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	<title>Mirsepasy Law Offices</title>
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		<title>Things to Consider when Purchasing an Existing Business</title>
		<link>http://www.mirslaw.com/2012/things-to-consider-when-purchasing-an-existing-business/</link>
		<comments>http://www.mirslaw.com/2012/things-to-consider-when-purchasing-an-existing-business/#comments</comments>
		<pubDate>Sun, 12 Feb 2012 22:25:41 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

		<guid isPermaLink="false">http://www.mirslaw.com/?p=538</guid>
		<description><![CDATA[I think the United States has hit and moved from the bottom when it comes to it&#8217;s poor economic numbers.  Not only are several leading indicators up, I have noticed that in my law practice, there are increasing excitement in the local business community. It seems to be a good time, for many possible reasons, to start a new business]]></description>
			<content:encoded><![CDATA[<p>I think the United States has hit and moved from the bottom when it comes to it&#8217;s poor economic numbers.  Not only are several leading indicators up, I have noticed that in my law practice, there are increasing excitement in the local business community. It seems to be a good time, for many possible reasons, to start a new business or purchase an existing one.  I am seeing more investment in business, and more purchase transactions.  While we are obviously far from where we would like to be, things seem to be on the right track.</p>
<p>With this in mind, if you are considering investing in a new or exsisting business, here are some things to consider before signing on the dotted line.</p>
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<p><strong>Determining the Value of the Business.</strong> Because business brokers are valuing enterprises all the time, they&#8217;re likely to be better at it than someone like yourself who may buy only one business in the course of your career. But that doesn&#8217;t mean you can&#8217;t educate yourself in advance about ways of valuing a prospective purchase. Two Internet sites you can turn to for some rules of thumb are Bizcomps.com and BVMarketData.com.  Ask to see the seller&#8217;s tax returns, bank statements, accounting reports and any loan applications made by the business and it&#8217;s owners from the past couple of years.  An appraisal is nice to have done, but may be a bit conservative and expensive at the outset.  The best indicator (for most types of businesses) may be the recent track record &#8212; consider the actual revenues and expenses.</p>
<p><strong>Look for seller financing.</strong> Banks often aren&#8217;t willing to make loans for the purchase of a business without a personal guarantee, which makes seller financing essential. Business brokers say that down payments of 30% or more are not uncommon. It&#8217;s usually a good sign when a seller is willing to finance the sale with a low down payment, as it indicates faith not only in their business but in your own prospects as the buyer of the business.</p>
<p><strong>Remember that you&#8217;re buying a lifestyle and livelihood too.</strong> Business brokers point out that many buyers of small businesses aren&#8217;t just buying assets and inventories and leases.&#8221;You have to look at the fact that you&#8217;re buying a job and, hopefully, a decent return on investment,&#8221; says Glen J. Cooper, a certified business appraiser in Portland, Maine. &#8220;So part of what you&#8217;ll want to do is look at how much you can realistically expect the business to be able to pay you for your work, and also how much of a return on your investment you can get in the form of additional profit beyond your own compensation.&#8221;</p>
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<p><strong>Remember the business obligations of those brokering the sale.</strong> As in all transactions including the common real estate transaction, the broker works for one side, which is usual the seller.  Follow the money.  People are motivated in large part by how they are paid.  Even though the broker may be an honest person and answer all of your questions honestly, most of the time the broker works for the seller and not you. Money paid to your own personal lawyer and accountant is a bargain if it results in your getting a better deal, or steering your way from a lousy one all together.</p>
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<p><strong>Consider linking the final price to customer retention.</strong> With many service-related and other small businesses, a significant part of what you&#8217;re buying is the existing client base. With some business sales, the agreed-upon price is based on retaining customers, or a certain percentage of customers, over a period of time. Part of the sales agreement could include a drop in the price if the customer base declines after you take over.</p>
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<p><strong>Get the seller to continue for a while.</strong> In most cases, you should have the previous owner stay on during a transition period following any sale. This can be for as short as a couple of weeks or for several months.  It can aid in training of your new employees, learning processes, dealing with vendors and to smooth introductions to existing customers.</p>
<p><strong>Purchase the good but not the bad. </strong> When purchasing an existing business, remember you are purchasing ALL of that business, both the good aspects and the bad.  There may be known or unknown legal claims (e.g. injuries, unpaid wages), unpaid vendor account, and taxes.  It is usually best to purchase the assets of the business only.</p>
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<p>Given the economy, there may some very good deals out there making this the best of times to purchase a new business.  Be smart and careful, but do not let risk be the sole concern in whether you will be moving forward in your endeavors.</p>
<p>The foregoing was inspired by an <a title="7 tips for buying a business" href="http://www.microsoft.com/business/en-us/resources/startups/business-opportunities/buy-a-small-business.aspx?fbid=usQkzdxOVBI" target="_blank">article</a> written by Joseph Anthony.</p>
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		<title>Holiday tips for our planet</title>
		<link>http://www.mirslaw.com/2011/holiday-tips-for-our-planet/</link>
		<comments>http://www.mirslaw.com/2011/holiday-tips-for-our-planet/#comments</comments>
		<pubDate>Tue, 20 Dec 2011 23:21:28 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

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		<description><![CDATA[This blog entry is not particularly scholarly nor legal in nature.  However, it is the &#8220;time of the season,&#8221; and in researching the City of Seattle&#8217;s recent ban on plastic carry-out bags, I came across some valuable information which I hope you will be mindful of this time of the year. During normal times, Seattleites alone use about 292 million]]></description>
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<blockquote><p>This blog entry is not particularly scholarly nor legal in nature.  However, it is the &#8220;time of the season,&#8221; and in researching the <a title="Plastic Bag Ban Questions" href="http://atyourservice.seattle.gov/2011/12/20/plastic-bag-ban-questions/">City of Seattle&#8217;s recent ban</a> on plastic carry-out bags, I came across some valuable information which I hope you will be mindful of this time of the year.</p>
<p>During normal times, Seattleites alone use about 292 million plastic bags per year, only 13% of which are recycled.  It is commonly said that from Thanksgiving to New Years Day, household waste increases by more than 25%.  If you are curious how much waste you generate and how much is generated State wide, the King County website has a <a title="EcoConsumer Waste Calculator" href="http://your.kingcounty.gov/solidwaste/ecoconsumer/calculator.asp">calculator</a> which is kind of nifty.</p>
<p>According to Seattle Public Utilities, you can recycle these types of holiday refuse:</p>
<p>Clean pie tins, plastic deli/veggie trays and lids (wider than 3 inches), empty eggnog cartons, paper, plastic and metal cups, bottles, cans, jars, and tubs; catalogs, greeting cards, envelopes, cardboard, clean aluminum foil, gift wrap, plastic grocery bags (bundle and tie together) and glossy/shiny shopping bags (reduce waste and bring your own reusable shopping bag instead).</p>
<div>It may be silly to try to &#8220;save the planet&#8221; one person at a time, especially in the shadow of massive ecologic disasters such as the Deepwater Horizon pumped out 4.9 million barrels of oil into the Gulf of Mexico last year.  But this is a fight worth engaging in, it makes one feel better and is the right thing to do.  So do your children and grandchildren a favor, and think about reducing the amount of wrapping and other products that will need to be recycled or thrown in the garbage can.  Recycle all of the holiday refuse you can.  And as a present to yourself, buy some reusable grocery bags and use them all year long.  That would be a nice gift to the planet.</div>
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		<title>Aircraft ‘luxury’ tax resurfaces</title>
		<link>http://www.mirslaw.com/2011/aircraft-%e2%80%98luxury%e2%80%99-tax-resurfaces/</link>
		<comments>http://www.mirslaw.com/2011/aircraft-%e2%80%98luxury%e2%80%99-tax-resurfaces/#comments</comments>
		<pubDate>Fri, 16 Dec 2011 19:29:07 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

		<guid isPermaLink="false">http://www.mirslaw.com/?p=532</guid>
		<description><![CDATA[As Washington State lawmakers grapple in a special session with another huge budget shortfall, numerous revenue ideas have surfaced from various groups and organizations—including a luxury tax on aircraft—to bring the budget into balance.  Dan Namowitz writes in AOPA Online, that the legislature is once again looking for all possible means to raise revenue to address the huge budget deficit in]]></description>
			<content:encoded><![CDATA[<p>As Washington State lawmakers grapple in a special session with another huge budget shortfall, numerous revenue ideas have surfaced from various groups and organizations—including a <a title="Impose a 10% luxury tax" href="http://dor.wa.gov/Docs/Pubs/RevenueOptions/173.pdf">luxury tax on aircraft</a>—to bring the budget into balance.  Dan Namowitz <a title="Aircraft ‘luxury’ tax resurfaces in Washington State  But not among governor’s recommendations" href="http://www.aopa.org/advocacy/articles/2011/111215aircraft-luxury-tax-resurfaces-in-washington-state.html?WT.mc_id=111216epilot&amp;WT.mc_sect=adv">writes in AOPA Online</a>, that the legislature is once again looking for all possible means to raise revenue to address the huge budget deficit in Washington.</p>
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<h3><span style="font-size: 13px; font-weight: normal;">Two plans to tax aircraft have failed in the last two years in Washington state, where aircraft ownership is already among the costliest in the nation, and AOPA remained cautiously optimistic that lawmakers would not move forward with any new aviation taxes.</span></h3>
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<p>“The legislature, with a desperate need for additional revenue, has already thoroughly vetted the idea of increasing taxes on general aviation aircraft,” said AOPA Director of State Government Affairs Mark Kimberling. “And, they have concluded that such an increase—with a resultant decrease in flying activity and increase in out-of-state aircraft migration—would actually do more harm than good in terms of lost jobs and an actual net loss in revenue for the state.”</p>
<p>On Nov. 21, Gov. Chris Gregoire presented lawmakers with a supplemental state budget containing “more than $2 billion in spending cuts, reductions to local revenue sharing and fund transfers to leave a $600 million reserve.”</p>
<p>“The Great Recession—which has lingered longer and resulted in more job losses than any downturn since the Great Depression—has taken an almost unprecedented toll on our economy and on state revenue collections. Over the past three years, we have had to reduce existing and projected spending by nearly $10.5 billion,” she said.</p>
<p>Gregoire’s three-phase fiscal plan does not include a tax on aircraft. However, she planned to review “even more ideas for reforming government” from the public, and said she would announce additional proposals in the coming weeks.</p>
<p>In the current charged atmosphere of street protests and continued economic stagnation, local news coverage has speculated that possible tax increases, such as a half-cent increase in the sales tax to ease the shortfall, might ultimately pass. An <a title="Initiative 1098" href="http://www.sos.wa.gov/elections/initiatives/text/i1098.pdf">initiative</a> to increase income taxes on wealthy residents of the state, backed by Bill Gates Sr., failed last year.</p>
<p>One group, the Economic Policy Institute, is reported to be urging scrutiny of “luxury taxes” on yachts and private aircraft, as well as estate taxes, for additional revenue production.</p>
<p>“Private aircraft have, unfortunately, been caught up in a lot of symbolic rhetoric emanating out of recent protests and discussions regarding income inequality. Yet, the irony is that ‘luxury tax’ proposals like these may take aim at so called ‘corporate fat cats,’ but at closer glance actually hit middle-income aircraft mechanics and other middle-class industry workers the hardest,” said Kimberling.</p>
<p>The defeat in February of using an aircraft excise tax as a funding mechanism for health insurance marked the second time in two years that a levy on aircraft was rejected. AOPA pointed out during that debate that the cost of aircraft ownership, maintenance, and operation in Washington state was already among the highest in the nation.</p>
<p>During that legislative battle, AOPA communicated with the pilot community regularly through action alerts and other updates. Kimberling credited pilots who contacted their lawmakers with getting out the message that a tax would do the state’s aviation industry even more harm.</p>
<p>Now, with lawmakers divided on the approach to take to plug a $2 billion gap, <em>The Olympian</em> newspaper reported that a sales tax increase was gaining momentum, although other lawmakers were calling for an overhaul of the state tax system.</p>
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		<title>What They Don’t Teach Law Students: How to Practice Law</title>
		<link>http://www.mirslaw.com/2011/what-they-don%e2%80%99t-teach-law-students-how-to-practice-law/</link>
		<comments>http://www.mirslaw.com/2011/what-they-don%e2%80%99t-teach-law-students-how-to-practice-law/#comments</comments>
		<pubDate>Tue, 22 Nov 2011 22:33:00 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

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		<description><![CDATA[Law students spend a lot of money to learn dozens of areas of law.  They spend several billions of dollars in tuition in this country each year to learn the history and intricacies of many legal areas.  They cram much learning into a short three year period.  Yet what they do not get, for all that time and money, is]]></description>
			<content:encoded><![CDATA[<p>Law students spend a lot of money to learn dozens of areas of law.  They spend several billions of dollars in tuition in this country each year to learn the history and intricacies of many legal areas.  They cram much learning into a short three year period.  Yet what they do not get, for all that time and money, is much practical training. There are some clinic programs (my school, Gonzaga, has an excellent law clinic program) which teach practicum, but law schools have long emphasized the theoretical over the useful, with classes that are often overstuffed with antiquated distinctions, like the variety of property law in post-feudal England.  <a title="What They Don’t Teach Law Students: Lawyering" href="http://www.nytimes.com/2011/11/20/business/after-law-school-associates-learn-to-be-lawyers.html?pagewanted=1&amp;_r=1">David Segal writes in the New York Times</a>, that more and more clients who are paying big dollars for representation, are actually paying big law firms to train (on the clients&#8217; dime) how to actually <em>practice</em> law. Only three percent of law schools require clinical training.  Instead, law schools tend to push their law review publications, which bring more prestige and notoriety to the schools.  My takeaway from the article is that it is advisable for clients of law firms to demand that they pay only for the lead attorney&#8217;s time, and not the billed hours for interns and low level associates, who are learning &#8220;on the job&#8221; and not providing the true value of what is being billed to the client.</p>
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		<title>Should Police be able to track a vehicle using GPS without a Warrant?</title>
		<link>http://www.mirslaw.com/2011/should-police-be-able-to-track-a-vehicle-using-gps-without-a-warrant/</link>
		<comments>http://www.mirslaw.com/2011/should-police-be-able-to-track-a-vehicle-using-gps-without-a-warrant/#comments</comments>
		<pubDate>Tue, 08 Nov 2011 21:20:17 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

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		<description><![CDATA[The pending U.S. Supreme Court case of United States of America v. Antoine Jones puts modern police tactics in the spotlight of the Fourth Amendment search and seizure law, and it&#8217;s implications are serious. The case in question was decided last year by a D.C. Circuit Court.  As Andrew Dat writes in his blog, the defendant, Jones, was arrested and charged with]]></description>
			<content:encoded><![CDATA[<p>The pending U.S. Supreme Court case of <em>United States of America v. Antoine Jones </em>puts modern police tactics in the spotlight of the Fourth Amendment search and seizure law, and it&#8217;s implications are serious.<span style="font-family: Ebrima, 'Segoe UI', Arial, sans-serif;"> The case in question was decided last year by a D.C. Circuit Court.  As <a title="Supreme Court to Consider Whether GPS Tracking a “Search” Requiring Warrant" href="http://lawblog.legalmatch.com/2011/04/21/supreme-court-to-consider-whether-gps-tracking-a-search-requiring-warrant/">Andrew Dat writes</a> in his blog, the defendant, Jones, was arrested and charged with drug trafficking by the police.  The cops suspected Jones was a narcotics distributor and placed an electronic GPS tracking device on his car.  Using satellite technology, the police were able to follow Jones’s movement about town and collect enough evidence against him to charge him.</span></p>
<p><span style="font-family: Ebrima, 'Segoe UI', Arial, sans-serif;">The problem was that the cops did this without a warrant and when prosecutors tried to put Jones away, Jones raised a Fourth Amendment defense claiming that the GPS tracking device was tantamount to an illegal search and seizure of his car.  Jones faced a life sentence for his alleged crime, but the circuit court agreed with Jones’s argument and vacated his sentence.</span></p>
<p><span style="font-family: Ebrima, 'Segoe UI', Arial, sans-serif;">Traditionally, the courts have held that technology merely enhances what the police could do on their own, there is no violation. Examples of enhancement are as simple as the use of a flashlight, the use of a helicopter, or use of binoculars.  But this new use of technology &#8211; namely a GPS tracker, seems a bit over the top to me.  All searches require a warrant unless there is an exception to the rule.  With the advent of inexpensive GPS tracking devices, I can envision a day when all cars are simply manufactured with a GPS tracker already installed (the black box in modern vehicles do nearly the same thing).  The tracking of a vehicle could become a simple matter of a few computer key strokes at the local police station.  We already live in an age of &#8220;Big Brother.&#8221;  When and where will it end?</span></p>
<p><span style="font-family: Ebrima, 'Segoe UI', Arial, sans-serif;">The Fourth Amendment has always pitted the values of freedom against the need for law enforcement.  The Constitution always seemed to default towards ensuring our freedom.  Is this the line in the sand that needs to be drawn?  It will be very interesting, and important, to see where the U.S. Supreme Court comes down on this decision.  What do you think? </span></p>
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		<title>Recent study reviews efficacy of bicycle helmets</title>
		<link>http://www.mirslaw.com/2011/recent-study-reviews-efficacy-of-bicycle-helmets/</link>
		<comments>http://www.mirslaw.com/2011/recent-study-reviews-efficacy-of-bicycle-helmets/#comments</comments>
		<pubDate>Thu, 20 Oct 2011 02:37:35 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

		<guid isPermaLink="false">http://www.mirslaw.com/?p=518</guid>
		<description><![CDATA[Recent study suggests a bicycle helmet does reduce head injuries, but will not save your face or neck from injury. http://bit.ly/qjy3in]]></description>
			<content:encoded><![CDATA[<p>Recent study suggests a bicycle helmet does reduce head injuries, but will not save your face or neck from injury. http://bit.ly/qjy3in</p>
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		<title>Electric Vehicle charging free during appointments!</title>
		<link>http://www.mirslaw.com/2011/electric-vehicle-charging-free-during-appointments/</link>
		<comments>http://www.mirslaw.com/2011/electric-vehicle-charging-free-during-appointments/#comments</comments>
		<pubDate>Wed, 14 Sep 2011 04:25:12 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

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		<description><![CDATA[Mirsepasy Law Offices added as EV Charging Station during appointments &#8211; http://www.plugshare.com/ Bring your own 110 v cord and plug in!  We support everything that electric vehicles do for our community.]]></description>
			<content:encoded><![CDATA[<p>Mirsepasy Law Offices added as EV Charging Station during appointments &#8211; http://www.plugshare.com/</p>
<p>Bring your own 110 v cord and plug in!  We support everything that electric vehicles do for our community.</p>
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		<title>Accused NASA spy pleads guilty to attempted espionage</title>
		<link>http://www.mirslaw.com/2011/accused-nasa-spy-pleads-guilty-to-attempted-espionage/</link>
		<comments>http://www.mirslaw.com/2011/accused-nasa-spy-pleads-guilty-to-attempted-espionage/#comments</comments>
		<pubDate>Fri, 09 Sep 2011 22:23:42 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

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		<description><![CDATA[A former NASA scientist pleaded guilty Wednesday to attempting to sell classified information about US military satellites.  He admitted guilt in exchange for a proposed 13 year prison sentence (he faced 30 years to life).  CNN reports that the FBI sting operation busted the trader in 2009.  Spies are nothing new.  Unfortunately, it is also nothing new that our own]]></description>
			<content:encoded><![CDATA[<p>A former NASA scientist pleaded guilty Wednesday to attempting to sell classified information about US military satellites.  He admitted guilt in exchange for a proposed 13 year prison sentence (he faced 30 years to life).  CNN <a title="Accused NASA spy pleads guilty to attempted espionage" href="http://bit.ly/mRZ1T2 ">reports</a> that the FBI sting operation busted the trader in 2009.  Spies are nothing new.  Unfortunately, it is also nothing new that our own allies, including this one (Israel) are the ones spying or attempting to purchase illegally gained information about our secret developments and technologies.  While James Bond thrillers are a favorite, in real life, it bothers me when countries that we support with taxpayer dollars turn around and treat us this way.  What do you think?</p>
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		<title>Does right to privacy extend to travel (flight) plans?</title>
		<link>http://www.mirslaw.com/2011/does-right-to-privacy-extend-to-travel-flight-plans/</link>
		<comments>http://www.mirslaw.com/2011/does-right-to-privacy-extend-to-travel-flight-plans/#comments</comments>
		<pubDate>Tue, 30 Aug 2011 22:47:21 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

		<guid isPermaLink="false">http://www.mirslaw.com/?p=516</guid>
		<description><![CDATA[Pia Bergqvist writes in this month&#8217;s Flying Magazine about private airplane operators&#8217; desire to keep their flights private from flight tracking web sites and the like.  The operators view the publishing of their flights as violations of their privacy, which the FAA is mandating in no longer allowing operators to opt out of disclosure of the tail number/flight information dissemination.]]></description>
			<content:encoded><![CDATA[<p>Pia Bergqvist writes in this month&#8217;s <a title="BARR Privacy Battle Continues" href="http://www.flyingmag.com/news/barr-privacy-battle-continues?cmpid=enews083011">Flying Magazine</a> about private airplane operators&#8217; desire to keep their flights private from flight tracking web sites and the like.  The operators view the publishing of their flights as violations of their privacy, which the FAA is mandating in no longer allowing operators to opt out of disclosure of the tail number/flight information dissemination.  This, the operators fear, will be a boon for electronic stalkers, the paparazzi or a businessperson’s competitors.</p>
<p>The National Business Aviation Association (NBAA) and the Aircraft Owners and Pilots Association (AOPA) filed a joint opening brief with the U.S. Court of Appeals for the District of Columbia Circuit opposing the FAA’s major revisions to the Block Aircraft Registration Request (BARR) program. The associations argue that the revisions are illegal and should be invalidated.<strong> </strong></p>
<p>AOPA president and CEO Craig Fuller said: “…just because the government collects information doesn’t mean it should be broadcast over the Internet&#8230;&#8221;</p>
<p>The BARR program, which was put in place in 2000, allowed aircraft owners and operators the option to prevent public dissemination of flight information pertaining to an aircraft’s tail number. But under the new rule, detailed in a notice of modification to the FAA/Subscriber Memorandum of Agreement (MOA) issued on June 3, only certain aircraft with a “Certified Security Concern” are allowed to opt out.</p>
<p>Despite overwhelming opposition from not only industry organizations and aircraft owners and operators, but also civil liberties groups, business organizations and the U.S Chamber of Commerce, to name a few, the FAA put the new rule in place on Aug. 2. In the MOA, the FAA used the government’s focus on openness and disclosure and the Freedom of Information Act to justify its decision.</p>
<p>&#8220;Transparency&#8221; is the buzzword of the 2000&#8242;s thus far, but apparently not everyone supports the concept.  What do you think about the publication of flight plans based on tail numbers?</p>
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		<title>FBI Says Mortgage Fraud Still Prevalent</title>
		<link>http://www.mirslaw.com/2011/fbi-says-mortgage-fraud-still-prevalent/</link>
		<comments>http://www.mirslaw.com/2011/fbi-says-mortgage-fraud-still-prevalent/#comments</comments>
		<pubDate>Mon, 15 Aug 2011 05:39:29 +0000</pubDate>
		<dc:creator>j3fM</dc:creator>
				<category><![CDATA[Latest News]]></category>

		<guid isPermaLink="false">http://www.mirslaw.com/?p=514</guid>
		<description><![CDATA[According to an article by the Associated Press this week, mortgage fraud remains widespread in the depressed housing market, with perpetrators motivated by high profits and little risk of getting caught, the FBI said Friday. The FBI&#8217;s annual report on mortgage fraud said such schemes are particularly resilient and hard to discover, and their total cost is unknown. Real estate firm]]></description>
			<content:encoded><![CDATA[<p>According to an <a title="Article here" href="http://www.npr.org/2011/08/12/139585953/fbi-says-mortgage-fraud-still-prevalent">article</a> by the Associated Press this week, mortgage fraud remains widespread in the depressed housing market, with perpetrators motivated by high profits and little risk of getting caught, the FBI said Friday.</p>
<div id="storytext">
<p>The FBI&#8217;s <a href="http://www.fbi.gov/stats-services/publications/mortgage-fraud-2010/2010-mortgage-fraud-report">annual report</a> on mortgage fraud said such schemes are particularly resilient and hard to discover, and their total cost is unknown. Real estate firm CoreLogic says more than $10 billion in loans were made with fraudulent application data in 2010, the report noted.</p>
<p>Fraud last year stayed at levels seen in 2009 as the housing market remained in distress, providing ample opportunity for schemes, the report said. It predicted that perpetrators would &#8220;continue to seek new methods to circumvent loopholes and gaps in the mortgage lending market.&#8221;</p>
<p>&#8220;These methods will likely remain effective in the near term, as the housing market is anticipated to remain stagnant through 2011,&#8221; the FBI said. The bureau&#8217;s pending investigations into mortgage fraud increased 12 percent last year over 2009, officials said.</p>
<p>The most prevalent schemes involve falsifying financial information to qualify buyers who otherwise would be ineligible for a loan. Other crimes involve inflated appraisals, including schemes that use dishonest appraisals to sell homes at elevated prices. Some get-rich-quick schemes persuade investors to buy rental property or land believing the price will appreciate quickly.</p>
<p>The FBI says the crimes are committed by licensed and unlicensed brokers, loan officers, real estate agents, appraisers and other industry insiders who use their expertise to exploit vulnerabilities in the system. Organized crime groups are also behind some of the fraud, the report said.</p>
<p>&#8220;Mortgage fraud enables perpetrators to earn high profits through illicit activity that poses a relative low risk for discovery,&#8221; the report said.</p>
<p>The top states for mortgage fraud last year were California, Florida, New York, Illinois, Nevada, Arizona, Michigan, Texas, Georgia, Maryland and New Jersey, the FBI reported.</p>
<p>The agency says it is dedicating resources to combat the threat, including an initiative launched in June 2010 called Operation Stolen Dreams that targeted mortgage fraud throughout the country.</p>
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