S&P; faces lawsuit from U.S. Justice Department for false claims

The United States Justice Department is suing the S&P; bond-rating agency for false and inaccurate reports on mortgage investments. The Justice Department announced Tuesday that the lawsuit would be for $5 billion in civil penalties.

S&P; is being accused of lying about mortgage ratings to bolster investor support from 2004 to 2007, resulting in great personal risk to buyers and $5 billion in lost debt obligations. During that period, almost every mortgage investment S&P; rated failed, according to an article published Tuesday on CNN.

S&P; released a statement calling the lawsuit “meritless” and denies fraudulent mortgage ratings.

The lawsuit is ongoing and the Justice Department declined to comment on whether or not more rating agencies will be receiving lawsuits.

BP to possibly challenge oil spill claims

BP is considering not paying over $34 billion in lawsuit claims surrounding the 2010 oil spill. Gulf states such as Florida, Alabama and Mississippi have all submitted claims for damages and losses, according to a Tuesday L.A. Times article.

The latest financial information released Tuesday by BP contained the numbers and a statement claiming BP “considers the methodologies used to calculate these claims to be seriously flawed, not supported by the legislation and to substantially overstate the claims.”

The 2010 oil spill resulted in the deaths of 11 people and an emergency shutdown of several coastal fisheries and factories. BP stated that they are willing to settle the claims, but only on more “reasonable” terms.

2012 gas prices set records

The Energy Department’s newest statement reports that Americans spend 4 percent of their yearly income on gasoline, the highest amount in four years. The last outstanding spike in gas was in 2008, and before that prices had not been that high in 30 years.

Last year, the national average price for gas was $3.60, breaking the 2011 record. Americans put approximately $2,912 of gas in their car last year, and the number is expected to rise, even though American citizens are buying less gasoline yearly than in the past couple years.

Tense relations with Middle Eastern countries, natural disasters and strikes have been cited as the cause for current gas spikes.

A CNN article published Monday cited the Energy Department’s statement, reporting a record $479 billion spent on gasoline in 2012.

Major credit card scheme busted

A 9-year-long credit card fraud scam was cracked by the U.S. Justice Department. A USA Today article published Tuesday announced that 18 people were charged with at least $200 million in fraudulent charges.

The scam started in 2003 when credit profiles were created under false identities. The alleged scammers made minor charges and paid them on time to build enough credit to make larger charges.

The scam developed into over 7,000 false accounts with 25,000 credit cards, all making purchases that were never paid back. The accounts used fake names, credit scores and IDs. The numbers make this one of the largest credit card scam busts ever made by the Justice Department.

FBI Special Agent James Simpson said that the estimate of $200 million in losses is expected to grow as calculations continue.

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