Ohio says it proved $100M charity fraud at trial

CLEVELAND — An Ohio prosecutor is asking jurors to convict a man charged with masterminding a $100 million, cross-country veterans charity fraud.

Prosecutor Brad Tammaro told a Cleveland jury in a closing argument Wednesday that the state has proved the 24 charges against the defendant.

The defendant identifies himself as 67-year-old Bobby Thompson, but authorities say he is Harvard-trained attorney John Donald Cody.

Tammaro says the charges stem from a 2003 charity registration with the state of Ohio and annual renewals.

The defendant is charged with looting the United States Navy Veterans Association that he ran in Tampa, Fla. The charges include racketeering, money laundering, theft and identity theft.

Authorities believe he defrauded donors of up to $100 million in 41 states since 2001, including $2 million in Ohio.

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Motorola unveils budget smartphone, aimed at world

NEW YORK — Motorola says it wants to equip the world with the latest smartphone technology, at less than a third the price.

The new Moto G phone starts at $179 in the U.S. without a contract requirement. That compares with $600 or more that people must pay for phones without traditional two-year service agreements.

Motorola, which is owned by Google Inc., said Wednesday that it will target an estimated 500 million people worldwide who can't afford phones costing more than $200. In the past, the company said, those consumers were limited to phones with technology that's at least a year old and thus unable to run the latest apps and services.

The company is targeting not just emerging markets, but budget-conscious consumers in the U.S. Although people can often get phones with contract at the lower price, service fees are higher because they include the cost of subsidizing those phones. And many people don't have good enough credit to qualify and are limited to so-called pre-paid plans, which aren't eligible for the subsidized prices.

With the Moto G, Motorola is trying to offer a device that is closer to what leading high-end phones currently offer.

The phone's 4.5-inch screen, measured diagonally, is capable of high-definition video, but only at 720p, not at the better, 1020p standard found in leading phones. The resolution is 329 pixels per inch, which is comparable to the 326 pixels in the latest, 4-inch iPhones but short of the 441 pixels in Samsung's 5-inch Galaxy S4.

The $179 price is for a phone with 8 gigabytes of storage, not the 16 gigabytes typical with high-end phones. A 16-gigabyte version is available for $199.

The phone also has a recent processor from Qualcomm and runs a recent version of Google's operating system, Android 4.3, also known as Jelly Bean. The newest version, 4.4 or Kit Kat, is promised by January. Kit Kat was designed to work well with older phones and the latest devices alike.

The phone starts selling in Brazil and parts of Europe on Wednesday. It will be available in Canada, parts of Asia and the rest of Europe and Latin America over the next few weeks. It is expected in the U.S., India, the Middle East and additional markets in Asia in January. Motorola didn't announce any plans for Africa.

Moto G will have a removable back to allow for customization. Motorola's flagship Moto X also allows customization, but it must be ordered in advance and can't be changed.

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Too much? Lady Gaga saturates market

There's just one way to escape the blitz surrounding Lady Gaga's new album: completely unplug from society.

To kick off the release of her new album, "Artpop," this week, the entertainer, never known for understatement, has been omnipresent.

She began with a huge release party Sunday where she debuted Volantis, billed as the "world's first flying dress." She floated about 6 feet above the floor before performing at the event, streamed live on Vevo.

The next day, she opened pop-up "Artpop" stores in New York and Los Angeles, where Gaga-related merchandise was sold, and she was one of the main honorees at Glamour's Women of the Year ceremony. On Wednesday, she was due to appear at the opening of an H&M store in New York's Times Square.

She's scheduled to tackle hosting and performance duties on NBC's "Saturday Night Live," and she redesigned the Life section logo of USA Today in her image — the first time the newspaper has had a celebrity do so. The newspaper also featured an interview with the superstar. And a concert special with Ryan Seacrest is set to air on the CW Network next week.

Gaga's publicity push leading up to the debut of "Artpop" could be described much like the singer herself — eye-catching, unique, daring and, of course, over the top. It comes amid mixed reviews for the album, the departure of her longtime manager and questions about whether Gaga-mania might be on the wane outside her core Little Monsters. The album's first single, "Applause," remains a top 10 hit, but was considered a bit of an underperformer compared with her previous hits.

Bill Werde, Billboard's editorial director, thinks folks wondering if the 27-year-old is approaching her expiration date are missing the point.

"She's presenting an artistic view of pop music that's a lot more challenging than anything else that's even approaching the top of our charts now. She is risking her top success for the sake of art, and I think a lot of people don't get that," Werde said after viewing Sunday's show online.

"You have to really appreciate how conservative most pop fans are in the world. They don't necessarily want their music dipped in art. They don't want to see pop stars come out for a performance wearing a terrifying scarecrow mask," he added.

It's what we've come to expect from Gaga, however. Her career has been as much about performance art as music. After all, this is the woman who has paraded around in a dress made of meat, assumed a male alter-ego for an awards show, arrived at another in an egg and stripped naked onstage in Europe last month.

"She's definitely one of the most iconic artists that we have on the planet," said hitmaker David Guetta, who worked with Gaga on her new album. "I like the way that she works because she's just an artist. I don't see her as belonging to one school. She's just art. Even though it's pop music and it can some time have emotional (aspects), pop can also be very commercial. And I like the way that she's doing pop in a very artistic way."

Some have questioned how much her approach resonates these days, especially when Miley Cyrus draws weeks of headlines by twerking onstage at the MTV Video Music Awards. Gaga's performance at that show barely rated a blip at the water cooler the next morning.

Gaga's supporters, though, warn against viewing her in the short term. They believe she's built something more durable. Kid Kelly, SiriusXM's vice president of music programming, hosted an interview session with Gaga last week that drew an eclectic crowd that ranged from pre-teen to middle age.

"She has a vision for what she does as an artist, but not necessarily like you're on the assembly line of creating formulaic hits," Kelly said. "She's a genius, the way she presents, the way she acts, the way she's thinking constantly about innovating and re-innovating herself, the way she is very, very forward thinking. She understands her audience I think better than most people give her credit for."

"Artpop" is Gaga's fourth full-length album, and comes after a forced hiatus. A hip injury sidelined her and forced her to cancel her tour last year. In a brief interview before her Sunday performance, Gaga said that time off gave her some perspective.

"You know what I realized? That I don't need to reinvent myself. What I realized is that in your lifetime, if you have one really great idea, run with it. And run all the way to outer space if you can," she said. "If you believe in yourself and you work hard, rehearse and have discipline, these ideas could take us to the moon."

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AP Writer John Carucci in New York contributed to this report.

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Follow AP Music Writer Chris Talbott: http://twitter.com/Chris_Talbott .

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Online:

http://ladygaga.com

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Stocks lower as China reform promise disappoints

LONDON — Global stock markets were under pressure Wednesday after a highly anticipated meeting of Chinese leaders failed to yield bold reforms to overhaul a growth model that is running out of steam.

Communist Party leaders in Beijing pledged to promote market forces in the country's state-dominated economy after the four-day meeting wrapped up late Tuesday. But in a disappointment for reform advocates, they failed to announce dramatic changes such as curbing the dominance of state industry, extending property rights to farmers or relaxing the one child birth control policy.

The ruling party said that market forces will play a "decisive role" in China's economy, an upgrade from "core role" assigned to the market in party policy over the past two decades, and flagged 2020 as a timeframe for changes.

"While the general approach is market-oriented, the absence of clear details is slightly disappointing," said Neil MacKinnon, global macro strategist at VTB Capital.

In Europe, Germany's DAX was down 0.7 percent at 9,016, while the CAC-40 in France fell 0.7 percent at 4,237.

The FTSE 100 index of leading British shares underperformed, trading 1.6 percent lower at 6,635 after new unemployment projections from the Bank of England raised speculation in the markets that interest rates may rise sooner than anticipated. In contrast, the British pound spiked, trading 0.5 percent higher at $1.5966.

In the U.S., the Dow Jones industrial average was down 0.4 percent at 15,691, while the broader S&P 500 index fell 0.2 percent to 1,763.

Earlier in Asia, China's Shanghai Composite plunged 1.8 percent to 2,087.94, and Hong Kong's Hang Seng sank 1.9 percent to 22,463.83. Tokyo's Nikkei shed 0.2 percent to 14,567.16, and South Korea's Kospi lost 1.6 percent to 1,963.56. Australia's S&P/ASX 200 fell 1.4 percent to 5,319.2.

Confirmation hearings for Janet Yellen as the new Federal Reserve chief on Thursday could provide a fresh cue for financial markets. Investors will look to her testimony for clues about when the Fed will begin reducing its massive monetary stimulus that has propped up the world's largest economy. Yellen has been tapped to replace Ben Bernanke as Fed chairman at the end of January.

In currency markets, trading was muted, with the euro down 0.3 percent at $1.3398 and the dollar 0.1 percent lower at 99.51 yen.

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Lee contributed from Seoul, South Korea.

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House oversight panel probes health website woes

WASHINGTON — Probing whether the White House shares blame for health care website woes, the House's chief investigator Wednesday plunged into the technical issues behind the dysfunctional rollout of HealthCare.gov.

Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, is exploring a long list of issues: insufficient testing, possible security flaws, design shortcomings — even allegations of political meddling.

As the hearing went on, it wasn't clear if there's a "smoking gun" behind the technical failure that has mortified supporters of President Barack Obama's health care law and cheered its opponents.

It was the sixth major congressional hearing since computerized insurance markets went live Oct. 1 and millions of consumers encountered frozen screens.

"Established best practices of our government were not used in this case," said Issa. As a result, the law's promise of affordable health insurance "does not exist today in a meaningful way." Like other Republicans, Issa wants the law repealed, not fixed.

Ranking Democrat Elijah Cummings of Maryland questioned Issa's fairness.

Addressing Issa directly, Cummings said: "Over the past month, instead of working in a bipartisan manner to improve the website, you've politicized this issue by repeatedly making unfounded allegations."

A key issue for Issa is why the administration required consumers to first create online accounts at HealthCare.gov before they could shop for health plans. That runs counter to the common e-commerce practice of allowing anonymous window-shopping. Outside experts say it increased the workload on a wobbly system.

Republicans suspect a political motive; Democrats say the explanation has to do with technical issues. The shopping feature had its own glitches and would have compounded system problems.

The hearing comes during a week in which the administration is expected to release tightly held enrollment numbers for October. They are believed to amount to only a small fraction of the nearly 500,000 initial signups that officials had projected a month before the trouble-plagued website's launch.

It also could produce one of the more memorable witnesses of the administration's tangle with technology. Henry Chao, a little-known Medicare official, presented an overview of the enrollment system back in the spring, and commented, "Let's just make sure it's not a third-world experience."

Chao is deputy chief information officer for the Centers for Medicare and Medicaid Services, which also is leading the implementation of the Affordable Care Act. A career official who earlier helped implement the Medicare prescription drug benefit, he is widely seen as the operational official most knowledgeable about the health care law's online system.

Chao's public comment in March at an insurance industry forum was taken as an edgy joke, and he later joined the parade of administration officials who assured lawmakers that everything was on track for a smooth launch, even as nonpartisan experts from the congressional Government Accountability Office warned that could not be taken for granted.

Issa's investigators have already grilled Chao in a private session that lasted some nine hours. Chao's name appears on a key Sept. 27 document authorizing the launch of the website despite incomplete security testing. But Issa's staff has released materials indicating that Chao was unaware of a memo earlier that month detailing unresolved security issues.

On Wednesday, Chao testified that he is confident that the system is secure. In fact, he said he had recommended to his sister that she try it.

Chao was also involved in the decision not to allow anonymous window-shopping, which is available on most e-commerce sites, including Medicare.gov. He testified Wednesday that the anonymous shopping feature "miserably" failed testing and would not have been a help to consumers.

Issa has suggested a political calculation: The administration wanted to avoid consumers experiencing "sticker shock" over premiums, so it first required them to compute tax credits that work like a discount.

The committee also heard from Todd Park, the White House chief technology officer.

He testified that the website is getting better day by day, and week by week. It can now handle about 17,000 account registrations an hour. Page response times are under one second.

Issa has launched high-profile investigations of other troubling episodes for the administration, including the 2012 attack in Benghazi, Libya, that killed U.S. Ambassador Chris Stevens and three other Americans; the failure of the Solyndra solar power company that received government loans; and the "Fast and Furious" gun-tracking program on the Mexican border.

Separately, the House Homeland Security Committee also held its own hearing Wednesday.

It gave Republicans a chance to criticize the health care law and the botched online rollout. But it resulted in few answers on the security of the HealthCare.gov website because officials testifying from the Department of Homeland Security said that wasn't their responsibility.

While DHS helps federal agencies like Health and Human Services comply with federal security standards, the law leaves many of the technical decisions up to the agencies themselves, the officials said.

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Associated Press writer Anne Flaherty contributed to this report.

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Bank of England hints at earlier rate rise

LONDON — British homeowners and businesses could face a rise in interest rates sooner than expected as the economic recovery is gathering pace, the Bank of England indicated Wednesday.

Governor Mark Carney said there were improvements across the board, with unemployment dropping quicker than anticipated — to 7.6 percent, according to the latest figures.

"For the first time in a long time, you don't have to be an optimist to see the glass as half full," he said as he presented the central bank's quarterly economic report.

The market took that as an indication that interest rates will rise sooner than expected. Britain's main stock index, the FTSE 100, fell 1.2 percent, the worst performer in Europe, after Carney's comments.

Even though the markets moved, investors don't expect a rise in interest rates for months, if not years. That's because the bank has vowed not to consider raising its record-low interest rate until unemployment falls below 7 percent. The latest forecasts suggest the target may be reached by the third quarter of 2015 rather than the original guess of 2016.

Carney went out of his way to say the central bank would not act prematurely.

"It is welcome that the economy is growing again, but a return to growth is not yet a return to normality," Carney said. "Nearly one million more people are out of work than in the years before the financial crisis."

He also said that hitting the 7 percent threshold would not necessarily trigger an increase in rates. He chuckled at the notion change would be that sudden, and said the bank would make it clear ahead of time what its intentions were, so as to not catch consumers off guard.

"We like to talk," Carney said with a smile.

Carney noted the recovery still faced headwinds, meaning it could yet slow down. The Bank also revised down its forecasts for inflation, which remains its primary policy concern.

As well as holding its main interest rate at a record low of 0.5 percent since 2009, the bank has pumped 375 billion pounds into the economy to keep market rates low and encourage banks to lend. Yet the British economy remains about 2.5 percent smaller than it was at the start of 2008, before it fell into the deepest recession since World War II.

Signs of life have emerged of late, notably in the housing sector, which many fear is beginning to overheat, particularly in and around London. Carney tiptoed around questions about whether he feared a housing bubble was developing.

Still, the report comes against the most favorable backdrop for the economy since the onset of the recession — having achieved two successive quarters of growth and inflation only marginally above the 2 percent target.

"Mark Carney must be thinking that being governor of the Bank of England has been a piece of cake so far!" said Howard Archer Chief UK and European economist for IHS Global Insight.

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Extended Stay America rises in market debut

NEW YORK — Hotel operator Extended Stay America stock jumped in its first day as a publicly traded company.

Shares traded as high as $23.90, or 19.5 percent shortly after the opening trade Wednesday. The gain pared to $3.01, or 15.1 percent in late morning trading.

The initial public offering of about 28.3 million shares priced at $20 each, the midpoint of the projected $18 to $21 per share range. Each share includes common stock of Extended Stay America and Class B common stock of real estate investment trust ESH Hospitality Inc. The offering is expected to help ESH Hospitality maintain its qualification as a REIT.

Extended Stay America Inc. raised approximately $566 million in the offering. Most of the proceeds will go toward repaying certain debt held by ESH Hospitality.

The underwriters have a 30-day option to buy up to an additional 4.2 million shares.

Extended Stay America hotels are meant for guests looking for an affordable option when they are anticipating a somewhat lengthy stay. Guests typically include business travelers, professionals on temporary jobs or training assignments, people relocating, temporarily displaced by a storm, home purchase or other event and any others in need of temporary housing.

Fully furnished rooms include kitchens and limited housekeeping services. Rooms are normally rented on a weekly basis or more long term.

Extended Stay America's stock is trading on the New York Stock Exchange under the "STAY" ticker symbol.

The offer is targeted to close on Monday.

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Macy's upbeat about holiday shopping season

NEW YORK — Macy's is seeing signs that a merry holiday shopping season could be in store.

The department store chain on Wednesday reported a quarterly profit that handily beat Wall Street expectations, with the company citing rejiggered advertising and promotions for helping reverse a slip in sales in the previous quarter.

In a conference call with analysts, chief financial officer Karen Hoguet noted that traditional gift categories such as fine jewelry, cashmere and housewares were trending well. She also noted positive trends for cold weather items such as coats, boots and sweaters.

"If we have anything close to a normal weather pattern this year, this could add significant volume," she said.

The holiday shopping season is a make-or-break time for retailers because it can account for as much as 40 percent of annual revenue. This year, there are also six fewer days between Thanksgiving and Christmas, intensifying the pressure for companies to perform. Already, Macy's has said it plans to open on Thanksgiving evening for the first time.

"We expect a heightened sense of urgency among customers, so it's important that we be ready for her every day, every time, in every way she shops," Hoguet said.

Retailers are also facing ongoing concerns about shoppers' willingness to spend in the weak economy. Macy's, for example, has been stepped up promotions, which led to a slide in gross profit margins in the quarter. Increased shipping costs for online orders also contributed to the decline.

Macy's Inc., based in Cincinnati, Ohio, is the first of the major retailers to report third-quarter results and is often seen as a barometer of spending among middle- to upper-income shoppers.

The company has been a standout among its peers throughout the economic recovery and has reaped the benefits of its strategy of tailoring merchandise to local markets. But like other clothing merchants, Macy's saw sales slow over the summer amid new worries about the economy.

When asked about the habits of budget-conscious shoppers in the period, Hugoet said she'd have to "wait and see" how competitors fared. J.C. Penney, which is trying to recover from a botched strategy under its former CEO Ron Johnson, reports its results next week.

For the quarter ended Nov. 2, Macy's earned $177 million, or 47 cents per share. That compares with $145 million, or 36 cents per share, a year ago.

Revenue rose 3 percent to $6.28 billion.

Analysts expected earnings per share of 39 cents on revenue of $6.19 billion.

Revenue at stores opened at least a year, a key metric because it strips out the volatility of newly opened and closed locations, was up 3.5 percent. Analysts expected a 2.1 percent increase.

The company reaffirmed its guidance for sales to rise between 2 percent and 2.9 percent for the full year at locations open at least a year. Earnings are expected to be between $3.80 and $3.90 per share, above Wall Street's expectations of $3.78 per share.

Shares of Macy's were up $4.01, or nearly 9 percent, at $50.34. The stock is up more than 18 percent over the past year.

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Follow Candice Choi at www.twitter.com/candicechoi

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Slow New England job growth seen lagging US gains

HARTFORD, Conn. — An economic outlook says growth in New England will continue to be slow, set back by federal spending cuts and reduced consumer demand.

The report released Wednesday by the New England Economic Partnership says economic growth of 3 percent through 2017 is less than what's considered even moderate.

Massachusetts, Vermont and New Hampshire are expected to continue to boast the strongest economies in the region in the next four years.

Employment growth of 2 percent in the six states will be below the national average. Massachusetts has recovered the jobs lost in the 2007-2009 recession and Vermont will soon follow.

Connecticut is expected to have the region's highest unemployment rate, 6.5 percent, by 2017.

Housing is a bright spot as home prices and sales rise, boosting construction and related industries.

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Philly police: Teen ran Instagram 'rats' account

PHILADELPHIA — A teen faces charges of intimidation and terroristic threats in connection with a social media account that revealed the names of victims and witnesses in criminal cases, police said.

The 17-year-old was taken into custody Tuesday in connection with the now-shuttered anonymous Instagram account, said Officer Tanya Little, a police spokeswoman.

Little said the boy is alleged to have been the owner of the "rats215" account — a reference to Philadelphia's area code — that posted affidavits and photos of victims and complainants in criminal cases.

"There was a lot of information there ... a lot of information that was not for public viewing," Little said Wednesday.

The Philadelphia Inquirer reported earlier that the account had posted material identifying more than 30 witnesses since February. The newspaper said the account had nearly 7,900 followers and had more than 150 photos, many drawing dozens of comments and likes.

Prosecutors said they would seek to try the teenager as an adult in connection with information posted about a shooting last year in southwest Philadelphia.

"The actions of this teenager could have lasting repercussions on untold cases here in Philadelphia," District Attorney Seth Williams said in a statement, saying witness intimidation had reached "near-epidemic levels" and vowing to prosecute those responsible.

"I don't care how old you are, if you intimidate a witness in this city I'm going to come after you," he said.

Little said the investigation, which started Oct. 24, was continuing. Although the teenager is accused of having owned the account that posted the material, "you have to think about ... where did it come from?" she said. "That's the question that has to be answered."

Authorities have called witness intimidation a serious problem in Philadelphia, with people arrested daily in the city's criminal courts building for taking photos of witnesses, victims' families or judges and posting the images online, said Tasha Jamerson, a spokeswoman for the district attorney's office.

Law enforcement officials have said they have long seen victim's statements posted in public places or sent to the home of witnesses, but such material is now winding up on Facebook, Twitter and Instagram.

Instagram hasn't said whether it took down the account. It says community guidelines bar content that bullies or harasses and that users are encouraged to report it.

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