The Charlotte Observer from Charlotte, North Carolina • A8

8A Thursday, June 11, 2009 charlotteobserver.com The Charlotte ObserverBUSINESS INTEREST RATES The stock market has a new priority: interest rates. Stocks fell moderately Wednesday after the government sold $19 billion in 10-year Treasury notes in a relatively weak auction. The yield on the benchmark 10-year Treasury note rose for the fourth time in five days, jumping to 3.96 percent from 3.86 percent late Tuesday. That helped send stocks broadly lower, with the Dow Jones average losing 24 points. Investors are concerned the debt load will lead to higher inflation and soaring interest rates.

Higher interest rates could hamper the recovery by rais- ing borrowing costs for consumers, while inflation could also discourage them from spending. ASSOCIATED PRESS BANKING Citigroup Inc. has finalized an agreement with the federal government that will recapitalize the company with $58 billion of new common stock and make the U.S. taxpayer its largest shareholder, the bank said Wednesday. At the same time, Citi also unveiled an aggressive right offering, known as a aimed at preserving tax loss benefits for years to come.

Moving to bolster its capitalization, Citigroup unveiled an agreement under which the government will exchange up to $25 billion of the preferred securities for interim se- curities and warrants. The deal puts a conversion price of $3.25 a share on Citi common stock. MARKETWATCH Business Digest Today marks the 50th anniversary of Honda Motor presence in the United States. Above is the first import car, a 1967 N600, with a two-cylinder engine and a sticker price of $1,295. The company initially sold motorcycles in the U.S.

ASSOCIATED PRESS PHOTO er TVs that capture digital sig- nals, or who have cable, satel- lite or other pay services, do not need converter boxes. Groups most likely to lose reception Friday include the elderly, lower-income families, the handicapped and homes where English is little spoken, Federal Communications Commission spokeswoman Edie Herman said. She said people who lose re- ception will need a converter box or a more costly upgrade to a pay service. A govern- ment-sponsored coupon pro- gram to help defray converter costs runs through July. Delayed from February Analog is the name for the TV transmission system in use since the 1940s.

It is being re- placed by digital transmis- sions, a data burst that takes up significantly less space on the broadcast spectrum and deliv- ers better audio and pictures. Feb. 17 had been set as the date for the switchover nation- ally. But the federal govern- ment decided to extend the deadline so more viewers could make the adjustment. Most of commer- cial stations put off the conver- sion until this week.

WAXN (Channel 64) made the switch in February because it broadcasts on a frequency that the Department of Home- land Security wants to use for communications. Public TV stations WTVI (Channel 42) and WNSC (Channel 30) also made the switch at that time. A few stations, like WJZY (Channel 46) in Charlotte and WRAL (Channel 5) in Raleigh, will continue to send out an an- alog signal for another month in what is being called the program, said Shawn Harris, station manager for Channel 46. Their analog signal will broadcast a continu- ous loop giving DTV conver- sion information in English and Spanish. On May 21, the FCC asked stations to put up a telephone number on analog only for questions that rang into an FCC call center.

Matt Nodine, who is overseeing the outreach program in the south- east, said 55,000 calls came in that day to the DTV call center, a substantial spike. anticipate some recep- tion problems for some peo- said Nodine, who grew up in the Charlotte area. bly less than 2 percent will lose certain stations accus- tomed to Particularly affected will be people in rural areas or those who are able to pick up distant stations, such as WIS (Channel 10) in Columbia, though with fuzzy reception. Digital signals have a effect, meaning that you either get the full sig- nal or nothing at all. Government officials have said they are bracing for a slew of calls Friday.

Will it work? At the Shamrock Senior Center in Charlotte, Bogdana Kyryk said someone came to connect her converter box through a program the center used. The center used federal and other grants to provide the assistance for seniors. Others did it themselves, in- cluding Carol Lewis of Mint Hill. pretty sure work after the 71-year-old Lewis said. put it this way: It As for Jim and Betty Lilley, they got their boxes in place through the South Iredell Se- nior Center, which also had re- lied on the assistance grants.

They bought two more box- es this week using extra con- verter coupons. They gave one to a friend and the other to the senior center as thanks. The couple, married 62 years this month, said they mainly watch the news, and we glue ourselves to the Betty said. love our Jim added. WHEN SWITCH Here is when local sta- tions intend to switch to all-digital broadcasting Fri- day.

WBTV (Channel 3, CBS): 5:59 a.m. WSOC (Channel 9, ABC): 1 p.m. WCCB (Channel 18, Fox): 8 a.m. WCNC (Channel 36, NBC): 2:05 a.m. WJZY (Channel 46, CW): 1 p.m.

WMYT (Channel 55, MyTV): 1 p.m. WUNG (Channel 58, UNC TV): 12:01 a.m. FOR TECHNICAL HELP A toll-free, 24-hour hot line is available for viewers who have questions about the digital transition or need advice on hooking up con- verter boxes. In North Carolina: 888- 388-1733. In South Carolina: 877- 388-8992.

Online: www.dtv.gov; www.dtv-setup.com. RDTTS, a company that received an FCC contract to offer free installation or technical support, can be reached at 877-842-2585. Common questions about the digital switch Q. Why do I have to switch? On Friday, all television stations will complete the transition to broadcasting digital signals. That means televisions receiving only analog signals generally those older than two years and not using cable or satel- lite service work as usual anymore.

Q. Am I ready? If you receive free, analog TV broadcasts with a rooftop antenna (or your TV will stop receiving those signals. In order to receive digital signals instead, you will need to get a convert- er box. If you subscribe to a paid cable or satellite service or you have a digital TV, you should be ready for the switch. Q.

How do I get a converter box? Boxes are available at sev- eral retailers, such as Target and Best Buy. Boxes are $40 or more, and you can use government-issued coupons to pay for them. The govern- ment will issue two $40 cou- pons per household to go toward new converter boxes. SEATTLE TIMES DIGITAL from 7A JEFF WILLHELM Jim and Betty Lilley of Mooresville are now ready for the conversion to digital signals that is coming Friday. By Rick Rothacker RushmoreDrive.com, a Charlotte-based search en- gine aimed at the black community, is closing Fri- day after about a year in business, a company spokesman confirmed Wednesday.

The company, headquar- tered in Ballan- tyne area and owned by me- dia conglomerate terActiveCorp, is closing as of our continued ef- fort to rationalize the IAC emerging IAC spokeswoman Stacy Simp- son said. New York-based IAC has also sold off some of its younger Web proper- ties, she said. RushmoreDrive.com has 17 employees, down from 35 at its launch in April 2008. The chief execu- tive, Johnny Taylor, is also leaving, Simpson said. Prior to starting RushmoreDrive, Taylor had been a human resources director at IAC and LendingTree as well as a general counsel at hospi- tality company Compass Group.

The target audience was black people ages 24 to 60, including African Americans, black Hispanics and others of African heri- tage, the company told the Observer last year. It sought to deliver search results that are more relevant to African Americans than those from Google or Ya- hoo. The site had a niche Simpson said. In April, the site drew 439,000 unique visitors, ac- cording to Web tracker Comscore although in- ternal numbers had the number at about 600,000, she said. STAFF WRITER TONY MECIA CONTRIBUTED.

Local search engine to close The Charlotte-based RushmoreDrive.com was aimed at blacks. By Andrew Dunn A fourth participant in a large-scale mortgage fraud scheme in Mecklenburg and Union counties has agreed to plead guilty to charges of mon- ey laundering and bank fraud. Denis Joseph Hickey, owner of the Ohio-based CMI Con- struction joins three attor- neys who have acknowledged guilt, according to federal doc- uments. He could face 15 years in prison and a $500,000 fine. The mortgage fraud partici- pants agreed to buy homes at one price from builders, ar- ranged buyers at a higher price and lied to get mortgages at the higher level, according to court papers.

Prices were generally inflated by $200,000 to $500,000. At closing, the differ- ence between the two prices would be among members of the The federal criminal case says there were several mort- gage fraud cells operating in the neighborhoods of Provi- dence Downs South, Wood- hall, Chatelaine, Skyecroft, Fi- rethorne, Stratford on Provi- dence and Piper Glen during 2006 and 2007. CMI Construction was in- corporated in 2007 in Cleve- land. It is unclear exactly what role Hickey played. Court re- cords filed Tuesday iden- tify Hickey as a builder but call him a for, and a member of one of the mort- gage fraud cells.

Losses attributed to Hickey are between $1 million and $2.5 million, according to the plea agreement. Through the deal, Hickey agreed to provide information to U.S. attorneys about any oth- er criminal activity he was aware of, and will be forced to testify against other defen- dants if they go to trial. The other three participants who agreed to plead guilty act- ed as closing attorneys in the fraud cells. Charlotte attorney Demetri- us Rainer agreed in November, Waxhaw attorney Troy Antho- ny Smith agreed in December and Charlotte attorney Chris- tine Calbert Gates agreed in May.

The U.S. attorney handling the case be reached Wednesday. 4th guilty plea in scheme As much as $2.5 million in losses attributed to Ohio business owner in mortgage fraud. slower decline raised hopes the market was bottom- ing out. That could still be the case, despite the sharper drop last month.

Sales are likely to fluctuate at the bottom for a while before beginning a sus- tained improvement. Sales increased compared with the previous month, but typically true during the spring selling season. Job losses, wage cuts, uncer- tainty and a glut of foreclo- sures are likely to keep sales weak this year. Rising mort- gage interest rates also put a crimp in sales. are people out there who want to said Butch Brindel, CEO of Piedmont Re- gional Association of Realtors in Rock Hill.

problem having is financing, get- ting the Brindel said Realtors also talk of deals lost because ap- praisals came in below the sales price. His group operates the dominant MLS for York, Lancaster and Chester coun- ties in South Carolina. Overall, he said sales were off 39 per- cent compared with a year ago. The Carolina MLS said the average sales price in the Char- lotte area fell 11 percent, to $199,243, the fourth double- digit loss this year. Prices also declined from the previous month.

On average, sales pric- es remained more than 10 per- cent below asking prices, more than double the usual differ- ence. Mecklenburg, the largest market, saw sales fall 36 percent from a year ago, a hair better than 37 percent decline. The average sales price fell nearly 11 per- cent, to $211,012. HOME SALES from 7A Building permits fall New home construction continued to struggle last month. Permits for single-family homes in Mecklenburg fell 47 percent, to 174, com- pared with May 2008.

a little better than decline but still down dramatically. The home construction peaked in 2006. Permits have logged double-digit declines every month since February 2007. 174 single- family permits were down 81 percent from the high of 913 in May 2006. stores under agreements with Thomasville and Drexel Heri- tage there, too.

But the compa- ny rapidly increased its pres- ence in the state starting in about 2006, opening a dozen Thomasville and Drexel Heri- tage stores. It was about then that the Florida housing market began to plummet. By 2008 the econ- omy brought mounting chal- lenges; not only were people buying less furniture, but the stores were located in shop- ping centers that were losing traffic and tenants due to the economy, including names such as Circuit City, Ferebee said. places we were be- came ghost towns before we even left he noted. Hendricks shuttered all the Drexel and Thomasville stores by late last year and closed the Norris stores early this year, exiting the Florida market.

But it failed to reach agreements with landlords over debts re- lated to the store closures. In addition, a cash crunch caused delays in getting products from manufacturers and delivering them to customers. had to file to do what was right for the creditors, em- ployees and customers associ- ated with our founder Larry Hendricks said in a news release. The bankruptcy agreements will enable the stores to re- sume normal business and de- liveries, Ferebee said. The company, meanwhile, is focus- ing on its longstanding Caroli- nas operations to buoy its re- structuring effort and hopes to reorganize quickly, with the goal of rebuilding customer confidence.

The plan is not contingent on a dramatic mar- ket recovery, he said. stores in the Carolinas in horrible Fere- bee said. we can simply shed the debt in what puts us on course with the recovery Hendricks and Classic Mov- ing employ 245 people. BOYLES from 7A staff notes on the e-mail. The documents also appear to ques- tion some of the leadership.

In his prepared testimony for hearing, Lewis outlined why the deal turned out well for shareholders and taxpayers. He also said that although Bank of America considered ending the deal, the Charlotte company decided it would be best for the financial sector to go through with it. course made sense for Bank of America and its share- holders, and made sense for the stability of the Lewis said in his pre- pared remarks. The high-stakes exchanges between the government and the bank during the height of the financial crisis preced- ed a deal that has become a target for shareholders and New York Attorney General Andrew Cuomo. It also prompted the House hearing.

Lewis testified to a grand jury in New York that he felt pressure from Ber- nanke and then-Treasury Secretary Henry Paulson to go through with the deal, despite last-minute concerns about huge Merrill Lynch losses. Lewis also said Paulson want any public disclosure of problems. In an April letter to Rep. Dennis Ku- cinich, who serves on the House panel, Bernanke said the Fed with the highest during its discussions with Bank of America and seek to withhold any information from the public on losses. Merrill re- ported a $15.8 billion loss during the fourth quarter.

The Republican memo said none of the Fed documents show that govern- ment officials instructed Bank of America not to dis- close the Merrill losses. At the same time, there was least the intent to in- fluence disclosure decisions in order to allow the government to manage the situation in an orderly the staffers said. In other documents, an outside anal- ysis for the Fed of the bank and Merrill in December reported that Bank of contention that it learned late of severe losses prob- lematic and implies substantial defi- ciencies in the due The Republican staff memo says an e-mail from New York Fed economist Adam Ashcraft noted that investors might view Bank of retreat from the deal as a as they walked away from black Critics have said the Fed and the Treasury should have consulted the Se- curities and Exchange Commission whose mandate is to protect sharehold- ers. SEC Chairman Mary Schapiro called the absence in the dis- cussions in April. Neither Bernanke nor Paulson will testify today.

Republicans on the com- mittee have argued that the committee get a full picture of what happened until they hear from them as well. BLOOMBERG NEWS AND THE ASSOCIATED PRESS CONTRIBUTED. BOFA from 7A Charlotte-based bus maker delivers hybrids to Baltimore A Charlotte-based hybrid and electric bus manufacturer on Wednesday announced it delivered the first of 21 hybrid buses that were ordered by the city of Baltimore. DesignLine USA began building buses in 1985 and moved its headquarters to Charlotte in 2006. The company opened a manufacturing plant off Westinghouse Boulevard last year.

The EcoSaver IV bus ordered by Baltimore can operate on battery power, with zero emissions, up to 40 percent of the time, the company said. The value of the order is $12.2 million, and DesignLine plans to deliver the buses to Baltimore by this fall. The com- pany also said it has two pending federal grant applications that could lead to more orders. JEFFERSON GEORGE Carolinas Roundup.