Business briefs
By NewsPress Now
Authorities
arrest man allegedly running cybercrime botnet
WASHINGTON | An international law enforcement team has arrested a Chinese national and disrupted a major botnet that officials said he ran for nearly a decade, amassing at least $99 million in profits by reselling access to criminals who used it for identity theft, child exploitation, and financial fraud, including pandemic relief scams.
The U.S. Department of Justice quoted FBI Director Christopher Wray as saying Wednesday that the “911 S5” botnet — a network of malware-infected computers in nearly 200 countries — was likely the world’s largest.
Justice said in a news release that Yunhe Wang, 35, was arrested May 24. Wang was arrested in Singapore, and search warrants were executed there and in Thailand, the FBI’s deputy assistant director for cyber operations, Brett Leatherman, said in a LinkedIn post. Authorities also seized $29 million in cryptocurrency, Leatherman said.
Cybercriminals used Wang’s network of zombie residential computers to steal “billions of dollars from financial institutions, credit card issuers and accountholders, and federal lending programs since 2014,” according to an indictment filed in Texas’ eastern district.
The administrator, Wang, sold access to the 19 million Windows computers he hijacked — more than 613,000 in the United States — to criminals who “used that access to commit a staggering array of crimes that victimized children, threatened people’s safety and defrauded financial institutions and federal lending programs,” U.S. Attorney General Merrick Garland said in announcing the takedown.
He said criminals who purchased access to the zombie network from Wang were responsible for more than $5.9 billion in estimated losses due to fraud against relief programs. Officials estimated 560,000 fraudulent unemployment insurance claims originated from compromised IP addresses.
Wang allegedly managed the botnet through 150 dedicated servers, half of them leased from U.S.-based online service providers.
The indictment says Wang used his illicit gains to purchase 21 properties in the United States, China, Singapore, Thailand, the United Arab Emirates and St. Kitts and Nevis, where it said he obtained citizenship through investment.
In its news release, the Justice Department thanked police and other authorities in Singapore and Thailand for their assistance.
Mortgage rates back above 7%
LOS ANGELES | The average rate on a 30-year mortgage moved back above 7% this week, a setback for home shoppers at a time when the U.S. housing market is already slowing under the strain of elevated home loan borrowing costs and rising prices.
The rate rose to 7.03% from 6.94% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.79%.
This is the first increase after a three-week pullback. Higher mortgage rates can add hundreds of dollars a month in costs for borrowers, limiting homebuyers’ purchasing options.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, pushing up the average rate to 6.36% from 6.24% last week. A year ago, it averaged 6.18%, Freddie Mac said.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Federal Reserve’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Yields climbed earlier this week on worries about tepid demand for Treasury bonds following several U.S. government auctions and a surprising report showing confidence among U.S. consumers is strengthening. Economists had been expecting it to show a drop in confidence.
The Fed has been holding the federal funds rate at the highest level in more than two decades in hopes of grinding down on the economy enough to get high inflation fully under control. The central bank has maintained it doesn’t plan to cut interest rates until it has greater confidence that price increases are slowing sustainably to its 2% target.
“This reality, as well as economic signals that have moved sideways over the last few weeks, have resulted in mortgage rates drifting higher as markets continue to dial back expectations of interest rate cuts,” said Sam Khater, Freddie Mac’s chief economist.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage stayed below 7% this year until April. Even with the declines earlier this month, the rate remains well above where it was just two years ago at 5.09%.
The overall uptick in rates have been an unwelcome development for home shoppers in the midst of the spring homebuying season, traditionally the busiest time of the year for home sales. On average, more than one-third of all homes sold in a given year are purchased between March and June.
Sales of previously occupied U.S. homes fell in March and April as home shoppers contended with rising mortgage rates and prices. Sales of new homes also slowed in April, falling 7.7% from a year earlier, as borrowing costs slowed.
New data on contract signings for U.S. homes, a bellwether for future home sales, point to potentially further slowing of home sales.
The National Association of Realtor’s pending home sales index fell 7.7% in April from the previous month, the trade group said Thursday. April’s drop in pending home sales is the first since January.
“The impact of escalating interest rates throughout April dampened homebuying, even with more inventory in the market,” said Lawrence Yun, the NAR’s chief economist. “But the Federal Reserve’s anticipated rate cut later this year should lead to better conditions, with improved affordability and more supply.”
A lag of a month or two usually exists between when a contract is signed and when the home sale is finalized. That suggests a possible pullback in sales of previously occupied U.S. homes for May.
As rates have ticked higher, so have the monthly payments home shoppers need to take on when applying for a mortgage.
The national median monthly payment listed on home loan applications was $2,256 in April, a 2.5% increase from the previous month and 6.8% higher than what it was a year earlier, according to the Mortgage Bankers Association.
Medline recalls
1.5 million
adult bed rails
NEW YORK | Medical supply company Medline Industries is recalling some 1.5 million portable adult bed rails across the U.S. and Canada, following two reports of entrapment deaths associated with the products.
The recall impacts two models of Medline’s “Bed Assist Bars.” According to a Thursday announcement from the U.S. Consumer Product Safety Commission, users of these bed rails can become entrapped within the bed rail itself or between the product and the side of a mattress when it’s attached to a bed.
This poses “a serious entrapment hazard and risk of death by asphyxiation,” the CPSC notes.
To date, the commission added, Medline has received two reports of entrapment deaths associated with the recalled Bed Assist Bars in the U.S — involving a 76-year-old woman who died in an Iowa senior nursing facility in 2019, and a 87-year-old woman who died at a South Carolina residential care facility in 2023.
One additional injury in the U.S. has also been reported, according a Health Canada announcement. No injuries or incidents in Canada were reported to Medline as of Monday, Health Canada said.
Medline said in a statement that it understands “that in the instances of reported entrapment deaths associated with the bed assist bars, the bed rails were not securely attached to the bed and the users became entrapped between the rail and mattress.”
The company based in Northfield, Illinois, said it encourages all customers to read warnings and instructions of its products. Still, it said it’s important for impacted customers to participate in this recall — noting that it had worked closely with the CPSC and “fully supports the agency’s commitment to consumer safety.”
Medline sold about 1.5 million of the now-recalled Bed Assist Bars from July 2009 through March 2024 in the U.S. — through its own websites and major retailers online, including Amazon and Walmart. They cost between $32 and $64. More than 5,500 were additionally sold in Canada between February 2013 and March 2024.
The recalled bed rails, which were manufactured in China, can be identified by two model numbers: MDS6800BA and MDS6800BAH.
The CPSC and Health Canada urges consumers in possession of these products to stop using them immediately — and contact Medline to request a refund.
The number
of Americans applying for jobless benefits inches up
The number of Americans applying for unemployment benefits ticked up last week, but layoffs remain historically low in the face of lingering inflation and high interest rates.
Jobless claims for the week ending May 25 rose by 3,000 to 219,000, up from 216,000 the week before, the Labor Department reported Thursday.
The four-week average of claims, which quiets some of the week-to-week noise, also rose modestly to 222,500. That’s an increase of 2,500 from the previous week.
Weekly unemployment claims are broadly interpreted as a proxy for the number of U.S. layoffs in a given week and a sign of where the job market is headed. They have remained at historically low levels since millions of jobs were lost when the COVID-19 pandemic hit the U.S. in the spring of 2020.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in a bid to stifle the four-decade high inflation that took hold after the economy rebounded from the COVID-19 recession of 2020. The Fed’s intention was to cool off a red-hot labor market and slow wage growth, which can fuel inflation.
Many economists had expected the rapid rate hikes would trigger a recession, but that’s been avoided so far thanks to strong consumer demand and sturdier-than-expected labor market.
In April, U.S. employers added just 175,000 jobs, the fewest in six months and a sign that the labor market may be finally cooling off. The unemployment rate inched back up to 3.9% from 3.8% and has now remained below 4% for 27 straight months, the longest such streak since the 1960s.
The government also recently reported 8.5 million job openings in March, the lowest number of vacancies in three years.
Moderation in the pace of hiring, along with a slowdown in wage growth, could give the Fed the data its been seeking to finally bring interest rates back down. A cooler reading on consumer inflation in April could also play into the Fed’s next rate decision.
Though layoffs remain at low levels, companies have been announcing more job cuts recently, mostly across technology and media. Google parent company Alphabet, Apple and eBay have all recently announced layoffs.
Outside of tech and media, Walmart, Peloton, Stellantis, Nike and Tesla have recently announced job cuts.
In total, 1.79 million Americans were collecting jobless benefits during the week that ended May 18. That’s an increase of 4,000 from the previous week.
—From AP reports
