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More funds recovered for victims of Bernie Madoff

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(NEW YORK) -- The trustee for the liquidation of Bernie Madoff’s defunct and fraudulent investment firm announced on Friday a new distribution of recovered funds to swindled customers.

This is the 14th distribution to victims of Madoff’s Ponzi scheme and brings the total amount restored to more than $14 billion.

The trustee has been pursuing stolen customer funds since Madoff pleaded guilty in 2009 and signaled there would be additional recoveries in 2023.

"We are proud to continue our quest to recover additional funds and return them to defrauded claimants," the trustee, Irving Picard, said in a statement.

When combined with the prior distributions, the fourteenth distribution will equal about 70% of each customer’s allowed claim amount, unless that claim has been fully satisfied. The aggregate amount distributed to eligible customers will total more than $14.36 billion. This recovery far exceeds any prior restitution effort related to Ponzi schemes both in terms of dollars and percentage of stolen funds recovered.

Madoff died of natural causes in April 2021 while being housed at the Federal Medical Center in Butner, North Carolina. He was 82.

Copyright © 2022, ABC Audio. All rights reserved.


Why the jobs boom could worsen inflation and help trigger a recession

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(NEW YORK) -- The economy has set off emergency sirens this year over growing recession fears, sky-high inflation and a battered stock market. But one area has allayed worries: jobs.

Hiring last month exceeded expectations and defied warnings of a downturn. Moreover, in November, wages grew a blistering 5.1% compared to a year earlier, offering welcome relief for workers strained by price hikes.

But the hiring boom could help send the economy into a prolonged downturn, turning the good jobs news into a grim omen, economists told ABC News.

"It's confusing for people and rightfully so," Betsey Stevenson, a professor of public policy and economics at the University of Michigan, told ABC News. "How can a lot of jobs be bad for the economy?"

A tight job market fuels rising wages, which often push companies to raise prices to make up for the added costs. In turn, inflation worsens and recession risks rise, they added.

In addition, rising wages have offered less to workers than they appear to have at first glance, since income gains have trailed the pace of inflation, effectively slapping workers with a pay cut, the economists said.

Here's what you need to know about how the hiring spree could deepen inflation and help trigger a recession, while leaving some workers worse off:

An inflation crisis puts pressure on the jobs market

Robust job growth could deepen inflation, but it isn't the primary cause of the current bout of high prices, economists said. Like so many economic problems, inflation comes down to an imbalance between supply and demand.

When billions of people across the globe faced lockdowns, they shifted consumption to goods like Peloton bikes and couches, in some cases bolstered by wallets fattened with government stimulus. Meanwhile, a pandemic-era supply chain bottleneck dramatically slowed the delivery of the goods people wanted. In turn, demand far outpaced supply, sending prices skyward.

This year, price hikes reached a 40-year high, triggering an aggressive series of interest rate hikes from the Federal Reserve meant to slash demand, slow the economy and curb costs. Price increases for some goods have cooled but remain highly elevated.

"I don't think anybody out there would tell you the main reason we have inflation today is businesses trying to chase too few workers," said Stevenson, of the University of Michigan.

But, she said, that could present a problem soon.

Fear of a wage-price spiral

Alongside the dearth of goods, a shortage of workers emerged. A speedy recovery from the pandemic-induced recession caused a hiring blitz, but employers struggled to find workers, some of whom feared COVID exposure or sought early retirement.

The lack of workers has driven wages upward.

"If there are a lot of jobs and people are taking those jobs and the economy is growing, that's not bad. What's bad is if employers want to hire people and can't find people," Stevenson said. "We could start to see a lot of inflation generated by businesses trying to chase too few workers."

To be sure, some economists argue that a dearth of people seeking work owes to a lack of quality jobs that could lure potential workers off the sidelines, while others point out that record profits at some corporations suggest price increases owe in part to business opportunism, alongside supply-demand imbalance or wage pressure.

Still, it's no coincidence that the breakneck pace of wage growth last month coincided with a drop in the number of people working or seeking work. If workers are in ample supply, it gives the labor market some slack and limits wage growth. However, workforce participation came in at 62.1% last month, markedly lower than the pre-pandemic level of 63.4%.

"The underlying issue is that the labor force has shrunk," Beth Ann Bovino, chief U.S. economist at S&P Global, told ABC News. "I'm fearful that the wage gains put upward pressure on prices elsewhere."

When facing high inflation, policymakers ultimately fear what's referred to as a price-wage spiral, in which a rise in prices prompts workers to demand raises that help them afford goods, which in turn pushes up prices, leading to a self-perpetuating cycle of runaway inflation.

"Inflation is like a cancer where if you don't derail it, it can become a fatal problem," Diane Swonk, the chief economist at KPMG, told ABC News.

Interest rate hikes could plunge the economy into a recession

Seeing a relatively small workforce and strong wage growth, the Federal Reserve will likely continue its series of rate hikes to ward off a worst-case scenario of spiraling price increases, economists said.

While preventing a prolonged bout of inflation last seen in the 1980s, the continued interest rate hikes will put further brakes on the economy and increase the likelihood of a recession, they added.

"When the Fed comes in with higher rates, it takes the punch bowl away and the party is over," said Bovino, of S&P Global. "If the Fed has to ramp up rates even higher because of wage pressures feeding into other areas, the Fed takes the punch bowl and smashes it to the ground."

So far, the hiring boom has withstood the Fed's effort to slow the economy. But the job market has shown signs of wobbling, such as a string of layoffs in the tech sector that has struck stalwarts like Amazon and Facebook-parent Meta.

As the economy slows, wage growth will cool and more workers will lose their jobs, but the economy will avert a more debilitating downturn, said Swonk, of KPMG. Eventually, inflation will fall to a rate below that of wage growth, no longer eating away at workers' income, she added.

"Unemployment will rise a bit – that's a hard thing, no question about it," Swonk said. "But it is better to eradicate the risk that this inflation metastasizes and we have to take a much more severe scarring, a deep and disruptive recession."

Copyright © 2022, ABC Audio. All rights reserved.


'New York Times' reporters and other staff stage 24-hour strike

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(NEW YORK) -- More than 1,000 journalists and other workers at The New York Times launched a 24-hour strike on Thursday, a protest over ongoing contract negotiations that marks the first such strike at the company in more than four decades.

"It's never an easy decision to refuse to do work you love, but our members are willing to do what it takes to win a better newsroom for all," the NewsGuild of New York, the union representing the workers, said on Thursday.

Workers and management have reached an impasse over the scale of pay increases, the balance between remote and in-office work and other issues, according to a letter signed by more than 1,000 employees.

A collective bargaining agreement between the workers and The Times expired last March, giving way to 20 months of negotiations, the letter said. Those negotiations spanned more than 120 hours across 40 bargaining sessions but the two sides still disagree on a host of concerns.

"The Times company is profitable," the letter said. "It is time the unionized workers who made so much of this possible be properly compensated for their efforts."

New York Times spokesperson Danielle Rhoades Ha expressed disappointment over the work stoppage, saying the two sides have taken steps toward an agreement.

"It is disappointing that they are taking such an extreme action when we are not at an impasse," Rhoades Ha told ABC News.

"Though we've made progress and offered several new proposals this week to address issues identified as priorities by the Guild, we still have much more work to do when we return to the bargaining table," Rhoades Ha added.

It was unclear whether the work stoppage would disrupt operations at the news outlet. The Times could publish some previously written work and workers outside of the union would be called upon to make up for the absence of colleagues, Dana Goldstein, a domestic correspondent at the national desk who participated in the work stoppage, told ABC News.

"This is a show of strength to show that we are ready to take these steps and do believe our incredible work over what's been some of the hardest times of our lives during the pandemic should be rewarded," she said.

Negotiations have stalled primarily over the scale of annual pay increases, Goldstein said.

The company has offered 2.75% in average annual guaranteed base-pay raises, according to the letter from Times employees.

That offer falls short of what workers need as they weather sky-high inflation and rising housing costs in New York City, where many employees live, said Goldstein, who has worked at The Times for six years.

"We're not asking for raises to keep up with inflation," she said. "We're asking for more than what's been offered."

Despite the impasse on pay increases, the company has improved its offer on some benefits, Goldstein said.

The company, which had sought to replace a pension plan with a 401(k), is now offering employees a choice between the two, she said. The company also agreed to improve fertility benefits, she added.

Prominent supporters of Times workers, including actor Mark Ruffalo and Rep. Jamaal Bowman, D-NY, called on people to forego visiting The Times website and using Times products in an act of solidarity with the workers.

“Support the New York Times workers in solidarity and steer clear of the NY Times during their strike,” Ruffalo said. “Even Wordle.”

Copyright © 2022, ABC Audio. All rights reserved.


How millions of missing workers are making do without a job

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(NEW YORK) -- Recession fears have mounted in recent weeks, as inflation continues to strain household budgets and the Federal Reserve appears set to raise interest rates and further slow the economy.

As if blissfully unaware, however, the job market has thrived. Hiring last month exceeded expectations and defied warnings of a downturn.

But the good jobs news could ultimately imperil the economy. Wages last month grew a blistering 5.1% compared to a year earlier, offering welcome relief for workers but also sobering news for Fed officials fearful of runaway inflation driven by income gains.

In turn, a lesser known data point has drawn outsized attention: the share of the adult population not working or actively looking for work. If workers are in ample supply, it gives the labor market some slack and limits wage growth. However, workforce participation came in at 62.1% last month, markedly lower than the pre-pandemic level of 63.4%.

The scant supply of workers keeps the labor market taut and helps fuel rising wages, which risk exacerbating inflation and pushing the economy into a recession, economists told ABC News.

Americans "should be worried about it," Stephanie Roth, a senior market economist at J.P. Morgan Private Bank, told ABC News. The firm predicts a recession as the most likely outcome for the economy, she said, adding that "a continued tight labor market and high wage inflation would be a key reason."

The alarm raises a key question at the heart of the economy: How can millions of missing workers stay on the sidelines while affording to pay their bills?

Here's how unemployed people have kept up their lives and why it matters:

Retirement rates increased

The top explanation for why so many people have stayed out of the workforce centers on people who retired during the pandemic, economists said.

Over the past three months, there were 3.6 million more Americans who had left the labor force and said they didn't want a job, compared with the same period in 2019, Aaron Sojourner, an economist at the Upjohn Institute, told ABC News. Among those 3.6 million people, individuals aged 55 and above made up about 90%, he added.

A stock market tear during the pandemic ballooned the assets of some older Americans, allowing them to subsist without income. Meanwhile, the heightened risk of severe illness faced by older Americans amid the COVID outbreak left them fearful of exposure at the workplace, Sojourner said.

"They had their finances in a position that enabled them to make the choice to stay out," he said.

A stock market downturn this year has buffeted that financial stronghold for retirees, however, said Roth, of J.P. Morgan. Still, the reluctance of many older Americans to reenter the workforce owes to the endurance of their pandemic-era savings and the difficulty in reverting back to a bygone lifestyle.

"Now they've settled into their lives in retirement and they're less inclined to come back into the labor force," Roth said.

Savings strengthened

Another financial lifeline for unemployed Americans is the stockpile of savings that many built during the pandemic, economists said.

The COVID era strengthened household savings as government stimulus and high-flying asset prices combined with a lockdown lifestyle that did away with expenses like travel and eating out.

U.S. households amassed about $2.3 trillion in savings in 2020 and 2021, a Federal Reserve study showed last month. Moreover, households in the lower half of income distribution were still holding a combined $350 billion in excess savings as of the middle of this year, the study found.

Those savings afforded workers the flexibility to make major changes like quitting their jobs and cutting expenses to afford the lost income, Jesse Wheeler, an economic analyst with the research firm Morning Consult, told ABC News.

"The lifestyle choices that people made during the pandemic to move to a different place, work a little less and enjoy time with family – those sorts of choices are sticky," Wheeler said.

Recently, however, savings for many have dwindled, Wheeler said.

Last month, the personal savings rate fell to 2.3%, the lowest rate in nearly two decades, according to data from the Commerce Department.

With persistent inflation hovering near a 40-year high, shoppers have drawn on savings to preserve a steady level of consumption while weathering elevated prices, he added.

"Clearly, it's not going to be sustainable over the long term," Wheeler said. "People eventually need to pull back on spending or reenter the labor force to increase their earnings."

Informal work and self-employment

Data reporting a shrunken workforce likely overlooks some Americans who've continued to work, especially at self-run businesses or informal jobs, economists said.

During the pandemic, new business applications soared and they have remained above pre-pandemic levels, Census Bureau data showed. The Bureau reported nearly 433,000 new business applications in October, a marked increase from 313,000 in December 2019. In July 2020, new business applications reached as high as 552,000.

The government survey that calculates monthly U.S. hiring may leave out some self-employed people, said Roth.

Some people working gig jobs describe themselves as employed while others don't, said Wheeler, of Morning Consult.

Typically, people who work formal gig jobs in delivery or ridehail service describe themselves as employed in response to queries. However, people who rely on jobs like babysitting, house sitting or dog walking often do not call themselves employed, Wheeler said.

The increase in gig work across the economy likely accounts for some of those missing from the workforce, said Sojourner.

"There are slightly more people who see informal work as an option for how to sell some of their time and skills," he said.

Relying on a spouse or other family for support

The savings boom and rise of remote work during the pandemic led some married households to drop from two incomes to one, and pushed some workers to move in with family members, allowing previously employed people to subsist on support from loved ones, economists said.

While this shift likely accounts for a small portion of those outside of the labor force and data remains limited, the phenomenon highlights a lifestyle change enjoyed by some who have prioritized childcare or other activities above work, they said.

"People have changed up their lifestyles, maybe moved to the suburbs or consolidated households, maybe switched from one income to two," Wheeler said. "They've realized that they like that lifestyle better and don't want to go back."

For instance, the workforce participation rate for women aged 25-34 fell nearly 5 percentage points after the outset of the pandemic, according to data from the Bureau of Labor Statistics. While employment in that group has rebounded, it remains below pre-pandemic levels.

The choice to give up work for childcare made up a key obstacle for women during the pandemic. While the problem remains, it has largely eased, Roth said.

"I wouldn't say it's the most important driver of wage inflation today but it's an important piece of the puzzle," Roth said.

Copyright © 2022, ABC Audio. All rights reserved.


Last-minute shipping dates for USPS, FedEx and UPS, plus Free Shipping Day details

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(NEW YORK) -- Have gifts to ship that you want to arrive by Christmas? Then taking a trip to the post office might be in your future.

Each year, we spend time sweating over getting holiday gifts out in time and worrying about shipping delays. If you are using FedEx this year, Thursday is the last day to ship if you want the cheapest option for ground economy. Then you will have until Dec. 14 to use standard ground shipping.

Major shipping services have released their recommended ship-by dates in order for packages to arrive on or before the Christmas holiday. The overall advice: The earlier you send, the better, and don't delay any longer.

Scroll down for deadlines from USPS, UPS and FedEx.

USPS

Dec. 17: This is the last day for retail ground shipping.

Dec. 17: This is the last day for first-class mail service (including greeting cards) and packages up to 15.99 ounces.

Dec. 19: This is the last day for Priority Mail service.

Dec. 23: This is the last day for Priority Mail Express service.

More information on USPS holiday shipping deadlines can be found here.

UPS

Dec. 15: This is the last day for UPS Ground service.

Dec. 20: This the last day for UPS 3 Day Select service.

Dec. 21: This is the last day for UPS 2nd Day Air service.

Dec. 22: This is the last day for UPS Next Day Air service.

More information on UPS holiday shipping deadlines can be found here.

FedEx

The company advises planning ahead to ensure gifts arrive on time. You can create your own shipping label at home and find a nearby location for easy drop-off service.

Dec. 14: This is the last day for FedEx Ground service.

Dec. 20: This is the last day for FedEx Express Saver and 3Day Freight services.

Dec. 21: This is the last day for FedEx 2Day A.M. and 2Day Freight services.

Dec. 22: This is the last day for FedEx 1Day Freight, Extra Hours, Standard Overnight, Priority Overnight and First Overnight services.

Dec. 23: This is the last day for FedEx SameDay, SameDay City Priority and SameDay City Direct services.

More information on FedEx holiday shipping deadlines can be found here.

Copyright © 2022, ABC Audio. All rights reserved.


End of an era as final Boeing 747 rolls off assembly line

David Ryder/Bloomberg via Getty Images

(EVERETT, Wash.) -- After 54 years of production, the most recognizable and iconic commercial aircraft is fading into the sunset as Boeing prepares to deliver its final 747 aircraft.

Late Tuesday night, the 1,574th 747 rolled out of the Everett, Washington, hanger where the 747 was first produced in 1967.

In 1970, Pan Am became the launch customer of the double-decker jumbo jet, forever changing the way people moved around the world.

"For more than half a century, tens of thousands of dedicated Boeing employees have designed and built this magnificent airplane that has truly changed the world. We are proud that this plane will continue to fly across the globe for years to come," Kim Smith, Boeing vice president and general manager, 747 and 767 programs, said in a press release.

At 250 feet-long, donning a massive hump at its front, the 747 can carry 400-500 passengers and became an unmissable behemoth crisscrossing the globe for more than 50 years. The plane quickly became a sign of luxury travel, with some airlines adding bars, lounges and even pianos on the upper deck.

The last 747 won’t carry passengers but will be used as a freight aircraft for Atlas Air.

U.S. passenger airlines stopped flying the 747 in 2017 as more efficient, twin-engine, wide-body aircraft became more practical.

The last passenger 747 went to Korean Air in 2017. German airline Lufthansa currently operates the most 747 passenger planes.

Air Force One is the most famous 747 and first flew during the George H.W. Bush presidency. Two, already-manufactured 747s are currently undergoing retrofitting and will replace the current aging Air Force One aircraft in about four years.

Copyright © 2022, ABC Audio. All rights reserved.


Texas Gov. Greg Abbott bans TikTok on state devices

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(AUSTIN) -- Texas Gov. Greg Abbott directed state agencies on Wednesday to ban the use of social media platform TikTok on government-issued devices over concerns about how the China-owned app handles data on American infrastructure and other sensitive information.

"TikTok harvests vast amounts of data from its users' devices -- including when, where and how they conduct internet activity -- and offers this trove of potentially sensitive information to the Chinese government," Abbott said in a letter to state officials on Wednesday.

TikTok has faced growing scrutiny from state and federal officials over fears that American data could fall into the possession of the Chinese government.

Indiana Attorney General Todd Rokita sued TikTok on Wednesday for allegedly misleading users about the Chinese government's capacity to access their data and showing mature content to minors. It marks the first state lawsuit against the app.

TikTok provided ABC News with a statement after Indiana sued the company.

"While we don't comment on pending litigation, the safety, privacy and security of our community is our top priority. We build youth well-being into our policies, limit features by age, empower parents with tools and resources, and continue to invest in new ways to enjoy content based on age-appropriateness or family comfort. We are also confident that we're on a path in our negotiations with the U.S. Government to fully satisfy all reasonable U.S. national security concerns, and we have already made significant strides toward implementing those solutions," the statement read.

On Tuesday, Maryland Gov. Larry Hogan announced a similar prohibition on TikTok, as well as Chinese technology makers like Huawei and ZTE, from use on state business.

In a statement a response to Hogan's ban, TikTok said in a statement to ABC News: "We believe the concerns driving these decisions are largely fueled by misinformation about our company. We are happy to continue having constructive meetings with state policymakers to discuss our privacy and security practices. We are disappointed that many state agencies, offices, and universities will no longer be able to use TikTok to build communities and connect with constituents."

Last month, a commissioner at the Federal Communications Commission called on the U.S. government to ban the social media platform.

The Biden administration and TikTok wrote up a preliminary agreement to address national security concerns posed by the app but obstacles remain in the negotiations, The New York Times reported in September.

TikTok says that it stores the data of U.S. users outside of China, and has never removed U.S. posts from the platform at the request of the Chinese government.

Recent news stories have called into question the security of user data.

Buzzfeed reported in June that TikTok engineers based in China gained access to intimate information on U.S. users, such as phone numbers. Forbes reported in October that ByteDance, TikTok's parent company, intended to use the app to access information on some users.

The Trump administration tried to ban TikTok in 2020, eventually calling on ByteDance to sell the app to a U.S. company. However, the sale never took place.

ABC News' Beatrice Peterson contributed to this report.

Copyright © 2022, ABC Audio. All rights reserved.


Sunny Balwani, Elizabeth Holmes' former partner, sentenced in Theranos fraud case

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(NEW YORK) -- Ramesh "Sunny" Balwani, the former romantic partner of Elizabeth Holmes and president of disgraced blood testing company Theranos, was sentenced Wednesday to 155 months, or nearly 13 years, in prison.

The sentencing in federal court comes less than three weeks after Holmes, the founder of Theranos, received 135 months, or 11 1/4 years, in prison for defrauding investors.

Balwani, 57, was convicted in July on 12 counts of fraud and conspiracy after persuading investors and patients to trust the company's faulty blood testing devices. In addition to 155 months in prison, Balwani was ordered to serve three years of probation after the sentence. Restitution will be decided at a later date. He has been ordered to report to prison on March 15, 2023.

Balwani faced a sentence of 20 years for each of the 12 counts, but legal experts expect the sentences to be served at the same time, giving him a maximum sentence of 20 years.

Prosecutors filed a legal memorandum last week arguing that the severity of the fraud and the need to "promote respect for the law" warrant a prison term of 15 years for Balwani.

Balwani's lawyers, meanwhile, said their client should not receive any jail time, arguing instead that probation would prove sufficient. In a court filing, the lawyers noted Balwani's financial losses on Theranos and contrasted Balwani's low public profile with Holmes, who drew "fame and media attention."

Last month, Balwani received a three-week delay in sentencing to give probation officers additional time to offer a recommended punishment. Balwani had asked for a sentencing date of Jan. 23, 2023, due to an undisclosed health problem and to make sure family members could attend the hearing.

Balwani, who also served as chief operating officer at Theranos, was convicted in July after a 13-week trial that detailed his trajectory from a wealthy software engineer who formed a romantic relationship with Holmes to a second-in-command figure at Theranos who invested millions in the startup and oversaw day-to-day operations.

Theranos sought to revolutionize the medical testing industry with a product that could assess an array of potential health issues with just a few drops of blood. The company, once valued at $9 billion, became an emblem of Silicon Valley malfeasance after it came to light that Balwani and Holmes misled investors even as the product failed to work.

During her trial, Holmes alleged that Balwani psychologically and physically abused her over the course of their romantic relationship -- accusations that he forcefully denied.

Lawyers for Balwani depicted Theranos as a venture launched and shaped by Holmes. "Sunny Balwani did not start Theranos, he did not control Theranos, he did not have final decision-making authority at Theranos," said Balwani's attorney, Stephen Cazares.

Ultimately, however, a jury found him guilty of misleading investors and patients as the company raised more than a billion dollars and formed partnerships with drugstore giants Walgreens and Safeway.

Federal prosecutors indicted Balwani and Holmes in 2018, the same year Holmes agreed to forfeit control of Theranos. Their trials were severed in 2021.

The sentence on Wednesday was handed down by Judge Edward J. Davila at a federal courthouse in San Jose, California. Holmes received her sentence from Davila at the same courthouse on Nov. 18.

In addition to 135 months in prison, Holmes was ordered to serve three years of supervised release after the sentence. She has been ordered to report to prison on April 27, 2023.

Copyright © 2022, ABC Audio. All rights reserved.


AI photography is taking over social media. Why are some concerned about privacy?

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(NEW YORK) -- The latest social media trend to be sweeping people's feeds is sharing virtual avatars generated through the Lensa AI app.

Lensa, which has been around since 2018, lets users upload 10 to 20 photos of their selfies or portraits, and then it creates dozens, even hundreds, of digital images called "Magic Avatars."

While the pictures could be considered pieces of digital art, those who are worried about personal online privacy have begun raising concerns about data collection.

Cybersecurity expert Andrew Couts is a senior editor of security at Wired and oversees privacy policy, national security and surveillance coverage. He told ABC News' Good Morning America that it's almost "impossible" to know what happens to a user's photos after they are uploaded onto the app.

"It's impossible to know, without a full audit of the company's back-end systems, to know how safe or unsafe your pictures may be," Couts said. "The company does claim to 'delete' face data after 24 hours and they seem to have good policies in place for their privacy and security practices."

According to Lensa's privacy policy, the uploaded photos are automatically deleted after the AI avatars are generated, and the face data on other parts of the app is automatically deleted within 24 hours after being processed by Lensa.

Prisma Labs, Inc., the developer of Lensa AI, told ABC News in a statement that images users upload are used "solely for the purpose of creating their very own avatars."

"Users’ images are being leveraged solely for the purpose of creating their very own avatars. The system creates a personalized version of the model for every single user and models never intersect with each other. Both users' photos and their models are deleted within 24 hrs after the process of creating avatars is complete," the company said in a statement. "In very simple terms, there is no[t] a 'one-size-fits-all collective neural network' trained to reproduce any face, based on aggregated learnings."

"We are updating our Terms & Conditions to make these more clear to everyone. The much-discussed permission to use the content for development and improving Prisma’s work and its products refers to the users’ consent for us to train the copy of the model on the 10-20 pictures each particular user has uploaded," the statement continued. "Without this clause, we would have no right to perform this training for each subsequent generation. We are fully GDPR and CCAP compliant. We store the bare minimum of data to enable our services. To reiterate, the user's photos are deleted from our servers as soon as the avatars are generated. The servers are located in the U.S."

Couts added that he isn't too worried about the photos because most of us already have our faces on social media. He said his main concern is data collection that can be potentially lifted from users' phones.

"The main thing I would be concerned about is the behavioral analytics that they're collecting," Couts said. "If I were going to use the app, I would make sure to turn on as restrictive privacy settings as possible."

He said his advice, no matter what apps are downloaded, is to tighten up personal security through the phone's settings.

"You can change your privacy settings on your phone to make sure that the app isn't collecting as much data as it seems to be able to," he said. "And you can make sure that you're not sharing images that contain anything more private than just your face."

Copyright © 2022, ABC Audio. All rights reserved.


Sunny Balwani, Elizabeth Holmes' former partner, to be sentenced in Theranos fraud case

David Paul Morris/Bloomberg via Getty Images

(SAN JOSE, Calif.) -- Ramesh "Sunny" Balwani, the former romantic partner of Elizabeth Holmes and president of disgraced blood testing company Theranos, is set to be sentenced on Wednesday.

Balwani, 57, was convicted in July on 12 counts of fraud and conspiracy after persuading investors and patients to trust the company's faulty blood testing devices.

He faces a sentence of 20 years for each of the 12 counts, but legal experts expect the sentences to be served at the same time, giving him a maximum sentence of 20 years.

The sentencing in federal court comes less than three weeks after Holmes, the founder of Theranos, received 135 months, or 11 1/4 years, in prison for defrauding investors.

Prosecutors filed a legal memorandum last week arguing that the severity of the fraud and the need to "promote respect for the law" warrant a prison term of 15 years for Balwani.

Balwani's lawyers, meanwhile, said their client should not receive any jail time, arguing instead that probation would prove sufficient. In a court filing, the lawyers noted Balwani's financial losses on Theranos and contrasted Balwani's low public profile with Holmes, who drew "fame and media attention."

Last month, Balwani received a three-week delay in sentencing to give probation officers additional time to offer a recommended punishment. Balwani had asked for a sentencing date of Jan. 23, 2023, due to an undisclosed health problem and to make sure family members could attend the hearing.

Balwani, who also served as chief operating officer at Theranos, was convicted in July after a 13-week trial that detailed his trajectory from a wealthy software engineer who formed a romantic relationship with Holmes to a second-in-command figure at Theranos who invested millions in the startup and oversaw day-to-day operations.

Theranos sought to revolutionize the medical testing industry with a product that could assess an array of potential health issues with just a few drops of blood. The company, once valued at $9 billion, became an emblem of Silicon Valley malfeasance after it came to light that Balwani and Holmes misled investors even as the product failed to work.

During her trial, Holmes alleged that Balwani psychologically and physically abused her over the course of their romantic relationship -- accusations that he forcefully denied.

Lawyers for Balwani depicted Theranos as a venture launched and shaped by Holmes.

"Sunny Balwani did not start Theranos, he did not control Theranos, he did not have final decision-making authority at Theranos," said Balwani's attorney, Stephen Cazares.

Ultimately, however, a jury found him guilty of misleading investors and patients as the company raised more than a billion dollars and formed partnerships with drugstore giants Walgreens and Safeway.

Federal prosecutors indicted Balwani and Holmes in 2018, the same year Holmes agreed to forfeit control of Theranos. Their trials were severed in 2021.

The sentence on Wednesday will be handed down by Judge Edward J. Davila at a federal courthouse in San Jose, California. Holmes received her sentence from Davila at the same courthouse on Nov. 18.

In addition to 135 months in prison, Holmes was ordered to serve three years of supervised release after the sentence. She has been ordered to report to prison April 27.

Copyright © 2022, ABC Audio. All rights reserved.


Santa Shortage: A Head Elf weighs in on holiday headache

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(NEW YORK) -- As the night before Christmas inches nearer, Santa Claus is being asked to make more and more appearances. But Santa Claus is getting harder to find.

Mitch Allen, the founder and "Head Elf" of event planning company Hire Santa, spoke with ABC News' "Start Here" podcast about the difficulty his company is having at a crucial time of year: a nationwide Santa shortage.

"People are wanting Santa more than ever before," he said.

But the demand is outpacing supply.

Hire Santa coordinates booking for Santa Claus impersonators across the country, as well as Mrs. Claus impersonators and Christmas elves. And Santa Claus doesn't just show up in malls; he visits homes, company parties and parades.

Although COVID-19 and its subvariants are continuing to spread across the country, and predicted to rise in the winter months, "people are really back to the tradition of sitting on Santa's knee," Allen said.

Bookings are back to pre-pandemic levels, but there are not enough Santas in the workforce.

"There's just absolutely huge demand coming out of COVID and there are just not enough Santa Claus entertainers," said Allen.

"For every Santa that reaches out to us [for work]," he said, "there are 20 people reaching out to us for Santa events."

Allen told ABC News that demand is up 30% from last year, and more than 120% from pre-pandemic levels. He added that there are more than 2,200 open positions across the industry, which includes Mrs. Clauses and elves.

One factor he noted in his interview with ABC News is that the industry, which already skews older, is aging-out. Over the past few years he estimates the company has lost 10% of its workforce, as Santas have decided to "hang up the red coat," he said.

A major factor is the COVID-19 pandemic, which disproportionately affects elderly people.

During a normal holiday season, the hardest thing about being Santa, Allen said, is some of the questions that are asked.

"You have sick children or children that are going through family issues and even just financial issues," he said. "The children really see those things and pour into Santa as somebody as a trusted figure."

The best part, he said, is spreading the Christmas cheer.

"It's this love that gets pushed back," he said, "reflected back onto them from the children who have this joy and faith of Christmas."

"And it's really just an intoxicating experience to have a Santa as somebody sits on your knee and tells you their Christmas hopes and dreams," Allen said.

Copyright © 2022, ABC Audio. All rights reserved.


Online scammers don't take a holiday, and neither should you

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(NEW YORK) -- 'Tis the season for online scammers to steal your personal information. This year, scams are at an all-time high as more consumers turn to e-commerce for their holiday shopping. According to the Better Business Bureau, online scams are 55% more prevalent than scam calls or texts, and experts say the fraudsters are more sophisticated than ever.

“I think in years past you had a person sitting in their parents' basement, maybe with a hoodie. Things have changed dramatically. It is an organized crime,” Tami Hudson, executive vice president and cybersecurity client officer at Wells Fargo, told ABC News.

Social media is considered a gold mine for scammers, so consumers need to be especially wary of targeted ads on their social media feeds, in emails or text messages that contain suspicious links.

“Go to the website of that retailer, that bank, that company that you want to do business with,” Hudson said. “Pick up the phone and call the number on that website. Ensure that it is a legitimate site.”

Hudson says fraudsters will often create a sense of urgency, saying there’s a problem with your purchase and asking you to wire them money or use a link to a payment site.

“Keep in mind that no financial institution or retailer will reach out to you and ask for your username or password. They're not going to ask you to transfer data or transfer money,” Hudson said.

Also, never re-text your authorization code, which banks and retailers often send to your mobile device when you are logging into your account in order to confirm your identity.

If you are receiving unsolicited authorization codes via text or email, experts say chances are scammers already have your username and password for that particular account and are now phishing for an authorization code to gain access to the website. They recommend immediately changing the password for that account by typing the website address directly into your web browser’s address bar.

These “bad actors” are also taking advantage of people’s generosity during the holidays by creating fake social media profiles for charities. If a charity or small business looks suspicious, do an internet search to see if victims have posted about being scammed.

Online shoppers also need to check website addresses for misspellings and poor grammar and, when possible, should always pay with a credit card, instead of debit or prepaid cards, for better fraud protection.

An added layer of protection when checking out outline is to choose 'Checkout as a Guest' instead of 'Create an Account' whenever possible. When you create an account, your personal information, including your credit card information, is stored on that retailer's servers. If that retailer were to get hacked, a shopper's personal information could be compromised.

It's also important that consumers trust their gut. During a recent online search I conducted for an NHL licensed jersey, the site, for a major retailer, listed the item as out-of-stock. But it appeared to be available -- and at a big discount -- at an online small business that was unfamiliar to me. Immediately suspicious of the offer, I called the contact number on the website. No one answered. But less than a minute later I received a text from the “retailer” telling me they were very busy and could not pick up the phone, but that I could text them my information and they would return my call as soon as they were available.

You can bet I deleted that text faster than you can say “eggnog.” As the old adage goes, if a deal seems too good to be true, it probably is. Stay vigilant and safe shopping!

Copyright © 2022, ABC Audio. All rights reserved.


Why a cap on Russian oil could send gas prices rising

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(WASHINGTON) -- Prices at the pump have plummeted over the past month but a dramatic move from the U.S. and allies meant to slash Russian oil revenue and cripple its war effort could send gas prices rising again, some energy analysts told ABC News.

On Monday, the European Union slapped a ban on all seaborne imports of Russian oil. On top of that, a group of Western nations imposed a price cap on Russian oil that will prohibit the country from selling crude to third party countries unless the price falls well below market rates.

The Western scheme aims to choke off the primary source of funds behind the Russian war in Ukraine but the move risks disrupting the global oil supply and spiking gas prices.

The newly announced measures contributed to a jump in global oil prices in early trading on Monday but prices retreated later in the day.

While the exact effect of the price cap remains unclear, some analysts expect the move to send gas prices higher in the coming months as the global market strains under lost Russian oil supply. However, Russia may circumvent the price cap and continue selling oil at its current rate, mitigating any effect on gas prices, other analysts said.

Here's what you need to know about the price cap on Russian oil and how it will affect U.S. gas prices:

What is the price cap on Russian oil?

The price cap on Russian oil is a policy implemented by G-7 nations on Monday that will disallow the world's second-largest oil exporter from selling crude at a price above $60 per barrel.

Since the outset of its war with Ukraine, Russia has sold its oil at discounted prices. As of Friday, Russian Urals crude traded at $67 per barrel -- an amount little higher than the cap. But the price cap aims to ensure that Russian oil sales remain well below global oil prices, which stand at about $80 per barrel.

The policy relies on compliance from insurance companies, shipping outfits and other businesses involved in the transport of Russian oil. Many of those firms are based in Western countries and will play a key role in ensuring that any sale of oil from Russia is kept below the mandated price.

Alongside a newly announced EU ban on seaborne imports of Russian oil, the price cap will, in theory, limit the amount of revenue Russia can generate from the sale of oil to countries that have not imposed a ban.

What's the reason behind the price cap?

Western countries have slapped the price cap on Russian oil in pursuit of a balance between two goals: curtailing the oil funds that drive Russia's war effort while allowing the country to continue selling oil in order to preserve global supply and avert a far-reaching price shock.

The price cap was set at $60 per barrel after months of contentious negotiations between Western allies, some of whom wanted a much lower cap in hope of severely undermining Russia's war aims while others wanted a higher cap that would keep oil flowing and prices low.

"It's very delicate," Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston, told ABC News. "The sale of crude is funding the war. They're really trying to take out that economic engine."

"But if you cut the price too low, Russia has no reason to produce. It says, 'I'll shut it down and hurt all of you in ways that will hurt the global economy," he added.

How will Russia respond to the price cap?

A Russian government official sharply criticized the price cap on Sunday, saying the company would halt oil sales to any country that supports the measure.

Mikhail Ulyanov, a senior Russian diplomat, accused Western nations of weaponizing oil markets.

"They can make politically motivated anti-market decisions putting at risk stability of the oil market," he said. "Russia has the right to react accordingly."

Russia will likely seek to undermine and circumvent the price cap by using insurance and shipping companies that operate outside the purview of the ban, David Doherty, an analyst who tracks the oil industry at BloombergNEF, told ABC News.

Such a response would preserve the current level of Russian oil sales and avert disruption of global supply, leaving oil and gasoline prices largely unchanged, he added.

"You'll see a status quo where China and India continue to take Russian barrels, using ships that are non-EU and insurance that's non-EU," he said.

What does the price cap mean for gas prices in the US?

Still, some analysts said the EU ban and price cap would curtail global oil supply and ultimately drive U.S. gasoline prices upward. Even if Russia evades some enforcement of the ban, they will struggle to sustain their current output or intentionally cut exports, they said.

"There is going to be a shortening of supply and therefore a price increase for crude oil and that will get reflected in an increased price at the gas pump for all of us," said Krishnamoorti, of the University of Houston.

The Western moves will result in an increase in U.S. gasoline prices of between 5% to 10% over the next three weeks, Krishnamoorti estimated.

Global oil prices face other headwinds like an OPEC Plus decision to preserve output at current levels that could further strain supply as well as the potential lifting of COVID lockdowns in China that may boost demand.

Taken together, these factors could send U.S. gasoline prices up as much as 25% over the next three weeks, Krishnamoorti warned.

However, other analysts said that the impact of the cap on Russian oil prices could be minimal or nonexistent, cautioning that it remains too early to tell how U.S. gas prices will respond.

"Consumers don't necessarily need to be worried about an imminent shockwave," Patrick de Haan, the head of petroleum analysis at GasBuddy, told ABC News. "There are thousands of potential outcomes."

Copyright © 2022, ABC Audio. All rights reserved.


Nike drops Brooklyn Nets guard Kyrie Irving over antisemitism

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(NEW YORK) -- Nike has severed ties with Brooklyn Nets guard Kyrie Irving following criticism for antisemitism.

"Kyrie Irving is no longer a Nike athlete," the company said in a statement to ABC News.

Irving received widespread criticism after he posted a link to an antisemitic film on Twitter in late October.

The NBA star was suspended by his team in November after he and the Nets received criticism for not coming down more forcefully. Irving was suspended for "at least" five games on Nov. 3 for failing to "disavow antisemitism" when questioned by the media about the Twitter post.

"We were dismayed today, when given an opportunity in a media session, that Kyrie refused to unequivocally say he has no antisemitic beliefs, nor acknowledge specific hateful material in the film," the Nets said in a statement at the time. "This was not the first time he had the opportunity -- but failed -- to clarify."

One day after the team's suspension, Nike announced it was suspending its relationship with Irving.

"At Nike, we believe there is no place for hate speech and we condemn any form of antisemitism," Nike said in a statement. "To that end, we've made the decision to suspend our relationship with Kyrie Irving effective immediately. We are deeply saddened and disappointed by the situation and its impact on everyone."

Irving signed a deal with Nike in 2011 when he left Duke University and entered the NBA draft. He was selected No. 1 overall by the Cleveland Cavaliers. His first line of signature shoes was released in 2014.

At the same time as Irving's deal with Nike was suspended, it announced the cancellation of the launch of the Kyrie 9 shoe.

Irving ended up being suspended eight games before returning to the Nets' starting lineup on Nov. 20. He had played in all nine games since Nov. 20, including his return against Memphis, and the team has gone 6-3.

ABC News' Ahmad Hemingway contributed to this report.

Copyright © 2022, ABC Audio. All rights reserved.


Taylor Swift fans sue Ticketmaster over tour presale meltdown

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(NEW YORK) -- Many Taylor Swift fans expressed outrage online over the presale ticket disaster, but now some of those fans are taking it a step further and claiming the ordeal was illegal.

Nearly two dozen Taylor Swift fans filed a complaint Friday in Los Angeles County Superior Court against Ticketmaster, alleging intentional deception, following major issues with the Taylor Swift: Eras Tour presale tickets, which left many fans unable to buy tickets for the singer's upcoming tour.

"There is a problem with the way they're doing business, but they're really hurting the fans in how they're doing it," said Julie Barfuss, a plaintiff in the suit.

The complaint asks for Ticketmaster to be fined $2,500 per violation, theoretically meaning that a violation could be counted on every one of the two million tickets sold, according to the lawsuit.

ABC News reached out to both Ticketmaster as well as LiveNation, the parent company of Ticketmaster, for comment on the lawsuit but has not yet heard back.

In a recent statement, LiveNation denied allegations of price-hiking and said Ticketmaster "does not set or control ticket prices" and "does not embrace deceptive and questionable secondary ticketing practices."

Barfuss is one of more than two dozen fans suing Ticketmaster and Live Nation alleging "fraud, price fixing and antitrust violations."

"Ticketmaster is a monopoly that is only interested in taking every dollar it can from a captive public," the complaint states.

The highly anticipated Eras Tour will be the first time Swift is on tour in nearly five years, performing new songs off her record-breaking Midnight album released in October.

Presale tickets for the tour went live on Ticketmaster on Nov. 15. At that time, tickets were reserved only for "verified" Swift fans, who had registered to a Ticketmaster program prior to the release of the tickets. But, due to the overwhelming surge in demand, many fans reportedly waited for hours in online waiting rooms for access to the tickets, and many reportedly never got the chance to even buy one.

Those who were able to purchase tickets reported exorbitant prices and up-charges. The debacle led Ticketmaster to cancel general ticket sales due to "insufficient" inventory.

Fans took to social media to accuse Ticketmaster of hiking ticket prices and selling most of the tickets to scalpers, who they say often charge even more fees in the resale market.

Swift broke her silence on social media and shared a statement that expressed her disappointment, saying "I'm extremely protective of my fans" and it's "excruciating for me to just watch mistakes happen with no recourse."

Some fans still think that it was more than just a mistake.

"They messed with the wrong fan base," said Jennifer Kinder, an attorney for the plaintiffs. "If Ticketmaster can do this to hardworking Americans that are trying to buy a ticket, they can do it to anybody."

Copyright © 2022, ABC Audio. All rights reserved.


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