Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.law,americast.usa-today.law From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: law Mon, Oct 19 1992 Date: Mon, 19 Oct 92 04:38:13 EDT Message-ID: 10-19 0000 DECISIONLINE: Business Law USA TODAY Update Oct. 19, 1992 Source: USA TODAY:Gannett National Information Network IBM SUES OVER COUNTERFEITS: IBM Friday sued seven competitors and five individuals in federal district court in Charlotte, N.C. Bloomberg Business News reported that IBM PC alleged the competitors distributed counterfeit products and bootlegged components that use IBM microcodes. The company sought an injunction and unspecified monetary damages. No trial date was set. (For more, see special IBM package below.) SILVERADO OWNER PLEADS GUILTY: The majority owner of the Silverado savings and loan pleaded guilty Friday to a felony charge of misapplying nearly $100,000 in the failed thrift's funds in 1986. Regulators estimate Silverado's 1988 failure debacle will cost taxpayers $1 billion. W. James Metz, 67, entered the plea before U.S. District Judge Jim Carrigan, who ordered a pre-sentence investigation. No sentencing date was set. SILVERADO CHAIRMAN ALSO CHARGED: Majority owner W. James Metz of Silverado savings and loan, who pleaded guilty Friday to misapplying funds, is the second Silverado official indicted by a federal grand jury investigating the thrift's collapse. Former Silverado chairman Michael Wise is accused of diverting part of a $1.45 million loan. Metz is expected to receive less than the maximum five years in prison and $250,000. NAVISTAR DROPS BENEFITS SUIT: Navistar International Corp. Friday withdrew a lawsuit to reduce health-care benefits for 40,000 retirees. The attempt would have saved the Chicago manufacturer of trucks, engines and school buses about $90 million a year. Navistar said that instead of suing, it would negotiate with the United Auto Workers. The company and the union hoped to reach an agreement by early December. LITIGATION EXTENSION UNKNOWN: Many Californians who suffered property losses in last October's Oakland fire are needlessly worried that the state's one-year limit on suing insurers has expired, says David Fountain of the Personal Insurance Federation of California. California's Supreme Court has ruled that the one year period stops between the filing of a claim and its denial, extending the time in which policyholders may sue. SECURITY SAVINGS & LOAN SEIZED: The Office of Thrift Supervision Friday seized the Security Savings & Loan Association in Jackson, Miss. The thrift with $275.1 million assets was earlier involved in a court fight with the federal office. The thrift had expanded in 1984 and 1985 by taking over assets from other thrifts, then fought to have $28.2 million counted as supervisory goodwill in determining its capital. BLUE CROSS TO PAY FINE: Blue Cross and Blue Shield of Mississippi has agreed to pay a $690,000 fine, the Department of Justice said Friday. The payment settles charges that the insurer improperly kept money owed to the federal government. The charges stem from Blue Cross' administration of a government program for members of the Armed Forces in Mississippi. GROCER GUILTY OF LAUNDERING: A grocer in Oakland, Calif., Friday was sentenced to 10 months in a halfway house and ordered to pay a $3,000 fine for money laundering. Yahya A. Mohammed pleaded guilty to one count of a five-count indictment returned in January. He arranged bank deposits of just under $10,000 - the amount for which the Internal Revenue Service must be notified. BAD FOOD RULES DON'T WORK: A Congressional investigative agency has found 4% of imported foods contaminated with pesticides, according to a General Accounting Office report out Friday. The report also said punishment for those violations of federal regulations is not severe enough to make violators stop. The Food and Drug Administration tests about 1% of imported food. FDIC TAKES OVER BANK: The Federal Deposit Insurance Corp. Friday took over Universal Bank, based in Lanham, Md. The FDIC will pay off $25.1 million in deposits held in 1,500 accounts at the bank. It also will make an advance payment to unsecured creditors, including uninsured depositors. That last group equals 56% of uninsured claims. SPECIAL PACKAGE ON IBM: CHARLOTTE COMPANY IN LAWSUIT: The competitors that IBM sued Friday for counterfeiting include a Charlotte, N.C., company, American Data Co. The suit was filed in Charlotte. Others: Brookwood Computer Industries Inc., Alpharetta, Ga.; Classicblue Computer Services of Randolph, N.J.; Com-Gear Unlimited Inc. of Canton, Ga.; Five Star Computer Services Inc. of Carrollton, Texas; and Savon Systems Inc. of East Setauket, N.Y. PARTS WERE CANNIBALIZED: In a statement, IBM PC charged the defendants cannibalized IBM parts to make circuit cards for controllers that PCs use to communicate with computer networks. The company alleged fake part numbers and labels were affixed to many of the controllers to make them appear to be genuine. The company also alleged that the counterfeit cards didn't meet IBM standards. CARDS FOR 3174 CONTROLLERS: The specific circuit cards in question are for IBM 3174 Establishment Controllers. In most instances, illegally copied IBM Licensed Internal Code was also distributed. The 3174 Establishment Controller is a key component of computer networks performing critical applications such as airline reservations, patient information systems in hospitals, and electronic banking. IBM WANTS INJUNCTION, MONEY: IBM is seeking temporary and permanent injunctive relief, as well as monetary damages from the seven corporate defendants and the five principals named in the suit. "Customers expect quality, excellence and customer service when they buy IBM products," said Richard Anderson of IBM. The company is continuing to investigate facts surrounding other third parties. (End of package.) Business Law Editor: Beth Mann. (919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM