as the USA Patriot Act, prohibits the transmission of funds derived from a criminal offense.

EBay bought PayPal in October for $1.5 billion and shut down the company's gambling business because of regulatory issues.

Further job cuts by bankrupt Kmart

ROYAL OAK, Mich. - Kmart Corp. is eliminating 660 more jobs as part of the bankrupt retailer's efforts to cut costs and reduce the size of its operations.

The cuts include 400 jobs at headquarters and 123 corporate positions around the country. Kmart plans to exit Chapter 11 protection in about a month.

Best Buy intends to sell lagging Musicland

MINNEAPOLIS - Best Buy Co. said Monday that it wants to sell its Musicland business, saying the subsidiary has sustained declines in CD sales and hasn't performed as well as expected in selling consumer electronics.

Best Buy, based in Minneapolis, is the nation's leading retailer of consumer electronics, computers, entertainment software and appliances.

In January, Best Buy announced the closing of about 110 Sam Goody and Suncoast stores, citing a slowdown in mall traffic.

Best Buy paid nearly $700 million for Musicland two years ago.

Disability insurer fires exec after restatement

NASHVILLE, Tenn. - UnumProvident Corp. fired Harold Chandler as chairman, chief executive and president Monday as part of an effort to restore confidence in the disability insurer which recently restated three years of earnings.

Chandler's firing comes a week after UnumProvident said it would reduce earnings by $29.1 million for 2000, 2001 and 2002 to resolve concerns of the Securities and Exchange Commission related to its investment disclosures.

But the company continues to face hundreds of lawsuits from policy holders who charge their claims were routinely denied, and Tennessee is investigating the company's claims handling.

T-bill rate lower in weekly auction

WASHINGTON - Interest rates on short-term Treasury securities fell in Monday's auction.

The Treasury Department sold $16 billion in three-month bills at a discount rate of 1.100 percent, down from 1.150 percent last week. An additional $17 billion was sold in six-month bills at a rate of 1.090 percent, down from 1.150 percent.

Both the three-month and six-month rates were the lowest since March 10, when the bills sold for 1.055 percent and 1.030 percent, respectively.

WorldCom earnings may be revised again

CLINTON, Miss. - WorldCom Inc., which filed the largest U.S. bankruptcy last year, has uncovered $11 billion in overstated earnings, $2 billion more than what has been publicly disclosed, sources said. WorldCom, the No. 2 U.S. long-distance telephone company, likely will announce by June that it will restate earnings to reflect the errors, which date back to 1999.

- From wire reports

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Business Digest