Seattle Man Gets Two Years for eBay Fraud (PC World)

Over a four-year period, Jordan Dias, 40, collected more than US$94,000 from victims who thought they were purchasing items from a legitimate seller, the U.S. Department of Justice said Friday in a statement.

Dias, who defrauded more than 100 people via this scam will now have to pay more than $73,000 in restitution, and serve three years parole after his 24-month sentence.

This type of Internet auction fraud is the most frequently reported type of online crime, according to the U.S. Federal Bureau of Investigation's Internet Crime Complaint Center (IC3), a clearing-house where consumers can file online crime complaints.

In 2006, the last year for which data is available, the IC3 logged more than 207,000 complaints relating to auction fraud. That amounted to about 45 percent of all complaints received.

Are Implanted Microchips Safe?

Apple attempts to block free ringtones with iTunes update (Macworld.com)

A method of using iTunes to using songs not purchased from the iTunes Store was first posted by on Friday. Users confirmed after installing iTunes 7.4.1 last night that the method no longer worked.

However, an Engadget post on Saturday , again allowing the free ringtones to be synced to the iPhone.

When Apple first announced the earlier this week, it was only meant for songs purchased from the iTunes Store. Users would have to pay an additional 99 cents for the ringtone.

Third-party applications like have been updated to work with iTunes 7.4.1 and is available from the company’s Web site.

Chip implants linked to animal tumors (AP)

But neither the company nor the regulators publicly mentioned this: A series of veterinary and toxicology studies, dating to the mid-1990s, stated that chip implants had “induced” malignant tumors in some lab mice and rats.

“The transponders were the cause of the tumors,” said Keith Johnson, a retired toxicologic pathologist, explaining in a phone interview the findings of a 1996 study he led at the Dow Chemical Co. in Midland, Mich.

Leading cancer specialists reviewed the research for The Associated Press and, while cautioning that animal test results do not necessarily apply to humans, said the findings troubled them. Some said they would not allow family members to receive implants, and all urged further research before the glass-encased transponders are widely implanted in people.

To date, about 2,000 of the so-called radio frequency identification, or RFID, devices have been implanted in humans worldwide, according to VeriChip Corp. The company, which sees a target market of 45 million Americans for its medical monitoring chips, insists the devices are safe, as does its parent company, Applied Digital Solutions, of Delray Beach, Fla.

“We stand by our implantable products which have been approved by the FDA and/or other U.S. regulatory authorities,” Scott Silverman, VeriChip Corp. chairman and chief executive officer, said in a written response to AP questions.

The company was “not aware of any studies that have resulted in malignant tumors in laboratory rats, mice and certainly not dogs or cats,” but he added that millions of domestic pets have been implanted with microchips, without reports of significant problems.

“In fact, for more than 15 years we have used our encapsulated glass transponders with FDA approved anti-migration caps and received no complaints regarding malignant tumors caused by our product.”

The FDA also stands by its approval of the technology.

Did the agency know of the tumor findings before approving the chip implants? The FDA declined repeated AP requests to specify what studies it reviewed.

The FDA is overseen by the Department of Health and Human Services, which, at the time of VeriChip’s approval, was headed by Tommy Thompson. Two weeks after the device’s approval took effect on Jan. 10, 2005, Thompson left his Cabinet post, and within five months was a board member of VeriChip Corp. and Applied Digital Solutions. He was compensated in cash and stock options.

Thompson, until recently a candidate for the 2008 Republican presidential nomination, says he had no personal relationship with the company as the VeriChip was being evaluated, nor did he play any role in FDA’s approval process of the RFID tag.

“I didn’t even know VeriChip before I stepped down from the Department of Health and Human Services,” he said in a telephone interview.

Also making no mention of the findings on animal tumors was a June report by the ethics committee of the American Medical Association, which touted the benefits of implantable RFID devices.

Had committee members reviewed the literature on cancer in chipped animals?

No, said Dr. Steven Stack, an AMA board member with knowledge of the committee’s review.

Was the AMA aware of the studies?

No, he said.

___

Published in veterinary and toxicology journals between 1996 and 2006, the studies found that lab mice and rats injected with microchips sometimes developed subcutaneous “sarcomas” — malignant tumors, most of them encasing the implants.

• A 1998 study in Ridgefield, Conn., of 177 mice reported cancer incidence to be slightly higher than 10 percent — a result the researchers described as “surprising.”

• A 2006 study in France detected tumors in 4.1 percent of 1,260 microchipped mice. This was one of six studies in which the scientists did not set out to find microchip-induced cancer but noticed the growths incidentally. They were testing compounds on behalf of chemical and pharmaceutical companies; but they ruled out the compounds as the tumors’ cause. Because researchers only noted the most obvious tumors, the French study said, “These incidences may therefore slightly underestimate the true occurrence” of cancer.

• In 1997, a study in Germany found cancers in 1 percent of 4,279 chipped mice. The tumors “are clearly due to the implanted microchips,” the authors wrote.

Caveats accompanied the findings. “Blind leaps from the detection of tumors to the prediction of human health risk should be avoided,” one study cautioned. Also, because none of the studies had a control group of animals that did not get chips, the normal rate of tumors cannot be determined and compared to the rate with chips implanted.

Still, after reviewing the research, specialists at some pre-eminent cancer institutions said the findings raised red flags.

“There’s no way in the world, having read this information, that I would have one of those chips implanted in my skin, or in one of my family members,” said Dr. Robert Benezra, head of the Cancer Biology Genetics Program at the Memorial Sloan-Kettering Cancer Center in New York.

Before microchips are implanted on a large scale in humans, he said, testing should be done on larger animals, such as dogs or monkeys. “I mean, these are bad diseases. They are life-threatening. And given the preliminary animal data, it looks to me that there’s definitely cause for concern.”

Dr. George Demetri, director of the Center for Sarcoma and Bone Oncology at the Dana-Farber Cancer Institute in Boston, agreed. Even though the tumor incidences were “reasonably small,” in his view, the research underscored “certainly real risks” in RFID implants.

In humans, sarcomas, which strike connective tissues, can range from the highly curable to “tumors that are incredibly aggressive and can kill people in three to six months,” he said.

At the Jackson Laboratory in Maine, a leader in mouse genetics research and the initiation of cancer, Dr. Oded Foreman, a forensic pathologist, also reviewed the studies at the AP’s request.

At first he was skeptical, suggesting that chemicals administered in some of the studies could have caused the cancers and skewed the results. But he took a different view after seeing that control mice, which received no chemicals, also developed the cancers. “That might be a little hint that something real is happening here,” he said. He, too, recommended further study, using mice, dogs or non-human primates.

Dr. Cheryl London, a veterinarian oncologist at Ohio State University, noted: “It’s much easier to cause cancer in mice than it is in people. So it may be that what you’re seeing in mice represents an exaggerated phenomenon of what may occur in people.”

Tens of thousands of dogs have been chipped, she said, and veterinary pathologists haven’t reported outbreaks of related sarcomas in the area of the neck, where canine implants are often done. (Published reports detailing malignant tumors in two chipped dogs turned up in AP’s four-month examination of research on chips and health. In one dog, the researchers said cancer appeared linked to the presence of the embedded chip; in the other, the cancer’s cause was uncertain.)

Nonetheless, London saw a need for a 20-year study of chipped canines “to see if you have a biological effect.” Dr. Chand Khanna, a veterinary oncologist at the National Cancer Institute, also backed such a study, saying current evidence “does suggest some reason to be concerned about tumor formations.”

Meanwhile, the animal study findings should be disclosed to anyone considering a chip implant, the cancer specialists agreed.

To date, however, that hasn’t happened.

___

The product that VeriChip Corp. won approval for use in humans is an electronic capsule the size of two grains of rice. Generally, it is implanted with a syringe into an anesthetized portion of the upper arm.

When prompted by an electromagnetic scanner, the chip transmits a unique code. With the code, hospital staff can go on the Internet and access a patient’s medical profile that is maintained in a database by VeriChip Corp. for an annual fee.

VeriChip Corp., whose parent company has been marketing radio tags for animals for more than a decade, sees an initial market of diabetics and people with heart conditions or Alzheimer’s disease, according to a Securities and Exchange Commission filing.

The company is spending millions to assemble a national network of hospitals equipped to scan chipped patients.

But in its SEC filings, product labels and press releases, VeriChip Corp. has not mentioned the existence of research linking embedded transponders to tumors in test animals.

When the FDA approved the device, it noted some Verichip risks: The capsules could migrate around the body, making them difficult to extract; they might interfere with defibrillators, or be incompatible with MRI scans, causing burns. While also warning that the chips could cause “adverse tissue reaction,” FDA made no reference to malignant growths in animal studies.

Did the agency review literature on microchip implants and animal cancer?

Dr. Katherine Albrecht, a privacy advocate and RFID expert, asked shortly after VeriChip’s approval what evidence the agency had reviewed. When FDA declined to provide information, she filed a Freedom of Information Act request. More than a year later, she received a letter stating there were no documents matching her request.

“The public relies on the FDA to evaluate all the data and make sure the devices it approves are safe,” she says, “but if they’re not doing that, who’s covering our backs?”

Late last year, Albrecht unearthed at the Harvard medical library three studies noting cancerous tumors in some chipped mice and rats, plus a reference in another study to a chipped dog with a tumor. She forwarded them to the AP, which subsequently found three additional mice studies with similar findings, plus another report of a chipped dog with a tumor.

Asked if it had taken these studies into account, the FDA said VeriChip documents were being kept confidential to protect trade secrets. After AP filed a FOIA request, the FDA made available for a phone interview Anthony Watson, who was in charge of the VeriChip approval process.

“At the time we reviewed this, I don’t remember seeing anything like that,” he said of animal studies linking microchips to cancer. A literature search “didn’t turn up anything that would be of concern.”

In general, Watson said, companies are expected to provide safety-and-effectiveness data during the approval process, “even if it’s adverse information.”

Watson added: “The few articles from the literature that did discuss adverse tissue reactions similar to those in the articles you provided, describe the responses as foreign body reactions that are typical of other implantable devices. The balance of the data provided in the submission supported approval of the device.”

Another implantable device could be a pacemaker, and indeed, tumors have in some cases attached to foreign bodies inside humans. But Dr. Neil Lipman, director of the Research Animal Resource Center at Memorial Sloan-Kettering, said it’s not the same. The microchip isn’t like a pacemaker that’s vital to keeping someone alive, he added, “so at this stage, the payoff doesn’t justify the risks.”

Silverman, VeriChip Corp.’s chief executive, disagreed. “Each month pet microchips reunite over 8,000 dogs and cats with their owners,” he said. “We believe the VeriMed Patient Identification System will provide similar positive benefits for at-risk patients who are unable to communicate for themselves in an emergency.”

___

And what of former HHS secretary Thompson?

When asked what role, if any, he played in VeriChip’s approval, Thompson replied: “I had nothing to do with it. And if you look back at my record, you will find that there has never been any improprieties whatsoever.”

FDA’s Watson said: “I have no recollection of him being involved in it at all.” VeriChip Corp. declined comment.

Thompson vigorously campaigned for electronic medical records and healthcare technology both as governor of Wisconsin and at HHS. While in President Bush’s Cabinet, he formed a “medical innovation” task force that worked to partner FDA with companies developing medical information technologies.

At a “Medical Innovation Summit” on Oct. 20, 2004, Lester Crawford, the FDA’s acting commissioner, thanked the secretary for getting the agency “deeply involved in the use of new information technology to help prevent medication error.” One notable example he cited: “the implantable chips and scanners of the VeriChip system our agency approved last week.”

After leaving the Cabinet and joining the company board, Thompson received options on 166,667 shares of VeriChip Corp. stock, and options on an additional 100,000 shares of stock from its parent company, Applied Digital Solutions, according to SEC records. He also received $40,000 in cash in 2005 and again in 2006, the filings show.

The Project on Government Oversight called Thompson’s actions “unacceptable” even though they did not violate what the independent watchdog group calls weak conflict-of-interest laws.

“A decade ago, people would be embarrassed to cash in on their government connections. But now it’s like the Wild West,” said the group’s executive director, Danielle Brian.

Thompson is a partner at Akin Gump Strauss Hauer & Feld LLP, a Washington law firm that was paid $1.2 million for legal services it provided the chip maker in 2005 and 2006, according to SEC filings.

He stepped down as a VeriChip Corp. director in March to seek the GOP presidential nomination, and records show that the company gave his campaign $7,400 before he bowed out of the race in August.

In a TV interview while still on the board, Thompson was explaining the benefits — and the ease — of being chipped when an interviewer interrupted:

“I’m sorry, sir. Did you just say you would get one implanted in your arm?”

“Absolutely,” Thompson replied. “Without a doubt.”

“No concerns at all?”

“No.”

But to date, Thompson has yet to be chipped himself.

___

On the Web:

Media-Savvy Apple Reacts to iPhone iCut Crisis (NewsFactor)

The Mac-maker, though, demonstrated a different skill this week in the wake of a major price cut on the iPhone that enraged customers and threatened to breed resentment. It also threatened Apple's stock price. Apple's stocks fell $1.75, or 1.3 percent, on the news of phone's price dropping from $599 to $399.

That's when Apple flexed its crisis communications muscle.

Life in the Technology Lane

Crises come in all shapes and sizes, from natural disasters that could bring operations to a screeching halt to criminal acts to hazardous waste issues to workplace violence. Bankruptcies, major lawsuits, and other incidents might also potentially destroy a company's reputation or cripple the business.

In Apple's case, it was a price cut. Apple handled the dilemma with grace, according to Michael Gartenberg, an analyst at Jupiter Research. "Apple didn't have to do anything," he said. "The company's position is totally defensible. But the company didn't want people to feel bad, so they responded."

When it comes to the actual crisis communications plan, the first step is of course to determine which employee should represent the company as spokesperson. In this case, Apple went straight to its CEO, Steve Jobs. Jobs posted a letter at the company's Web site on Thursday admitting the firm made a mistake and offering a $100 refund in the form of store credit to those who paid $599 for the iPhone.

"This is life in the technology lane," Jobs wrote. "If you always wait for the next price cut or to buy the new improved model, you'll never buy any technology product because there is always something better and less expensive on the horizon."

Long-Term Resentment Unlikely

Apple responded quickly, Gartenberg noted. It took hours, not days. Gartenberg also noted that Apple responded with a generous offer. "I can't think of any other company that has done anything like this in recent memory," he said. "Apple really stepped up to make its customers happy. They got ahead of this and got ahead of it quickly. So it's hard to imagine that there will be any long-term resentment."

Indeed, Apple's strategy seems to have averted a major backlash. Internet message boards, which were raging with customer rants just days ago, are taking on a different tone now. Gartenberg said he spent last night prowling discussion forums and noticed a marked shift in the post-price-cut posts.

"The core Apple audience wasn't that upset. They know about price cuts. They know about the depreciation of technology, and they don't care," Gartenberg concluded. "Maybe there is a lesson for consumers, particularly mainstream consumers, that the first day a product is introduced isn't necessarily the best day to buy it. This is the nature of technology."

Egypt's Luxor offers WiMax access to visitors (Reuters)

The service was offered for sale on Saturday, covering Luxor's main tourist attractions including Luxor Temple, the Nile corniche and the historic Winter Palace hotel.

Foreign visitors and reporters joined the city's governor at a reception to mark the Wimax launch on Friday night at the Luxor Temple.

Dubbed "While in Egypt Stay Connected" and funded by the United States Agency for International Development (USAID), the project to install Wimax in Luxor mainly targets the 3.5 million tourists who visit the city every year.

"One of the main aims is to change the perception of Egypt among foreigners as a country of sun, sands and temples only," said Nihal Soliman, a USAID marketing advisor.

The project was also launched in the Red Sea resort of Sharm El-Sheikh.

The Egyptian government has granted the project a temporary license to install WiMax, which allows connections over longer distances than the WiFi standard which only works near a transmitter.

WiMax competes with the Internet services provided by 3G mobile phone networks, operated in Egypt by Vodafone Egypt, Etisalat of the United Arab Emirates and recently acquired by Mobinil.

WiMax users in Luxor will buy scratch cards from retail distributors, starting at five 5 euros ($6.85) for a one-hour card and 15 euros for the whole day.

ProTrade gives fans a say in rankings (AP)

recently added college football to its roster of sports this season, giving fans a chance to predict how well teams will do this season.

While there predictably are many similarities between the major polls and ProTrade’s rankings — Southern California and LSU are the top two teams in all three — there are also some major differences.

ProTrade users are more bullish than the pollsters on teams like Wake Forest and Hawaii and more bearish on UCLA and Nebraska.

The most notable difference for now is that of Michigan. The Wolverines fell out of the major polls after losing its opener to Appalachian State, the first time a ranked team has ever lost to a team from the Championship Subdivision (formerly Division I-AA).

But Michigan fell from only fifth to 13th in ProTrade’s rankings as of early Friday — unlike the traditional polls, ProTrade’s rankings can change every minute. Many traders apparently believe the Wolverines can recover from that historic loss and still have a successful season.

“The biggest difference is the AP poll is more about how a team has done up until now, while our market predicts how Michigan will be until the end of the year,” said ProTrade co-founder Jeffrey Ma.

Launched in 2005, San Mateo-based ProTrade treats professional athletes and teams like stocks to be bought and sold in a theoretical currency that can be redeemed for prizes.

After the value of teams or players are set by ProTrade in an IPO of sorts, the price then changes constantly depending on whether the community of traders are looking to buy or sell that stock.

The scoring on ProTrade is simple. Each regular season win, including conference championship games, is worth 15 points. Teams get an additional five points for beating a team in the AP Top 25 and another five if the team is in the Top 10.

A win in a bowl game is worth 20 points and teams that qualify for a BCS bowl get 15 points. Making the BCS title game is worth another 15, and winning it all is worth 30.

The price of a team was set before the season as the company pored over all sorts of data to determine a starting point. After that, it’s up to the traders — and how a team performs — to determine which direction the price goes.

“It’s like an IPO. We set the price and never touch it again,” Ma said.

For example, USC opened at $205.02, peaked at more than $260 — which meant the Trojans likely would have had to go undefeated and win the national championship to earn a profit — before falling back to just more than $220 on Friday.

Ma and co-founder Mike Kerns said interest in the college football has been high, with some users trading teams possession by possession as if they were short-selling stocks. One user learned that the price of teams usually falls when they’re on defense and rises when they’re on offense.

ProTrade also offers markets for the NFL, Major League Baseball, the NBA, the PGA Tour, NASCAR and college basketball. The site originally relied on new-age statistics inspired by Michael Lewis’ best-selling book “Moneyball” to determine values of players and teams.

But when that proved to be too confusing to the average fan, the site switched last year to traditional fantasy sports stats. That helped increase traffic to the site fifteenfold and ProTrade now generates more than 20 million page views a month from its more than 100,000 registered users.

Because of regulatory issues, ProTrade can only use virtual dollars instead of real money. But users can redeem those ProTrade dollars for various prizes, including gift cards, signed memorabilia or the opportunity to play a game of H-O-R-S-E with Phoenix Suns guard Steve Nash.

Ma became famous while in college at MIT when and his buddies became so proficient at counting cards in blackjack that they carted away millions of dollars from Las Vegas casinos. Their feats inspired the best-selling book “Bringing Down The House.” (Ma is Kevin Lewis in the book).

Kerns, who is the CEO of the company, came to ProTrade after working for noted sports agents Leigh Steinberg and Jeff Moorad.

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On The Net:

Heavy Internet users unplugged by US cable company (AFP)

Cable Internet and entertainment provider Comcast "has punished some transgressors by cutting off their Internet service, arguing that excessive downloaders hog Internet capacity and slow down the network for other customers," the Washington Post reported.

Comcast spokesman Charlie Douglas told AFP the company was addressing "the problem of abusive activity that adversely impacts on everybody else's experience."

"I can't give you a number" for clients who have been disconnected, said Douglas, while assuring that customers whose plugs were pulled are "very rare."

According to the Washington Post, a customer would have to download the equivalent of 1,000 songs or four feature films a day to trigger a disconnection warning.

Comcast gives customers a month to fix problems or upgrade their service before they are disconnected, the Washington Post said.

An unplugged client in Rockville, a suburb of Washington, has filed a complaint with the county he lives in, saying his contract with his service provider states that he is entitled to unlimited Internet access, officials in Montgomery County said.

A recent report by the ABI market research company warned that the growth in demand for "bandwidth-hungry services such as HDTV and online gaming is leading to a critical lack of capacity" in US cable operators' networks.

"Cable TV operators trying to satisfy the increasing bandwidth demands of HDTV customers feel very much like the thrifty grocer who tried to cram ten pounds of potatoes into a five-pound bag," ABI research director Stan Schatt said last month.

"The increasing bandwidth demands on cable operators will soon reach crisis stage, yet this is a ‘dirty little industry secret’ that no one talks about."

Google Seeks Satellite Imagery To Aid Search For Steve Fossett (TechWeb)

Fossett disappeared after taking off at the controls of a small plane Monday from the Flying M Ranch airstrip about 70 southeast of Reno, Nev. He left no flight plan, and searchers have been combing a 10,000 square mile expanse of Nevada and California to no avail.

Digital Globe's QuickBird satellite scanned what is believed to be an 11-mile wide and 120-mile long strip of Nevada around the ranch, but Fossett could have flown beyond the boundaries of the satellite scan. Google declined to comment on the search but it's known to connect search and rescue teams to available satellite imagery. Digital Globe and other satellite company imagery companies routinely feed Google data that goes into its Google Earth software, but Google Earth image posting is typically three to six months behind when it was taken.

In a previous search, satellite images were used to try to track down the missing computer scientist , who disappeared in his sailboat off the coast near San Francisco. Digital Globe images were subdivided into tiles at Johns Hopkins University and inspected by astronomy faculty and graduate students. The effort proved that volunteers could identify 40-foot boats in the fuzzy gray images, but Gray's Tenacious was never found.

Fossett's U.K. financier and partner, Richard Branson, told the San Francisco Chronicle that he was coordinating the search for Fossett by working with Google and others interested in finding his missing plane. It was a blue and white Bellanca Citabria Super Decathlon, a plane capable of aerial aerobatics. It had orange strips on the fuselage and sunburst patterns on the wings.

Chuck Herrick, Digital Globe spokesman, said the firm will try for another scan Saturday as QuickBird passes over the region again. The satellite can capture objects the size of a car or smaller, and image enhancement software can sometimes filter out what isn't visible to the naked eye. But Herrick warns that a small plane can fly into a canyon or ravine, or hit the ground behind a hill that obscures it from the satellite's 45-degree angle view.

"You could see a plane, but it depends on the terrain and vegetation cover," he notes.

Even if satellite images don't contribute directly to locating a downed plane, they can be used to map the search area, highlight what's already been flown over by helicopter or search plane, and define the terrain where the missing aviator is most likely to be found, he points out.

Apple Stock Tumbles After iPhone Fiasco (TechWeb)

The sell off started Wednesday when Apple chief executive Steve Jobs surprised customers and shareholders with a , which had only been available for two months. Apple typically doesn't reduce prices on products until they're trumped by upgrades.

Unhappy with the impact the cut would have on Apple's bottom line, investors on Wednesday dumped the company's stock, driving its price down 6.1% to $136.76 per share. On Thursday, the sell off started anew when Jobs said the company would offer iPhone buyers who paid the original $599 for the gadget a on any Apple product bought through its Web site or retail stores. The credit, triggered by angry protests from early iPhone buyers, led to Apple stock finishing the day down 55 cents to $135.01.

While there were no new announcements on Friday, the stock continued to fall, dropping another 2.4%, or $3.24, to end the day at $131.77 per share. Since Wednesday, when the stock opened at $144.97, the price has fallen $13.20, shaving $11 billion off Apple's market cap,

The iPhone price cut as an indication that the gadget was priced too high for the market, and Apple had no choice but to lower the cost to broaden the customer base.

Jobs on Thursday acknowledged that the company hoped to make the gadget more affordable. "It benefits both Apple and every iPhone user to get as many new customers as possible in the iPhone tent," Jobs said in an open letter to iPhone customers posted on the company's Web site.

Some experts have also said that Apple wants to be sure to hit Job's goal of shipping 10 million iPhones by June 2008, which will mark the device's one-year anniversary.