CitiGroup Expand its Plans by 7 Billion$ in Settlements

Citigroup and the Justice Department have agreed to a $7 billion deal that will settle a federal investigation into the mortgage securities the bank sold in the run-up to the financial crisis, Michael Corkery writes in DealBook. The deal, announced on Monday morning, includes a $4 billion cash penalty to the Justice Department ‒ the largest payment of its kind ‒ as well as $2.5 billion in so-called soft dollars earmarked for aiding struggling consumers and $500 million to state attorneys general and the Federal Deposit Insurance Corporation. The bank, which is scheduled to announce second-quarter earnings at 8 a.m., said the settlement would result in a pretax charge of $3.8 billion before taxes in the period.
The deal caps months of contentious talks that began with a $363 million offer by Citigroup followed by a $12 billion demand from the Justice Department, a gap that stemmed from the radically divergent methods used to calculate the cost of the settlement, DealBook’s Ben Protess, Jessica Silver-Greenberg and Michael Corkery write. Citigroup linked its initial offer to the bank’s relatively small share of the market for mortgage securities. But the Justice Department rejected that argument, emphasizing instead what it saw as Citigroup’s level of culpability based on incriminating emails and other evidence it had uncovered.
The Irish drug maker Shire said on Monday that its board was prepared to recommend an improved takeover bid of 53.20 pounds a share, the equivalent of about $53 billion, that it received over the weekend from AbbVie, Chad Bray writes in DealBook. The latest offer is the fifth revised bid by AbbVie, which is based in Chicago.

The deal, if completed, would allow AbbVie to reincorporate in Britain and save millions of dollars in taxes, a process known as an inversion. Shire has its headquarters in Ireland and is listed in London. AbbVie is hoping to reach a deal for Shire before July 18, when it will have to make a firm offer or walk away for up to six months under British takeover rules.

Mario Draghi, the president of the European Central Bank, testifies on economic and monetary development before the European Parliament’s Committee on Economic and Monetary Affairs at 1:30 p.m. in Strasbourg, France. Happy Bastille Day.

The debt settlement industry, already accused of questionable tactics related to mortgages, has found a gold mine of new customers: those with student debt, Rachel Abrams and Jessica Silver-Greenberg write in DealBook. Federal and state regulators are now finding new instances of abuse as these debt settlement companies shift from mortgage and credit card debt to student loans.

On Monday, Illinois is expected to become the first state to bring legal action against debt settlement companies in connection with their student loan practices, contending in two separate lawsuits that Broadsword Student Advantage and First American Tax Defense duped vulnerable borrowers into paying for help that never arrived. The companies often misled customers about fees, according to the suits, and in some instances feigned affiliation with federal relief programs. In some cases, the Illinois attorney general contends, the companies charged customers for debt assistance that they could have received free from the Education Department.

Pretty Little Liars Season 4

Amping up excitement for it's highly anticipated fourth season, ABC Family released a trailer for "Pretty Little Liars" on Friday (May 3).

Featuring Lucy Hale, Ashley Benson, Shay Mitchell and Troian Bellisario , the new clip gives fans an eerie look into what's in store.After getting a unanimous text from "A," the video shows the girls saying, "turth wont set you free im going to bury you with it."

Be sure to tune into the summer premiere on June 11 and check out the trailer in the player below!

Obamas pay $112,214 in federal taxes for 2012

President Barack Obama and first lady Michelle Obama paid $112,214 in federal income taxes on adjusted gross income of $608,611 in 2012—for an effective rate of 18.4 percent. They also contributed $150,034 to 33 charities, or 24.6 percent. And they paid $29,450 in Illinois income tax.

The White House released the first couple's tax returns Friday, before the April 15 deadline to file to the IRS.

What about the Bidens? One interesting nugget from their tax return is that Vice President Joe Biden and his wife, Jill, gave $2,000 in clothes, furniture and exercise equipment to charity. So someone out there could be walking in the vice president's shoes. Literally.

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The Obamas made less money than they did last year ($789,674) but also paid a lower effective federal income tax rate (it was 20.5 percent in 2011.)

Their largest charitable donation, $103,871, went to the Fisher House Foundation, which provides free or low-cost places to stay to veterans and military families getting care at military medical centers.

"The president believes we must reform our tax system which is why he has proposed policies like the Buffett Rule that would ask the wealthiest Americans to pay their fair share while protecting families making under $250,000 from seeing their taxes go up," White House press secretary Jay Carney said in a blog post. "Under the President’s own tax proposals, including limitations on the value of tax preferences for high-income households, he would pay more in taxes while ensuring we cut taxes for the middle class and those trying to get in it."

The Buffett Rule is named for billionaire investor Warren Buffett, who says that he pays a lower effective federal income tax rate than his secretary does.

So what happens if you plug the Obamas' income into the Buffett Rule calculator the president's re-election campaign used to pound Mitt Romney last year? (Yup, it's still live.) It's disappointing. Put in the income, the fact that the Obamas' are married with kids, hit "calculate," and you get: "Tax rates at the salary you entered vary significantly based on the level and nature of investment income, as well as other factors."

The Bidens reported adjusted gross income of $385,072 and paid $87,851 in federal income tax for an effective rate of 22.8 percent. They gave $7,190 to charity. And they paid $13,531 in Delaware income tax and $3,593 in Virginia income tax.

What about those "noncash charitable contributions"? Clothing, boots, kitchenware, glassware, furniture and exercise equipment, bicycles, toys, glasses and pottery. All worth about $2,000.

On Twitter, someone suggested that the Bidens could actually generate more income for their chosen charities:

For those of you who don't speak the language: What if the Bidens auctioned their goods online and gave the proceeds to charity?

Kidnapped 89-Year-Old to Captors

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An 89-year-old woman who spent two days locked in her car trunk thinking she'd never be found has a message for her teen captors.

"You got to be kind to other people if you want somebody to be kind to you," Margaret Smith said.

The 4-foot-11 octangenerian's story began with an act of kindness on March 18.

Smith had stopped at the Chicken Man Convenience Store in Milford, Del., for a Butter Pecan ice cream cone when two teenage girls approached her and asked for a ride across town.

"I decided not to, then I said, 'Well, a good deed,'" Smith said.

After driving around for a while, Smith said the girls snatched her car keys and stuffed her in the trunk of her Buick.

"The way they drove off flying, I didn't think nobody would ever find me," she said. "I just had to pray about and hope that I'd be found."

Smith spent the next two days crammed in the trunk, without food, water and her blood pressure medication. She said the only time the girls opened the trunk was to rob her of the cash she was carrying.

"I was very tired, cold, hungry, scared," Smith said. "I didn't know what to expect."

After spending 48 hours locked in her trunk, Smith's kidnappers inexplicably decided to dump her in a remote cemetery.

"I was crawling through the cemetery on hands and knees," Smith said. "Nothing but a pair of stockings on, no jacket...Finally somebody found me. I don't know who."

Smith was taken to a local hospital, where her family, who had reported her missing, received a call that she was safe.

Delaware State Police found Smith's car days later and arrested and charged five teenagers inside. All are believed to have some involvement in the kidnapping, robbery and theft, ABC News' Philadelphia affiliate WPVI reported.

Four of the teens, ranging in age from 14 to 17, are being charged as adults, while a fifth faces receiving stolen property and conspiracy charges as a minor.

U.S. Diplomat Killed in Afghanistan

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The friends and family of Anne Smedinghoff are mourning the 25-year-old Foreign Service Officer killed in a car bomb blast in southern Afghanistan whom they describe as vivacious and loving.

Smedinghoff was one of five Americans killed in a suicide bomb attack in Qalat, Zabul.

Working as a press officer for the U.S. embassy in Kabul, she was helping Afghan journalists cover an event at a boys school where the local U.S. Provincial Reconstruction Team was to donate math and science books

The other Americans killed in the attack were three military service members and a civilian working for the Defense Department. Four State Department officials, including one described as critically injured, were among the 10 injured in the attack.

"The world lost a truly beautiful soul," Tom and Mary Beth Smedinghoff said in a statement. "Anne absolutely loved the work she was doing" as a press officer at the U.S. embassy in Kabul, they said.

Having served in the Foreign Service for only three years, Smedinghoff volunteered to serve inAfghanistan and arrived last July.

"We are consoled knowing that she was doing what she loved, and that she was serving her country by helping to make a positive difference in the world," her parents said. "She was such a wonderful woman -- strong, intelligent, independent, and loving. Annie, you left us too soon; we love you and we're going to miss you so much."

A senior State Department official who also knew Smedinghoff described her as being "really special," "sweet," and "very bright."

Traveling in Istanbul, Secretary of State John Kerry described Smedinghoff's death as the "stealing of a young life."

"There are no words for anybody to describe the extraordinary harsh contradiction of a young 25-year-old woman with all of the future ahead of her, believing in the possibilities of diplomacy, of changing people's lives, of making a difference, having an impact, who was taking knowledge in books to deliver them to a school. And someone somehow persuaded that taking her -- his life was a wiser course and somehow constructive, drives into their vehicle and we lose five lives," Kerry said.

Kerry had met Smedinghoff two weeks ago during his recent trip to Afghanistan, where she had been assigned to coordinate his trip.

"I remember her as vivacious, smart, capable, often chosen by the ambassador for her capabilities," Kerry said. He said of his call to Smedinghoff's parents on Saturday that "there is no harder conversation to have in the world."

Afghan security officials told ABC News that the State Department convoy had just left its headquarters in Qalat and joined the convoy of the local provincial governor who was also headed to the school book giveaway.

That's when two suicide attackers attacked the convoy. The security officials said there was an initial car bomb detonated by a remote device. Then a suicide bomber wearing a suicide vest appeared and caused more casualties.

Afghan sources say the school event had been announced a day in advance, which possibly allowed attackers enough time to plan the attack.

Another American civilian was killed Saturday in what was described to ABC News as a "massive firefight" in eastern Afghanistan that led U.S. forces to call in an airstrike that Afghan officials say killed 11 Afghan civilians, 10 of them children.

In a statement, ISAF said they were aware of several civilian injuries resulting from "fire support" provided in the incident but no civilian deaths. They said they were assessing the incident.

On Saturday, Afghan and American forces had launched a joint operation in three villages located in Kunar Province to root out Taliban fighters.

The American civilian, who had been advising Afghan forces, was killed as the U.S. and Afghan forces took heavy fire from multiple homes.

Afghan officials told ABC News that the unit called in an airstrike and that some of the weapons they dropped went errant. Ten children were killed when the roof of their home collapsed as a result, the officials.

An Afghan police official said eight Taliban fighters were also killed during the operation.