Rajina Rita Subramaniam splurged the money on lavish products, including jewellery which she never wore, and numerous expensive properties, all of which remained vacant except for one, for which she did not charge rent. In sentencing her in the NSW District Court in Sydney today, Judge Michael Finnane described as "staggering" the sheer size of the amount she stole from ING over a five-year period. The 42-year-old, from Castle Hill in Sydney's northwest, pleaded guilty to 22 counts of obtaining benefits by deception and four counts of dealing with the proceeds of crime. When police went to her workplace, they found 21 boxes stored under her desk and nearby. "When these boxes were searched, police found large quantities of jewellery, fountain pens, champagne, crystal and Michael Jackson memorabilia," the judge said. "Much of the jewellery was still in boxes that had not been opened." The judge said that outwardly, Subramaniam was leading a normal life with her husband in a suburban house and none of the money was used to pay off any of their debt. "The agreed facts demonstrate that she became accepted as a wealthy woman and a very desirable customer of a number of large jewellery firms," the judge said. At times she would spend millions of dollars in a single lunch hour and she lavished gifts on the shop assistants. "Each of them received commissions for sales to her, and giving presents to them, in my opinion, is consistent with her wanting to be accepted and praised," Judge Finnane said. "Her gifts of $1.3 million to one shop assistant and something like $240,000 to another shop assistant are consistent with her wanting to be loved and accepted." The judge said everything she did in stealing the money and using the proceeds "points to someone who got gratification from being able to be thought of as wealthy and generous". He referred to her having frequent sex with an ING supervisor and to her husband's statement that he joined in the sexual activity, which sometimes happened between them in motel rooms or at their home. Subramaniam claimed to police that the frequent sexual intercourse she had with the employee at work was part of her ill treatment by staff. "She claims that part of the reason for engaging in fraud was resentment towards ING and her wanting revenge," the judge said. The judge said while the sexual activity may have been abusive in her mind, it appeared to have been consensual. While she was not mentally ill, she had mental disorders that needed intensive counselling, he added. He set a maximum term of 15 years.

President Obama has accused Syrian government forces of responsibility for "outrageous" bloodshed and called again for Bashar al-Assad to step down as troops sealed off of a rebel stronghold in the city of Homs and bombarded it using tanks, helicopters and artillery. Speaking after a White House meeting with the Italian prime minister, Mario Monti, Obama spoke briefly on Syria. He said: "We both have a great interest in ending the outrageous bloodshed that we've seen and see a transition from the current government that has been assaulting its people." His comments come as the international community struggles to find a common voice with which to confront President Assad. Eyewitnesses said roads in and out of Baba Amr, in the south-east of Homs, were blocked, preventing the evacuation of children or the wounded, and food, water and medicine were running out fast in the besieged suburb. The international community appeared to flounder over a coherent response. The UN secretary-general, Ban Ki-moon, condemned the Russian and Chinese veto of a security council resolution on the crisis over the weekend as "disastrous for the Syrian people". He said the failure to agree on collective action "has encouraged the Syrian government to step up its war on its own people". The UN and the Arab League proposed a joint observer mission, and talks continued over the formation of an ad hoc "friends of the Syrian people" group to put pressure on the Assad regime without help from Moscow and Beijing. Speaking at an international gathering in Sweden, David Cameron said: "It is quite clear that this is a regime hell-bent on killing, murdering and maiming its own citizens … we need to take the toughest possible response we can." But the options the prime minister listed reflected a cautious, incremental approach the UK and other western governments have pursued after the security council debacle. "We also need to work with the [Syrian] opposition to try and help shape their future and assist them in whatever way we can. We also need to put together the strongest possible contact group of like-minded nations," Cameron said. Foreign secretary William Hague said there were no plans to arm Syrian rebels. He would not guarantee that Britain would not become involved in military action, but stressed: "We are clearly not planning military intervention." Amid speculation that the UK could assist the rebels with weapons or other equipment, Hague told Sky News: "Britain is not engaged in that and we haven't done that in any of the conflicts or we certainly don't have any plans to do such. "We are intensifying our contacts with opposition groups, opposition groups mainly outside Syria. "We're also increasing our support for organisations that get food and medical supplies in to people so badly affected by this situation." In the absence of international consensus, there was no sign of any decisive action that might stop the worsening bloodshed in Syria. More than 100 people were reported dead in Homs on Thursday during heavy bombardment by government forces, but the figure could not be independently confirmed in the absence of observers or humanitarian organisations. A local resident, Basil Abu Fouad, said it was impossible to estimate casualties accurately. "We can't count the number of the dead in the rubble. When we pull someone from the rubble, we don't know if they were killed today, yesterday or before," Abu Fouad said by phone from a basement in Baba Amr. "They are using helicopters and mortars and tanks, T-72 [former Soviet] tanks. Hundreds of homes have been demolished and they have come down on the heads of their owners. "Communications have been completely cut off between neighbourhoods. The army have blocked access to the city. Some people tried to escape but they found all the roads were closed. There is no food left in the city. We don't have milk. All the water tanks have been targeted. We don't have medicines. If you go to the shops and try to get in, the snipers up on the roofs will shoot you," he said. "The children will die here. All the people want is to escape. They can smash this place if they want. We just want to get out of there. But they won't allow us."

Barclays announced on Friday that it was capping cash bonuses at £65,000 as it reported a 3% fall in profits to £5.9bn. The bank also admitted it may miss the targets it had set itself for making returns to shareholders. Providing more detail about bonuses than usual, the bank said that the value of bonus per group employee was down 21% year on year to £15,200, while the average value of bonus per employee at Barclays Capital, its investment banking arm, was down 30% to £64,000 - just below the value of the cap. The bank said that annual bonuses for executives and its eight highest paid employees were down 48%. Chief executive Bob Diamond received a bonus in shares of £1.8m in 2010 so, if he is in line with the average, this might indicate that his bonus would be around £900,000. Barclays shares were down 3% at 225.9p in early trading. But the bank admitted that its return on equity was just 6.6% in 2011 - down from 8.8% the year before and well below the target of 13% set by Diamond. "Since setting the target the worse than predicted macro economic conditions, in addition to new regulatory constraints, mean that we may not be able to deliver 13% returns by 2013," the bank said. "We are not satisfied with the return on equity we delivered in 2011 and are committed to delivering steady improvement moving forwards. Our rock solid capital, liquidity and funding positions provide us with the flexibility and confidence to meet the economic and regulatory challenges ahead," Diamond added.

Britain's banks slashed $50 billion (£31.8 billion) from their exposure to France, Italy and Spain during the summer as financial institutions ran scared from Europe's debt crisis, according to the Bank for International Settlements. The latest figures from the Basel-based BIS, "the central banker's bank", revealed that UK banks' total exposure to the three European strugglers had fallen to $430.4 billion at the end of September, against $479.9 billion at the end of June. UK banks' stocks of French, Spanish and Italian sovereign bonds were unceremoniously dumped as bond markets turned on vulnerable European nations. The BIS figures revealed UK bank holdings of French, Italian and Spanish sovereign debt dived 32% to $55.5 billion over the quarter, with holdings of Italian bonds suffering the biggest sell-off. Banks sought safety in German bunds, boosting their holdings by more than $40 billion during the period. The European Central Bank's December move to pump nearly €500 billion (£420 billion) into ailing financial institutions for three years eased the immediate threat of a damaging credit crunch. However, France was stripped of its triple-A credit rating this month, Italy's debt-laden economy is heading into recession and Spanish unemployment broke through five million.

Spain's economy looks set to slip into recession after contracting for the first time in two years in the last quarter of 2011, highlighting the challenge for EU leaders as they meet to find ways to boost growth while cutting budgets. The leaders are meeting in Brussels on Monday with the goal of helping Europe's economy but they have to balance austerity with the need to help countries struggling with dismal economic performance. The finances of neighboring Portugal faced fresh scrutiny by markets on Monday and Spain's prime minister said this year's official growth goal would be missed. Gross domestic product in Spain shrank 0.3 percent in the fourth quarter from zero growth the previous quarter, preliminary data from the National Statistics Institute showed, in line with forecasts in a Reuters poll. Spain has massive unemployment -- around a third of the euro zone's unemployed are Spanish -- and a banking sector that has been hobbled by a collapsed property sector.

Four men, including a serving police officer, have been arrested in connection with Scotland Yard's investigation into payments to police officers by journalists. Police are also carrying out searches of the News International offices in Wapping, east London, and the homes of the four people. A 29-year-old serving police officer was arrested at his place of work in central London on suspicion of corruption and misconduct in public office. The officer, of the Met's territorial policing unit, is the second police officer to be arrested under the Operation Elveden investigation. A 48-year-old man and a 56-year-old man were arrested at their homes in Essex. Another man, aged 48, was held at his home in north London. All three were arrested on suspicion of corruption and aiding and abetting misconduct in public office. Scotland Yard said the arrests were made following information provided by News Corp's own investigation team. Rupert Murdoch set up the management and standards committee in July following the escalation of the phone-hacking scandal. According to well-placed sources, it has been conducting a forensic analysis of payments by all journalists between 2000 and 2006. A statement from the Met police said: "The arrests were made between 06.00 and 08.00 by officers from Operation Elveden, the MPS [Metropolitan police service] investigation into allegations of inappropriate payments to police. "The home addresses of those arrested are currently being searched, and officers are also carrying out a number of searches at the offices of News International in Wapping, east London. These searches are expected to conclude this afternoon. "Today's operation is the result of information provided to police by News Corporation's management and standards committee. It relates to suspected payments to police officers and is not about seeking journalists to reveal confidential sources in relation to information that has been obtained legitimately." All four men were being questioned at police stations in Essex and London, police said. Twelve people have so far been arrested under Operation Elveden. The operation is being supervised by the Independent Police Complaints Commission, and is being run in conjunction with Operation Weeting, the MPS inquiry into the phone hacking of voicemail boxes. It was launched after officers were handed documents suggesting that News International journalists made illegal payments to police officers. Others questioned as part of the inquiry include the former News International chief executive Rebekah Brooks, the ex-Downing Street communications chief Andy Coulson, the former News of the World managing editor Stuart Kuttner, the paper's former royal editor Clive Goodman, the former News of the World crime editor Lucy Panton and the Sun district editor, Jamie Pyatt. Brooks and Coulson are both former editors of the News of the World, which was closed in July at the height of the hacking scandal following revelations that the murdered teenager Milly Dowler's phone was hacked. Deborah Glass, the deputy chair of the Independent Police Complaints Commission, said: "It will be clear from today's events that this investigation is following the evidence. "I am satisfied with the strenuous efforts being made by this investigation to identify police officers who may have taken corrupt payments, and I believe the results will speak for themselves."

US authorities have arrested a man accused of being a lynchpin in a major ATM skimming fraud that stole at least $1.5 million (970,000) from 40 HSBC cash machines in and around New York. The US Attorney's Office published charges against Romanian national Laurentiu Bulat who it alleges acted during 2011 as the "installer" for a gang seeking to steal money from machines in Manhattan, Long Island, and Westchester. The gang installed skimming devices to record account data from the magnetic strip on bank cards as they were used, discovering the PINs using tiny pin-hole cameras. Fake cards were made from the stolen data which was used to remove cash from the accounts. Bulat was arrested on 5 January after being observed by the US Secret Service installing skimming devices at ATMs in Manhattan. "ATM skimmers are high tech bank robbers. Instead of using a gun and a note, skimmers use fake card readers and hidden cameras to steal a customer's information to get to that customer's money and take it. Often it happens completely undetected," said said Manhattan Attorney Preet Bharara. "ATM skimming continues to affect individuals and financial institutions in the New York metropolitan area and around the country," As to others involved in the fraud, police said their investigations were "ongoing." The accused is described as being in the US illegally having overstayed a Visa. If convicted, his stay could be semi-permanent - the maximum jail term is 60 years. Despite having been around since long before Internet fraud stole the headlines, ATM skimming and fraud remains a major problem for banks. The rate of innovation remains high too, and for a simple reason. Although skimming cards is relatively easy, recording the PINs used to verify them is much trickier. An ingenious development from last March showed how criminals had glued down the 'enter', 'cancel' and 'clear' keys on machines in the US in order to force customers to abandon their transactions just after entering PINs. Researchers have even worked out that ATMs could be attacked using thermal imaging to detect small smounts of heat left on keys during PIN entry. The problem has become so serious in Russia that a bank partly owned by the State said it planned to install lie detectors in cash machines in Moscow to double-check on the identities of customers.

Spanish court has acquitted the former head of the government of the eastern region of Valencia, a close ally of new Prime Minister Mariano Rajoy, of corruption charges. Francisco Camps, who resigned in July, was accused of accepting bribes in the form of designer suits worth 14,000 euros ($19,000) between 2005 and 2008 while president of the Valencia regional government. But the jury ruled by a margin of five votes against four that the charges could not be proven after deliberating for three days. “There is no evidence that Camps did not pay for the clothes,” the spokesman for the jury said as he read out the ruling at Valencia’s main court. Camps smiled broadly as the decision was read out while dozens of his opponents who were in the court to hear the verdict jeered. The case, which erupted in 2009, is tangled up in a wider web of alleged corruption and industrial espionage involving several local Popular Party members and Francisco Correa, a businessman with close links to the party. Despite the scandal, Camps was re-elected with a strong majority as head of the Valencia regional government in local elections in May. Camps has been a target of Spain’s so-called “indignant” activists, who have organised mass protests and marches since May against political corruption, the economic crisis and soaring unemployment. The court also acquitted Camps’ former deputy, Ricardo Costa, of charges that he too accepted bribes in the form of designer suits in exchange for contracts. The Popular Party returned to power at the national level under Rajoy last month following a landslide general election win in November. “The Popular Party is very pleased with the outcome of the trial,” the party’s secretary-general, Maria Dolores de Cospedal, told a news conference. Rajoy had stood by Camps. When he resigned as head of the Valencia regional government in July, Rajoy said the move would “not affect the opinion that I have always had of Francisco Camps and his honour”. In August 2009, a court in Valencia had dropped an investigation into Camps. But in May 2010, Spain’s Supreme Court ordered the reopening of the probe following an appeal by prosecutors and the local branch of the Socialist Party.

Two underworld bankers who laundered more than £17million in drug money have been jailed for a total of 17 years. Daniel Keenan, 41, and Andrew Barnett, 45, used a stolen identity to clean up proceeds from a massive cocaine and heroin dealing operation by making currency exchanges They were caught out when police stopped Barnett with £500,000 in cash stuffed into a satchel. The pair were subsequently linked to Ian Kiernan, who was jailed for 20 years in 2001 for his key role in one of Britain's biggest-ever drug smuggling plots. Andrew Barnett (left) and Daniel Keenan (right) laundered the vast proceeds from a cocaine and heroin ring by making currency exchanges Barnett was stopped on 26 November 2009 near Marble Arch carrying a satchel found to contain 535,000 euros in 200 euro notes. He also had a receipt from a nearby money service bureau called Interchange. Convicted blackmailer Keenan contacted the police station a few days later, claiming he had asked Barnett to carry out the transaction, and was promptly arrested on suspicion of money laundering. Investigations revealed Keenan used a stolen identity to set up his Interchange account. Since opening the account in April 2008, Keenan and Barnett had made more than 300 transactions totaling more £17million. The money was generally brought in for exchange in £20 notes in large bags. The pair admitted money laundering but initially claimed the cash came from illicit gambling on horse racing. But after a two-day hearing at Southwark Crown Court they admitted knowing that that bundles of cash had come from drug deals. This is some of the money recovered by police from the pair, who were caught when officers stopped Barnett with £500,000 worth of currency stuffed into a satchel Jailing Keenan for 11 years and Barnett for six years, Judge Nicholas Loraine-Smith said the offences were 'hugely successful' and committed while Keenan was on license from prison. He told Keenan: 'Interchange was visited more than 400 times as you or others delivered cash amounting to a total of £17.5million. 'I accept that initially you thought you were being used to launder the proceeds of illegal gambling. 'But eventually the amounts of money involved must have made it clear that they could only come from the most serious of crimes - sale of Class A drugs. 'You yourself signed for 58 deliveries amounting to £12million while your assistant Mr Barnett signed for about £5 million. 'When police detained Mr Barnett you came up with a number of explanations and produced quantities of false paperwork to try and justify your business which included the use of other people's identities.' Daniel Keenan is here seen on CCTV counting out huge piles of banknotes. Keenan and Barnett laundered more than £17million in organised crime profits Barnett had claimed he was simply acting on behalf of Keenan and was paid £200 each time he want to the Interchange. Drug baron Ian Kiernan had been jailed for 20 years and banned from racecourses for 10 years after a Jockey Club investigation found he was involved in corruption in horseracing. The head of the syndicate, Brian Wright - dubbed The Milkman because he always delivered - was jailed for 30 years in 2007. The link between Kiernan, described as the drug ring's storeman, and the launderers was only discovered in December when police investigated Keenan's mobile phone records. Prosecutor Mark Fenhalls said: 'When Mr Keenan's phone records were looked at they showed that that most of the calls were made to his partner, then his mum, and then Kiernan, in that order.' He was found to have been in contact with Kiernan - who was on temporary licence from HMP Latchmere - on all but one of the days on which transactions of more than £400,000 were processed. Keenan was serving a five-year sentence for blackmail and consiring to defraud the clothes shop Monsoon when he met Kiernan in jail. The court heard Barnett visited Kiernan in prison in 2003, Mr Fenhalls said it was 'inconceivable that Barnett... did not know that he was assisting Keenan to launder the proceeds of cocaine dealing on a vast scale. 'No other explanation or inference sensibly arises from the available evidence.' Barnett, of Twickenham, Middlesex and Keenan, of Egham, Surrey, admitted converting criminal property. Keenan also admitted fraud by false representation, having a fake passport and possession of articles used in fraud, a fake bank card.

Drug smugglers and street dealers could avoid prison in the UK even if caught with heroin, cocaine or thousands of pounds worth of cannabis, under new guidelines on drug offenses published by the Sentencing Council for England and Wales on Tuesday. The new guidelines, to come into force next month, on February 27, were put out following a three-month public consultation. They cover importation, supply, production, permitting premises to be used for drug-related activities, and possession offences. "Drug offending has to be taken seriously. Drug abuse underlies a huge volume of acquisitive and violent crime, and dealing can blight communities. Offending and offenders vary widely, so we have developed this guideline to ensure there is effective guidance for sentencers and clear information for victims, witnesses and the public on how drug offenders are sentenced,” said Lord Justice Hughes, deputy chairman of the Sentencing Council, as quoted by the British media. According to the official website of the Council, the guidelines intend to distinguish the leading players in drug smuggling from those in subordinate roles such as drug mules, who may be coerced or misled into carrying drugs. It will mean that sentences are based on a court’s assessment of the offender’s role, and on the quantity of drugs involved, or the scale of the operation. Reports suggest offenders who play a “limited” role in gangs, including low-level dealers and so-called drug mules, who bring narcotics into the country, could now face community orders rather than jail sentences. This particular draft received major support during the consultations. Drug barons playing a leading role in large-scale offences such as smuggling and supply will continue to face long prison sentences, as will those who sell directly to the public, especially to children. Police have suggested that gang leaders would be able to escape jail by claiming that they were lesser members. “How can a court be expected to differentiate between the person who says, I am very low in the chain, and those high up?” questioned Peter Smyth, chairman of the Metropolitan Police Federation, as quoted by The Telegraph. “No matter how big a role I played, if I was in their shoes and arrested for drugs I would say I was a low-level player or forced into it. If they can see a loophole, then of course they will go through it.” Under the new guidelines, dealers caught with 6kg of cannabis, valued at thousands of US dollars, or 20 ecstasy tablets, could now avoid prison and receive a community sentence. Heroin and cocaine dealers deemed to have played only a “minimal” role and workers in small cannabis “farms” could also escape custody.

London hospitals have written off more than 90% of what they are owed by foreign patients not entitled to free NHS care, BBC London has learned. A Freedom of Information request showed Newham Hospital Trust wrote off 96% of what it had invoiced last year. Meanwhile, Basildon and Thurrock wrote off 97% of what it was owed, having previously recovered £68,061 out of £116,561 of its debt. In total, £7.6m was written off by 33 NHS trusts in the region, since 2009. Across the trusts, a total of £26m is owed by patients, of which £18.4m continues to be actively sought. However, hospital trusts said chasing the money was difficult if patients leave the UK. In a statement, Basildon and Thurrock said: "We scrupulously manage our finances and only write off debt after following the full debt collection process." Continue reading the main story Hospital variations in amount written off Newham Hospital wrote off £345,000 out of £358,000 Basildon and Thurrock wrote off £47,000 out of £48,500 Hillingdon hospital wrote off £335,000 out of £660,000 Luton and Dunstable wrote off 2,000 out of 85,000 South London wrote off £29,000 out of £481,000 All figures relate to 2010-11 All hospitals are required to recover money owed for treating these patients.

The market for cannabis in Britain should be regulated and taxed, and responsibility for drug policy moved from the Home Office to the health department, Sir Richard Branson has told MPs. The Virgin Group head said the 20% of police time and £200m spent on giving criminal sentences to 70,000 young people for possession of illegal drugs in Britain each year would be better spent going after the criminal gangs at the centre of the drugs trade. "It's win-win all round,'' he told the Commons home affairs select committee. Asked about his personal history of drug use, Branson replied: "I would say 50% of my generation has smoked cannabis. I would say 75% of my children's generation has smoked cannabis … If I was smoking cigarettes, I would be very worried." He said that in his own Virgin companies he did not think staff who were found to be taking drugs should be dismissed but instead treated as having a problem, and helped. "There are many people in companies with drink problems or smoking problems," he said. Branson was part of a global commission on drug policy, which includes five ex-presidents and Kofi Annan, the former United Nations secretary general. The body concluded last year that the war on drugs had failed and called for experiments in decriminalisation. He was the first witness at the Commons home affairs inquiry into drug policy. Branson argued that the policy of switching responsibilty for drug policy from the Home Office to the health department had worked in Portugal, where nobody had been jailed for using or possessing drugs in the last 10 years. Portugal was the only country that had decriminalised all drugs. As a result of treating drug users rather than imprisoning them, he said, heroin use and heroin-related deaths had fallen by more than 50%. In Britain, 100,000 young people a year were arrested for drug offences, and 75,000 of them were given criminal records, which meant they had problems in later life in travelling to some countries, he said. "If next year those 100,000 people are not prosecuted for taking drugs, but they are helped, I think the commission would welcome Britain doing that." He said if the sale of cannabis and other drugs were regulated and taxed, then the quality of what was being taken could be controlled. He contrasted the lack of deaths in Portugal with the recent deaths of three teenagers in Britain from taking tablets they wrongly thought were ecstasy, citing the fatalities as an example of the consequences of failing to regulate the illegal market. The Virgin chief admitted he had not read the UK Home Office drug policy statement, which emphasises diverting drug users from prison, but said the 100,000 arrests each year were evidence the policy was not working in practice. Pressed by some Conservative MPs on the committee to come down on one side or the other in the debate over methadone maintenance versus abstinence, Branson said he was no expert, and it was for the MPs to establish what worked best.

One was a flight attendant for the airline and obtained the pilots' uniforms which helped them to bypass airport securityEFE archive A gang which used fake pilots to bypass airport security and smuggle regular shipments of cocaine into the country has been sentenced by the Alicante provincial court, after 13 kilos of cocaine were discovered at their drugs store in Benidorm. The street value of the drugs found there in a police swoop in July 2009 is given at close to half a million €. One of the defendants was a flight attendant for Ryanair who obtained pilots’ uniforms for himself and an accomplice, allowing them to bypass security at Barajas Airport. The attendant, José Antonio H.P., had been under investigation since the start of 2009 and is thought to have been paid 20,000 € for each of the trips that he made as a drugs courier. The two men have each been sentenced to more than seven years in prison. A third gang member who stored and distributed the drugs, and is thought to have been the leader, was sentenced to eight and a half years, while a fourth received four years as an accomplice.

A coast guard officer's "Get back on board damn it!" order to the fleeing captain of the capsized Costa Concordia liner is being printed on T-shirts by a company hoping to inspire Italians to rescue their country from economic crisis. Italians have made a hero of coast guard officer Gregorio De Falco for his angry exchange with skipper Francesco Schettino - who has been blamed for the accident and is now under house arrest accused of manslaughter, causing a shipwreck and abandoning ship. Stefano Ramponi, owner of the Lipsiasoft web agency that is producing the T-shirts and selling them on the Internet for 12.9 euros ($16.63), said they had become an instant hit both in Italy and abroad. "We have had a lot of requests from all over the world, from Brazil, Hong Kong, also from Germany and France, the UK. Everyone is asking us for it," he said. He said he had been criticised by some people for making money out of the January 13 disaster, in which 11 people died and 21 are still missing. But he hoped the slogan will become a rallying cry for all Italians to shoulder their responsibilities and work together to navigate through recession and get the euro zone's third largest economy back on course. "We liked this phrase a lot because it was said by Captain De Falco in an extremely difficult situation, it really impressed us," Ramponi said. "We wanted to... distribute it en-masse...particularly to all the people in Italy who don't concentrate on their jobs, who don't give their all and do harm to Italy in this time of crisis."

Camelot said that the winner scooped the rollover jackpot of £40,627,241 in Friday night's draw although no one has yet come forward to claim the prize. A Camelot spokesman said: "This is fantastic news – we're absolutely delighted to have yet another huge EuroMillions win here in the UK. "We have plenty of champagne on ice and look forward to welcoming the lucky ticketholder into The National Lottery millionaires' club. "Over 2,800 people have become millionaires since The National Lottery began and, to date, our players have raised an amazing £27 billion and counting for National Lottery Good Causes." The success is the seventh biggest UK lottery win. The record is held by Colin and Chris Weir, from Largs, Scotland, who won £161 million on EuroMillions last July.

sheffield-born hard rock drummer Robbie France has died aged 52 at his home in south-east Spain, it has been reported. The Spanish national newsagency EFE quoted ‘family sources’ as saying that the musician, who played with such groups as Diamond Head, Alphaville, UFO, Skunk Anansie and Wishbone Ash, died on Saturday. It said he was buried on Wednesday at Puerto de Mazarron, in the province of Murcia, south of Alicante. Mr France had lived in the Costa Blanca resort for the past three years. He was born in Sheffield in 1959. In the 1970s he emigrated to Australia, returning to the UK in 1982 and joining the hard rock band Diamond Head. Three years later he became drummer with the UFO, replacing Andy Parker. He settled in Puerto Mazaron in 1998 after stints with Skunk Anansie and the German group Alphaville. Last year he published a novel, Six Degrees South, partly set in Mazarron. The report said that the family did not give the cause of death.

The pound posted its biggest weekly decline against the euro in almost three months and gilts dropped as French and Spanish borrowing costs fell at their first debt auctions after their credit ratings were cut. The yield on 10-year gilts rose the most in four months as demand for the relative safety of AAA government bonds eased amid signs global growth hasn’t lost momentum. Reports this week showed U.K. retail sales rebounded in December while U.S. initial jobless claims fell to the least in almost four years. Further advances in gilt yields may be limited next week before a report predicted to show the U.K. economy contracted in the fourth quarter of last year. “There are worries that the U.K. economy is heading back into recession,” said Michael Derks, chief strategist at FXPro Financial Services Ltd. in London. “It would not be surprising to see further weakness of the pound against euro in the near term.”

The British Medical Association, which represents 130,000 doctors and medical students, said two thirds of its members support industrial action which could cripple hospitals and GP surgeries throughout the country. The association rejected cuts to doctor’s pensions despite warning that some hospitals are so financially stretched that patient safety can no longer be guaranteed and that “accidents will happen”. Senior government figures said the reductions in their pensions were “modest” and in line with other public sector staff. A government source said: “It seems a bit rich for doctors to be complaining about cuts and patient care when they leave the NHS as millionaires.” Over the past decade, the average consultant has seen their pay rise by 54 per cent, with less qualified doctors enjoying a rise of 30 per cent. Their pay has recently been frozen, with the average GP now earning about £110,000.

A professional tax adviser from Bedfordshire has been convicted of trying to defraud honest taxpayers of £70 million, HM Revenue & Customs (HMRC) said. David Perrin spent his cut of the stolen cash on expensive second homes, exotic holidays, works of art and luxury cars, a spokeswoman said. The 46-year-old, of Leagrave, Luton, Bedfordshire, was found guilty at Blackfriars Crown Court and will be sentenced next month, she added. Perrin, deputy managing director at Vantis Tax Ltd, devised and operated a tax avoidance scheme which he sold to wealthy taxpayers in order to exploit the law on giving shares to charity, she said. The scheme allowed him to pocket more than £2 million in fees from unsuspecting clients. He used a network of finance professionals to advise more than 600 wealthy clients to buy shares, worth a few pence each, in four new companies he had set up, the spokeswoman said. He then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares simply to inflate their price. The share owners then donated 329 million shares to various unsuspecting registered charities and tried to claim £70 million tax relief on a total of £213 million of income and company profits. This was based on the shares being worth up to £1 each, rather than the pennies they were originally bought for. Perrin also used the bogus scheme to claim money back, the spokeswoman said. The scheme proved so popular that Vantis employees performed a smug celebratory song at their annual conference, to the tune of I will Survive, she said. It included the verse: "They should have changed that stupid law, they should have buggered charity, but they have left that lovely tax relief, for folks to pay to me." Jim Graham, HMRC criminal investigator, said: "With his knowledge of the tax system, Perrin thought that he was one step ahead of both HMRC and the law. "This cynical fraud not only stole millions of pounds from taxpayers, but also conned innocent charities into accepting gifts of virtually worthless shares, just so Perrin could inflate his own criminal earnings." Perrin was charged with cheating the revenue by dishonestly submitting and dishonestly facilitating and inducing others to submit claims for tax relief which falsely stated values of shares which were gifted to charities. He will be sentenced on February 9 and confiscation proceedings are under way, the spokeswoman said.

One of Australia's former leading art dealers, Ronald Coles, faces up to 10 years in jail after being charged today with 87 offences relating to an alleged multimillion-dollar investment art fraud scheme. Mr Coles, 64, was ordered to appear at Gosford police station at 10am today. Fraud Squad detectives formally charged him following an "extremely protracted and legally intricate" two-year investigation into his business affairs. Under the Crimes Act, Mr Coles was charged with 77 counts of "larceny as a bailee" and a further 10 counts of "director/officer cheat or defraud". For more than 30 years, Mr Coles specialised in fine art by some of Australia's most celebrated artists, including Sir Arthur Streeton, Eugene von Guerard, Brett Whiteley and Norman Lyndsay. Advertising on national radio and television, he offered clients an opportunity to boost their life savings through the purchase of investment art, which he bought and sold on their behalf, using their superannuation funds. NSW Police launched Strike Force Glasson in January 2009 after a Fairfax investigation unearthed dozens of investors who were missing millions of dollars in lost art and money, all allegedly retained by Mr Coles. Today's police charges relate to more than $8 million in financial loss to a total of 43 clients nationwide. Mr Coles failed to make conditional bail of $50,000. It is understood he offered a car and paintings as surety but they were refused. He is due to appear at Gosford Local Court shortly.

The knock at the door did not unduly disturb the man relaxing on the terrace of the £1.6 million villa overlooking the Caribbean. Even when his wife opened it to discover members of the Dominican Republic’s armed police outside, Darren Patrick Nally was unfazed. He was sure his secret was safe: he was not Nally, a man who said he was an Irish singer and had already been detained in prison on charges of failing to pay his debts. In fact he was Michael Brown, a 45-year-old British fraudster whose web of lies and deceit had made him millions – £2.4 million of which he had donated to the Liberal Democrats for their 2005 election campaign, becoming their biggest single donor. As he was arrested for unpaid rent at a former apartment, Brown was nonchalant. At the police station he told the local assistant prosecutor, Elizabeth Rijo, that he would pay the debt and be back home in time for dinner.

Authorities say a Russian ship suspected of delivering weapons to Syria has anchored off Turkey’s coast. A Foreign Ministry official said Turkish coast guard and customs officials would board the Chariot on Saturday before allowing it to dock at the port of Iskenderun. The official spoke on condition of anonymity in line with government rules. 0 Comments Weigh InCorrections? inShare The ship had made an unscheduled stop in Cyprus, technically violating an EU embargo on arms shipments to Syria. Cypriot authorities allowed it to leave Wednesday after the ship’s owners said it would not head for Syria. Turkey, citing navy intelligence, said the ship nevertheless made its way to the Syrian port of Tartus after leaving Cyprus. U.S. officials said Friday they had expressed concerns to both Russia and Cyprus.

Short-term lender Wonga.com has announced that it is taking down information on student finances from its website following accusations it was encouraging undergraduates to take out one of its high-interest loans. Earlier Wonga.com came under severe criticism after its website claimed that its loans can offer students "a little more financial freedom and independence". The claim attracted outrage on Twitter. One user, Neale Gilhooley, tweeted: "A pox on loan company #Wonga offering students loans at a sharking 4,214pc APR." On the "student loans" section of its website, Wonga.com says these government-backed loans – despite their very low interest rates – could encourage people to borrow too much. Student loans currently attract interest at 1.5pc or 5.3pc, depending on when they were taken out. "It's pretty hard not to get carried away when you're a student on a budget and have the option to borrow large amounts of money with a student loan. But the problem with student loans is that they potentially encourage you to live beyond your means," the website says. "They're intended for living and education costs, but it's all too easy to fritter away the money once you have it. Wonga encourages responsible borrowing because, depending on your trust rating, you can borrow as little as £1 up to £1000, as long as you can repay it within a month."

Banks are hoarding the European Central Bank's record 489 billion-euro ($625 billion) injection into the banking system, thwarting attempts by policy makers to avert a credit crunch in the region. Almost all of the money loaned to 523 euro-area lenders last month wound up back on deposit at the Frankfurt-based central bank instead of pouring into the financial system, ECB data show. Banks will use most of the three-year loans to meet their refinancing needs for this year and next, analysts at Morgan Stanley and Royal Bank of Scotland Group Plc estimate. “It's illusory to think that the measure will translate into credit generation,” Philippe Waechter, chief economist at Natixis Asset Management in Paris, said in an interview. “It will assuage some of the anxiety banks have regarding their liquidity needs. But they've engaged into a massive overhaul of their strategy and shrinkage of their balance sheets, which is, coupled with the deteriorating economy, not compatible with increasing credit.” Governments are urging European banks to keep lending to companies and individuals while requiring them to raise an additional 114.7 billion euros of core capital by June to weather a deepening sovereign-debt crisis. Instead of raising equity, most lenders across Europe have vowed to meet capital rules by trimming at least 950 billion euros from their balance sheets over the next two years, either by selling assets or not renewing credit lines, according to data compiled by Bloomberg. ECB Deposits That has stirred concern among policy makers that banks will cut lending and throttle growth in the euro region. Banks have been parking almost all extra liquidity from the ECB loans back at the central bank. Barclays Capital estimates firms used 296 billion euros of the Dec. 21 three-year loans to replace maturing shorter-term ECB borrowings. That left only 193 billion euros of additional money for the financial system. Overnight deposits with the ECB have jumped by about 223 billion euros since the loans to a record 486 billion euros, suggesting the central bank funds haven't so far reached customers. Banks account for about 80 percent of lending to the euro area, making them “crucial to the supply of credit,” according to recently installed ECB President Mario Draghi. By contrast, U.S. companies rely more on capital markets for financing, selling bonds to investors. Refinancing Needs The ECB lending, and a follow-up loan offering on Feb. 28, won't ease the pressure on banks to shrink, say analysts including Huw van Steenis at Morgan Stanley in London. “The ECB loans will largely be used to pre-fund 2012 and some of 2013's bank refinancing needs, but it will not stimulate lending,” Van Steenis said. They will “just stop it falling off precipitously.” Euro-area banks have more than 600 billion euros of debt maturing this year, the Bank of England said in its financial stability report last month. The first ECB loan offering should help cover about two-thirds of that amount, Goldman Sachs Group Inc. analysts say. Morgan Stanley's Van Steenis estimates banks may reduce assets by as much as 2.5 trillion euros in two years, a process known as deleveraging. The volume of loans to households and companies in the 17- nation euro area shrank in November for the second consecutive month, the ECB said on Dec. 29. Loans were still up 1.7 percent over the year-earlier period, slowing from a 2.7 percent increase in the 12 months through October. Merkel, Sarkozy When granted, loans are getting costlier for borrowers. Since July, interest margins have increased, with investment- grade borrowers in Europe paying an average of 91.6 basis points more than benchmark rates, up from 84.4 basis points during the first half of 2011, according to data compiled by Bloomberg. A basis point is one-hundredth of a percentage point. “We must avoid a credit crunch for our economies,” European Union President Herman Van Rompuy said on Jan. 9. “The recent measures by the European Central Bank on a long-term lending facility for the banks are welcome in this context.” The European Banking Authority, which oversees the region's regulators, asked banks on Dec. 8 to retain earnings, curb bonuses and raise equity to boost core capital before resorting to cuts in lending. The EBA followed both French President Nicolas Sarkozy and German Chancellor Angela Merkel in urging banks to keep lending. Sarkozy said on Oct. 27 that he had asked firms to shift “almost all” of their dividends into strengthening balance sheets and to make bonus practices “normal.” Merkel said on Oct. 9 she was “determined to do whatever necessary to recapitalize the banks to ensure credit to the economy.” ‘No Credit Crunch' Bankers have said they haven't restricted lending and that demand for credit is slowing as growth slows. “All banks I talk to keep lending to small- and medium- size enterprises and households,” Christian Clausen, president of the European Banking Federation, an industry association, said on Dec. 9. “That part of the bank will keep rolling.” There is “no credit crunch,” Frederic Oudea, chief executive officer of Societe Generale SA, France's second- biggest lender, and chairman of the French Banking Federation, said last month. “The reality is that credit is available,” he said in an interview on BFM radio on Dec. 16. Even so, companies across Europe say credit is tightening. ‘Double Punch' In France, where credit to the private sector increased by 3.7 percent in November compared with a year earlier, the majority of the country's company treasurers said they encountered “very strong tensions” in negotiating bank loans, with more than 50 percent of respondents saying the process led to more expensive terms, according to a December survey by the French Association of Corporate Treasurers. The majority of those polled said obtaining bank financing was “as difficult as at the end of 2008,” after Lehman Brothers Holdings Inc. collapsed. U.K. banks expect to toughen their criteria on loans to companies and households in the first quarter because of strains in the wholesale funding market, the Bank of England said Jan. 5in its fourth-quarter Credit Conditions Survey. Belgian credit growth slowed to 3.1 percent in the 12 months to the end of October, from 3.6 percent at the end of September, the country's central bank said on Dec. 12. In Italy, some companies with annual sales of 30 million euros to 40 million euros are charged as much as 10 percent interest on loans, Emma Marcegaglia, chief of the country's Confindustria lobby group, said in an interview on Dec. 20. Lending to businesses and consumers grew at the weakest pace in a year, the Bank of Italy said today. Draghi's Priority With the ECB's injection, “deleveraging may happen in a more orderly way, but it doesn't mean it will be painless,” said Alberto Gallo, head of European credit strategy at RBS. Banks are faced with high long-term financing costs, a deteriorating economy and difficulties raising capital, he said. “It's what I call the double punch: A combination of negative growth and banks' deleveraging will affect lending activity.” Even the ECB's Draghi, who has made it one of his priorities is to keep credit flowing into the economy, said the central bank's loan offerings may fail to achieve that goal. “Monetary policy cannot do everything, but we're trying to do our best to avoid a credit crunch that might come from a lack of funding,” Draghi said Dec. 19 at the European Parliament in Brussels. “We have to be extremely careful here, because there may be other reasons that create a credit crunch.” Draghi may be wary of the U.S. experience with multiple rounds of bond purchases. That so-called quantitative easing hasn't stimulated lending, Natixis's Waechter said. ‘Kick the Can' “Lending really picked up when the economy got better,” he said. The ECB cut its forecast for euro-area economic growth in 2012 to 0.3 percent on Dec. 8 from a September prediction of 1.3 percent. The central bank expects the economy to expand 1.3 percent next year. In the U.S., almost all categories of bank lending fell in 2009 and 2010 and didn't start improving until last year, when the Federal Reserve stopped its second wave of quantitative easing, according to data by the U.S. institution. Banks increased their holdings of Treasury and agency securities in 2009 and 2010, showing they were using the Fed's cheap money to own safe government paper. Because quantitative easing tends to improve capital markets first, the healing will be even slower in Europe given its reliance on banks for borrowing, according to Gallo.

The covert activities were undertaken as part of an operation to infiltrate and prosecute a major Colombian-Mexican narco-trafficking organization moving cocaine from Colombia to Mexico and the United States. The undercover operation, detailed in Mexican government documents obtained by the New York Times, first came to light via a Monday dispatch by Times reporter Ginger Thompson. The documents "describe American counternarcotics agents, Mexican law enforcement officials and a Colombian informant working undercover together over several months in 2007," Thompson reported. "Together, they conducted numerous wire transfers of tens of thousands of dollars at a time, smuggled millions of dollars in bulk cash—and escorted at least one large shipment of cocaine from Ecuador to Dallas to Madrid." The documents "show that in 2007 the authorities infiltrated" the operations of an accused major Colombian cocaine trafficker, named Harold Mauricio Poveda-Ortega, Thompson wrote. Poveda-Ortega, also known as the Rabbit, "was considered the principal cocaine supplier to the Mexican drug cartel leader Arturo Beltran Leyva." Leyva was killed in 2008 in a shootout with Mexican naval forces. Poveda-Ortega was arrested in Mexico City in November 2010. The Mexican government documents include testimony from a DEA special agent "who oversaw a covert money laundering investigation" into Poveda-Ortega, Thompson reported. The documents form part of the file supporting a Mexican Foreign Ministry extradition order for Poveda-Ortega from last May 2011. The United States, however, has declined to indicate whether Poveda-Ortega was extradited to the United States, Thompson writes. A Justice Department spokeswoman Laura Sweeney similarly told Yahoo News Monday that the department is "not in a position to comment on the specific matter." The Drug Enforcement Administration defended the undercover operation in a written statement given to Thompson. "Transnational organized groups can be defeated only by transnational law enforcement cooperation," the agency wrote. "Such cooperation requires that law enforcement agencies — often from multiple countries — coordinate their activities, while at the same time always acting within their respective laws and authorities." Former DEA agent Robert Mazur, who posed as a money launderer in a similar undercover DEA investigation targeting the banks supporting the Medellin drug cartel, said such undercover operations are necessary and legitimate. Covert drug stings are critical, he says, in lining up evidence to successfully prosecute the top command and control figures of organized crime cartels. "This is a law enforcement technique that has been used for decades," Mazur told Yahoo News in a telephone interview Monday. "If we were to embrace the concept that these undercover money laundering operations shouldn't be conducted because in a small way, they for a brief period of time create a short term benefit for the criminal, we would be doing criminal organizations around the world the greatest favor they could get. We would be closing door to one of the most effective methods available to attack what law enforcement calls the command and control of these global organizations." The organizations targeted in these intricate DEA stings "are not people selling dime bags of crack on the street, but people trying to create terrorists states around the world," continued Mazur (Mazur, who retired from the DEA in 1998, has recounted his experience infiltrating the BCCI bank accused of money laundering for the Colombian drug cartel, in a book, The Infiltrator.) Mazur also disputed any comparison between the undercover DEA case exposed by the Times Monday and the recent controversy over "Fast and Furious," the Bureau of Alcohol, Tobacco and Firearms (ATF) program that allegedly put guns in the hands of Mexican drug gangs. "I would never agree in any circumstances it's worthwhile to put 2,000 weapons in the hands of criminals," he said. "Each of these operations needs to be professionally managed and individually scrutinized. This one, from what I read, is very common place, and I don't see anything in there that disturbs me in the least." Recent DEA undercover operations have led to the apprehension and successful prosecution of two major global arms traffickers, including the Russian-born, so-called "merchant of death" Viktor Bout, who was convicted in November on four counts of plotting to sell anti-aircraft guns and other weapons to Colombia's FARC rebels; and the Syrian-born "Prince of Marbella," Monzer al-Kassar, who was sentenced by a New York court in 2009 to 30 years in prison.

 Greeks are emptying their bank accounts, Italians are proposing that the Roman Catholic Church begin to pay nearly $1 billion in property taxes on lucrative hotels and businesses, and in the UK, protesters sans jobs have settled near 10 Downing in the wake of the nation’s biggest general strike in years. Spain has seen well-dressed panhandlers in Madrid. The Netherlands report higher bankruptcies and lower exports. French banks are cutting thousands of jobs. And in bailed-out Portugal, two religious and two civil holidays – weekdays off – will now fall on weekends, even as healthcare costs there have suddenly doubled in many hospitals. All across Europe, the severity of belt-tightening and public anger has brought a new stream of “austerity stories” to the fore: job cuts and their effect, new instances of ethnic hate, worry about social stability. Rising right-wing violence The majority of these stories flow out of Europe’s southern tier, the “less competitive” economies. Two Senegalese street traders in a Florence market were shot and killed Dec. 13 by a right-wing fanatic and three wounded. Higher piles of uncollected garbage sit on Greek streets and there’s an increase of drugs and crime there. Immigrants who used to be welcome labor five years ago in Greece, Italy, and especially in Spain, are now subject to heavy ID checks and public frowns, and there are more spasms of violence by vigilante groups. At times, the surly climate means that “Anyone who might pass for migrant runs the risk of being beaten up,” says Judith Sunderland of Human Rights Watch Europe. “There’s a gloomy mood… in ordinary neighborhoods that I visit… worry about jobs, benefits, social security and the cost of living,” says Pap Ndiaye, social historian at the Paris School for Advanced Studies in Social Sciences. “On top of that, minorities are concerned about backlash or adding problems to the general population. A few years ago, minorities with degrees were leaving France for Great Britain but now the UK is no longer so hospitable. Now we are seeing a phenomenon of looking to the Americas. More professionals are moving to Montreal, for example… with no plans to come back to France.” Belt-tightening across the spectrum To ease austerity, Greece is selling ferryboats to Turkey and what appear to be third-world items like string, used auto parts, and TV antennas to improbable places like the Bahamas and the Marshall Islands. Italy this week said it will release some 3,300 prisoners with less than 18 months on their sentence – remanded to their homes – to save an estimated $500,000 a day. As Greece ekes out its EU bailout loans quarterly – the next tranche is still under negotiation – ordinary folks are depleting their bank accounts. The governor of the Greek central bank, Georgios Provopoulos, recently told parliament, "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November, the decline continued on a large scale.” The effect is to reduce the ability of banks to lend, he said. Some of the austerity effect may be indirectly positive. In Spain, archeologists outside Seville are glad that the building craze of the past 10 years has been halted, since planned shopping centers were to be erected on unexplored Copper Age settlements. Spanish police have also cracked down on a sophisticated forgery ring that was printing 50 euro notes out of a canning factory. In Italy, the 950 members of parliament that make nearly $200,000 a year are expected to cut their pay as the new government of Mario Monti seeks to deal with a cumulative 1.9 trillion euros in debt. Italy’s politicians earn twice that of French and German counterparts, and four times that of Spanish. Strains in northern Europe Yet various stresses and strains owing to new fracturing in Europe are not restricted just to the southern tier. Britain reports a 17-year high in unemployment even as EU figures show it has the 2nd highest living standard in Europe. London riots last August took place mainly among have-nots. Prime Minister David Cameron decided last week to opt-out of a German-French-engineered intergovernmental EU treaty designed to force discipline on EU states and stop future crises, seen as possibly isolating Britain. The decision highlighted an earlier decision by the town council of Bishop’s Stortford to alter an official 46-year old “sister city” or “twinning” relationship with the German town of Friedberg, near Frankfurt. The council is made up of mostly Tory or “euroskeptic” politicians and critics chided the town for downgrading the sister city status at a time of drift of European unity. More pertinently, perhaps, official November figures in the Netherlands, a more competitive state, show that some 610 businesses declared bankruptcy, an increase of 85 from October, and up from an average of roughly 500. Meanwhile, Dutch exports declined for the first time in two years in October. Dutch finance minister Jan Kees de Jager told reporters this week the country faces recessionary times and said there “are no taboos” in what may be cut in the budget. “We felt this coming. It is certainly not positive,” he said. “There are no easy times ahead of us.” The Netherlands will cut an estimated $24 billion under austerity measures, though the Freedom Party of anti-Islam politician Geert Wilders says it will not vote for cuts without a promise to end some $6 billion in foreign development aid.

Spanish and Italian police made five arrests while busting a drug-trafficking ring that for years smuggled cocaine from South America to Europe, investigators said on Friday. The group arranged for narcotics to be put on merchant ships headed to Europe. Just before the vessels arrived at their destination, the smugglers would dump cocaine packages overboard, Spanish police said in a statement. Members of the gang waiting in inflatable boats would then pick up the cocaine and take it to shore, from where it was distributed to customers in Spain and Italy, officials said.Two members of the group were detained in the Italian port city of Genoa in March in a joint operation by Spanish and Italian police. Police detained another three members of the group, including its leader, three months later in the northwestern Spanish coastal region of Galicia. "During the search of the home of the ringleader, police found a vault camouflaged behind the wall of the cellar, which housed security cameras that monitored the rest of the house as well as two large safes, cash, valuable watches, computer equipment and documents," police said in the statement. Police also seized 55 kilos (120 pounds) of cocaine, three cash-counting machines and five cars. Spain is the main gateway to Europe for cocaine from Latin America and for cannabis from north Africa

 I understand that Hague, like the Chancellor, now believes this will happen soon. Osborne told Cabinet colleagues on Monday that the Merkel-Sarkozy plan for greater fiscal discipline within the eurozone was no solution to the current  crisis. Rather, he said, ‘it was like standing over a man having a heart attack and telling him that to avoid one in future he should do more exercise and cut down on cholesterol’. This view that the euro is unlikely to survive is why there are, so far, few worries about Britain being isolated by the eurozone bloc and its allies. The Government is also confident that the differences between the countries in the single currency will remain – that the Netherlands and Finland will continue to take a more liberal attitude to financial services and the single market than the French and the Italians. But there’s little doubt that Cameron’s decision to wield the veto changes Britain’s relationship with the other members of the European Union. The days of Britain carrying on down the same route as the rest of Europe, just at a slower pace, are now over. As one of Cameron’s closest allies says: ‘We are now, inevitably, en route to a very different destiny.’ ... but one rift is healing, at least Labour’s failure to capitalise on the weakening economy has led to renewed tensions within the party’s ranks. Ed Balls, the Shadow Chancellor, is the target of much of this backbiting. Shadow Cabinet sources complain he is more interested in justifying his record in office than winning the argument about what to do now. Balls’ detractors argue that his bellicose statements are drowning out Ed Miliband’s message.

Glenn Mulcaire, the private eye at the centre of the News of the World phone hacking scandal, has been arrested by Scotland Yard detectives pursuing a fresh investigation into phone intercepts, according to a person familiar with the inquiry. Officers working on Operation Weeting – the Metropolitan Police’s second probe into phone hacking at News International, which owned the now-defunct Sunday tabloid – announced on Wednesday that they had arrested a 41-year-old man who was being held on suspicion of conspiracy to hack voicemail messages and perverting the course of justice.  Mr Mulcaire is the 16th person to be arrested under the new operation, and has already served a six-month prison sentence in 2007 after pleading guilty to intercepting phone messages. He was arrested at his home in Surrey in a dawn swoop and held in a south London police station. Detectives on Operation Weeting have used the private investigator’s notebooks – which contain the names of nearly 5,800 potential victims and run to around 11,000 pages – as the basis for their investigation, trawling through the documents to identify those who may have been hacked. The hacking scandal was reignited this summer when it was revealed that the News of the World had hacked into the voicemail messages of the murdered schoolgirl Milly Dowler after she went missing in 2002, leading her parents to believe that she was still alive. Last month, Mr Mulcaire released a statement through his lawyer, denying that he had deleted voicemail messages on Ms Dowler’s phone. “[He] did not delete messages and had no reason to do so,” the statement read. The Financial Times could not reach Mr Mulcaire’s lawyer for comment on Wednesday. Chris Bryant, a Labour MP and suspected hacking victim, told the FT he was “quite encouraged” that Mr Mulcaire had been taken in for questioning. “I always thought this was a logical next step, but not one [the police] would take unless they had sufficient fresh evidence to put to [Mr Mulcaire], and it seems now they do,” he said. News of the arrest came as lawyers for Andy Coulson, the News of the World’s former editor, argued in the High Court on Wednesday that the tabloid’s parent company should continue to pay Mr Coulson’s legal bills arising from the criminal investigation into phone hacking. It emerged during the course of Mr Coulson’s evidence that News Group Newspapers – a subsidiary of News International – had continued to reimburse Mr Coulson for legal fees relating to his involvement in the judge-led phone hacking inquiry and parliamentary select committee hearings. The court heard that Mr Coulson had received a letter from Tom Mockridge, the chief executive of News International, in August informing him of an “immediate cessation” of payments in relation to criminal legal fees.

Don't just book it, Thomas Cook it. So runs the slogan. Would you? Here's interim (that's reassuring) chief executive Sam Weihagen doing his safe-as-houses routine: "It's business as usual. We are trading within all our covenants. We have all the protection in place like any other travel company, and customers should not worry at all." Well, not quite like any other travel company. Thomas Cook of course holds an Air Travel Organisers' Licence from the Civil Aviation Authority which means customers should get their money back in the event of calamity. But the simple fear of being stranded a week after passengers of Austria's Comtel Air had to bribe pilots with £20,000 just to return to Birmingham is bound to unsettle would-be customers. There's a circle at work here and it is vicious. Given the choice between a similarly priced holiday with Thomas Cook or, say, Thomson, why would you risk the former? To counteract this, Thomas Cook might have to slash prices. That will eat into margins, cut profits and put banking covenants at risk. It might very quickly find it needs to borrow even more money. The company insists: "This is a robust business that has a strong future". We'll see.

Britain's entire press stands in the dock at an inquiry into media standards, said a lawyer representing victims of press intrusion and phone-hacking by Rupert Murdoch's News of the World. David Sherborne, who is representing 51 "core participants" at an inquiry set up as the hacking scandal engulfed News Corp's British arm, said Wednesday that "tawdry" tabloids were guilty of blackmail, bribery and vilification. He said his clients had endured lies, harassment and other "despicable" actions from the press and that phone-hacking might only be the tip of the iceberg. "It is the whole of the press, and in particular the tabloid section of it, which we say stands in the dock," he said. "It is time we had change and by that I mean real change." The Leveson inquiry, due to last a year, will make recommendations which could have a huge impact on the industry and lead to tighter regulation and, at the least, an overhaul of the current system of self-regulation. Lawyers for Britain's major newspaper groups have already pleaded for the essence of that system to remain and said that if anything, the press needed more freedoms. But in a scathing and detailed attack on newspapers, particularly the notoriously aggressive tabloid press, Sherborne said: "We are here not just because of the shameful revelations which have come out of the hacking scandal, but also because there has been a serious breakdown of trust in the important relationship between the press and the public." "The press is a powerful body. They have a common interest and a self-serving agenda," he told the inquiry. Sherborne said revelations that a private detective, jailed for phone-hacking in 2007 along with the News of the World's former royal reporter, had carried out more than 2,000 tasks for the paper suggested that there were about 10 stories in the tabloid every week from the illegal practice. He listed details of some of those who had been targeted, starting with the parents of Milly Dowler, a missing schoolgirl who was later found murdered. It was the revelation that her phone had been hacked while she was missing that changed attitudes to the issue. Within days, News Corp withdrew its bid to buy the 61 percent of broadcaster BSkyB it did not already own and its British newspaper arm News International closed down the 168-year-old News of the World. It also prompted Prime Minister David Cameron to order the inquiry.

THE Bank of England warned today that the eurozone debt crisis is the “single biggest risk” to the UK recovery as it forecast a dramatically increased threat of a double-dip recession next year. Its quarterly inflation report revealed a greater chance of the economy contracting in the first three quarters of 2012, compared with its August forecasts, as eurozone and banking concerns and squeezed household budgets continue to weigh on growth. The Bank slashed its central - or most likely - growth estimate to no more than 1 per cent in both 2011 and 2012 from previous forecasts of around 1.5 per cent and 2.2 per cent respectively. The worsened prospects for the UK economy mean inflation is likely to fall far quicker than previously estimated, hitting the Government’s 2 per cent target in the second half of next year before falling to as low as around 1.3 per cent in 2013. Bank governor Sir Mervyn King warned the “journey to a more balanced world economy will be long and arduous”. He said UK economic activity will be broadly flat until the middle of next year and added that the country faces a “difficult economic environment”. Today’s report backs the City’s view that the Bank will keep interest rates on hold for the foreseeable future and add another £75 billion to its quantitative easing programme by February. Vicky Redwood, chief UK economist at Capital Economics, said: “Even the Bank’s downgraded growth forecasts still look optimistic to us - we expect zero growth next year.”

Life is not easy for the financial market traders who are making things so hard for euro zone policymakers. There are no pumped-up traders cheering from their screens as Italy's bond yields rise or as France gets sucked into a debt crisis which has already forced Greece, Ireland, and Portugal to seek international bailouts. The mood is weary and fraught. Bond traders see their own business throttled off by the same market forces that squeeze Italy's public finances and stir speculation about France's triple-A credit rating. "Things have felt almost as bad as it was back during the Lehman days in terms of liquidity - it is increasingly hard to get any business done and, to be honest, we think it is going to get worse," a London-based bond trader said. "Two-way markets have gone, the size of business you can get done at these bid/offer rates is minimal, bonuses and jobs are being cut. It's depressing and what is worse, there is no guarantee that anything is going to be better next year." Talk to fund managers and it is easy to see why a debt crisis which has mutated into an existential crisis for the euro is not translated into a bonanza for traders. "What if the currency union falls apart? Our premise is that it doesn't happen. (But) if you think that is going to happen, don't buy equities. Don't buy anything. Just go and hide," a London fund manager running money for institutional investors said. UNRELENTING STRESS As investors stampede to exit some euro zone bond markets, price swings have become bigger and the business of trading -- which relies on finding buyers or sellers before the market moves against you -- has become harder. "People are just exhausted because of the intensity of what is going on," said a bond salesman in London who has been working in the financial market for decades. "It is unbelievable stress and it is unrelenting. People are just hunkered down and working their socks off as everything is just more difficult -- hedging your risk, avoiding losses, everything." There is somewhat less gloom in equity markets, where investors are still trying to spot pockets of value. But the extent to which stock markets have been moving in lockstep with the price of Italian, Spanish, or French bonds in recent days means that trading behavior is far from normal even in equities. "Over the past few days there have very quiet periods punctuated by mad dealing frenzies," said Yusuf Heusen, sales trader at IG Index in London. "The quiet periods have been really very quiet as traders have not been taking on much risk other than to short the euro markets. The busy periods are absolutely manic as everybody wants to get on at the same time and generally same direction and sell offs are extreme as a consequence."

Bank governor Sir Mervyn King sent a stark message to political leaders as he flagged an unresolved eurozone debt crisis as the "single biggest risk" to the economy. But despite cutting forecasts, some experts accused the bank of being too optimistic and have predicted another multibillion-pound injection into the economy as early as next month. In its quarterly inflation report, the bank slashed its central, or most likely, growth estimate to around 1% in both 2011 and 2012 - but compared to previous forecasts the Bank's projections reveal a greater chance of the economy shrinking in the first three quarters in 2012. The forecasts assume the problems in the eurozone do not deepen, quantitative easing is maintained at current levels and interest rates stay at record lows. The worsened prospects for the UK economy mean inflation is likely to fall far quicker than previously estimated, hitting the Government's 2% target in the second half of next year before falling to as low as around 1.3% in 2013. Sir Mervyn, who was formally knighted at Buckingham Palace on Tuesday, said UK economic activity will be broadly flat until the middle of next year and added that the country faces a "difficult economic environment". The bank's report backs the City's view that interest rates will be kept on hold for the foreseeable future and another round of quantitative easing (QE) will be rolled out before February. But some economists were still not convinced. Vicky Redwood, chief UK economist at Capital Economics, said: "Even the bank's downgraded growth forecasts still look optimistic to us - we expect zero growth next year."

former police officer who admitted his part in a £365 million VAT fraud has been jailed for 10 years and three months. The conspiracy that Nigel Cranswick directed has taken the equivalent of 25 years of work to investigate, Judge Brian Forster said. The 47-year-old ex-South Yorkshire Police officer was a director of Ideas 2 Go, and, despite its modest base in a Sheffield business park, he claimed it bought and sold £2 billion worth of goods in just eight months. He has since admitted that the firm's trading, largely in mobile phones and computer software, was fictitious, and the aim was to generate paperwork from fake sales in order to claim back a fortune in VAT from HM Revenue and Customs. Judge Forster, sitting at Newcastle Crown Court, said: "This case concerned planned dishonesty resulting in the loss to the Revenue in the region of £365 million. "There were purported sales of billions of pounds. "The prosecution rightly described the case as an unprecedented attack on the Revenue. "The case has taken 25 man-years to investigate." Cranswick was recruited to play his role in the MTIC (missing Trader intra-community) fraud by others. Also known as carousel fraud, it involves importing goods from other EU states which are then sold through contrived business-to-business transactions. Cranswick, of Danby Road, Kiveton, Sheffield, admitted conspiracy to cheat HMRC at a hearing last month. After the sentencing, Exchequer Secretary David Gauke said: "This Government will not tolerate dishonest people stealing public money. "This sentence shows that those who try to commit fraud need to think again - HMRC will find you and the courts will punish you. "The additional £917m we have invested in HMRC will see more cases like this successfully prosecuted, sending a clear and powerful message." The judge said the sentencing exercise was to punish the offending and deter others. "The figures in this case are astonishing, they reveal the blatant nature of the fraud," he said. Between June 2005 and February 2006, I2G supposedly carried out almost 6,000 deals, with a turnover of £2.4 billion. Sentencing Cranswick, the judge said: "You were immediately before this fraud a serving police officer. Almost unbelievably you retired from the police force and became the organiser of this fraudulent operation. "You set up the company, you clearly accepted the direction of others - the organisers who are not before this court." Outside court, HMRC said Cranswick went "from rags to riches" soon after retiring, having been heavily in debt as a police officer. A spokeswoman said: "He made lavish improvements to his home, rented a luxury apartment in the Spanish town of Marbella and paid for private schooling and tennis lessons for his children. "Cranswick claimed that in the first six weeks of trading Ideas 2 Go had turned over more than £527 million. "The company had traded over £47 million before they even got round to opening a bank account for the business." HMRC assistant director for criminal investigation Paul Rooney said: "As a police officer Cranswick knew full well that he was breaking the law, yet, motivated by greed, he chose to overlook it for the opportunity of making what he wrongly assumed would be easy money. "He now has to pay a very high price for his poor judgment and lack of integrity. "This was a sophisticated fraud designed to steal hundreds of millions of pounds of tax, but it started to unravel when our investigations identified sales for more than 50,000 mobile phones, which the manufacturers hadn't even begun producing in their factories." Cranswick nodded as the judge passed sentence, and gestured to members of his family in the public gallery as he was led away. Also sentenced after admitting conspiracy to cheat the Revenue were Thomas Murphy, 27, of Dinnington, who was jailed for four and a half years; Cranswick's brother-in-law, Darren Smyth, 42, from Beech Road, Maltby, and Brian Olive, 56, from Buttermere Close, Doncaster, who were sentenced to three years and four months each; and former housing officer Andrew Marsh, 28, from Sheffield, who was jailed for two years and eight months. Cranswick's 44-year-old sister, Clare Reid, married to Smyth, was handed a nine-month sentence, suspended for 18 months, and ordered to carry out 150 hours of unpaid work after admitting two counts of false accounting. Cranswick styled himself as a singer-songwriter and can be seen on his website strumming a guitar to a song called Hit And Miss with the opening lines: "I'm in trouble, falling down a hole. How I got here, I won't ever know." He was lead singer with an indie band called Not The Police.

Inaki Urdangarin - the husband of King Juan Carlos and Queen Sofia's youngest daughter Infanta Cristina - is suspected of misappropriating cash paid into an NGO.

The former handball player now faces a possible interrogation by investigating judge Jose Castro  and risks causing huge embarrassment for the royals.

It is claimed that his non-profit company, Instituto Noos, was given an enormous 2.3million euros (just under £2million) by the Balearic Islands’ regional government to organise two conferences on tourism and sport in 2005 and 2006. 

The judicial investigation is looking into whether the bills for the events were inflated and if the money ended up in private companies run by Urdangarin, who is Duke of Palma, the capital of Majorca.

Urdangarin, 43, left Instituto Noos in 2006, months after the exorbitant sums paid by the Balearic government were revealed by the Socialist Party.

He said today: 'I cannot comment about on-going judicial proceedings.'

The prosecution claims Urdangarin and his associate Diego Torres created a network of societies with which they diverted public and private funds received by Instituto Noos.

Under suspicion: The former handball star is charged with creating a network of societies into which he diverted private and public funds

Regal scandal: Princess Cristina and Urdangarin (far right) pose with Spain's royal family King Juan Carlos, Queen Sofia, Crown Prince Felipe and wife Princess Letizia and Princess Elena

They are under investigation for document falsification, corruption, fraud and embezzlement, and Torres’s home has been searched.

The Royal Household expressed its 'absolute respect' for the legal decisions and added that it has 'nothing to say at this moment' as this is 'an investigation which must follow its course'.

The Duke and Duchess, who married in 1997, now live in Washington, DC. The couple have four children. 

Urdangarin played in Spain’s national handball team at three Olympic Games, captaining the side for Sydney 2000.