DealBook: Peter Madoff Is Sentenced to 10 Years for His Role in Fraud

8:48 p.m. | Updated

Peter B. Madoff was sentenced on Thursday to 10 years in prison for crimes that helped his brother, Bernard L. Madoff, swindle investors out of billions of dollars in a Ponzi scheme that collapsed four years ago this month.

A lawyer by training, Peter Madoff is the second figure in the scandal to be sentenced. His older brother, Bernard, pleaded guilty in March 2009 and is serving a prison term of 150 years.

Mr. Madoff, in a slate blue suit and striped blue tie, entered the crowded courtroom accompanied only by his lawyers, although many members of his family and friends had written letters of support for him. The 63 character references stood in stark contrast to his brother’s sentencing, when the judge in that case noted that he had not received a single supportive letter.

Still, a handful of victims attended the hearing, including two who spoke emotionally about the financial and psychological hardships they are enduring and urged the judge to impose a life sentence.

In his own brief statement to the judge, Peter Madoff said he was “deeply ashamed” of his conduct and had “tried to atone by pleading guilty.” He added: “I am profoundly sorry that my failures have let so many people down, including my own loved ones and family.”

In June, Peter Madoff, 67, admitted to a range of crimes, including falsifying documents, lying to securities regulators and filing sham tax returns. Prosecutors said that if Peter Madoff had properly done his job as chief compliance officer at Bernard L. Madoff Investment Securities, regulators would likely have detected the fraud years earlier.

Peter Madoff was not charged with knowing about the Ponzi scheme, and insists that he first learned about it only 36 hours before his brother’s arrest.

During the sentencing in Federal District Court in Manhattan, Judge Laura Taylor Swain expressed skepticism about that assertion.

“Peter Madoff’s contention that he did not know that anything was wrong with the investment advisory business is beneath the dignity” of a sophisticated Wall Street executive, Judge Swain said.

“It is also, frankly, not believable,” she added.

Peter Madoff’s lawyer, John R. Wing, has portrayed his client as a loving, charitable family man who was bullied, betrayed and destroyed by the imperious older brother he had idolized all his life. Bernard Madoff was widely viewed as an honorable and successful trader, Mr. Wing wrote in a letter to the court, “and no one believed it more than Peter did. Peter revered him and trusted him implicitly.”

In the geography of the Madoff offices, the money management business run by Bernard Madoff operated from a separate suite two floors below Peter Madoff’s office and the firm’s trading operations. With separate key cards, Bernard Madoff kept the suite off limits, shutting his brother and sons out of the investment advisory business.

In pleading guilty, Peter Madoff has agreed to a 10-year sentence and a forfeiture order of $143 billion. Though a staggering sum that does not bear any relation to what Mr. Madoff could pay, it is tied to the amount of the crime’s proceeds. The government set the amount that high to send a clear signal that it would seize all of his and his family’s assets and distribute them to victims.

On the day of Bernard Madoff’s arrest, his customers thought their accounts contained a total of $64.8 billion, but most of that wealth was fictitious. Madoff’s customers had actual cash losses of about $17.3 billion in the fraud, according to Irving H. Picard, the Madoff bankruptcy trustee.

Mr. Picard has recovered about $9.3 billion and distributed about $3.7 billion of that to eligible victims. An additional $2.35 billion has been seized by federal prosecutors under forfeiture laws and will be distributed separately by the Justice Department.

Peter Madoff worked alongside his brother for 39 years. Though Bernard was the firm’s sole owner, he paid Peter handsomely. The government said that Peter received about $40 million in compensation from 1998 to 2008. That money was put toward his and his wife, Marion’s, lifestyle that included homes in Old Westbury, N.Y., on Long Island, and Palm Beach, Fla., as well as a $4 million apartment on Park Avenue.

In his letter to the judge, Mr. Wing cited the early patterns of the Madoff family as a reason Peter Madoff dutifully obeyed his brother. “Their mother viewed Bernie as the prince, and Peter longed for the love and approval of his brother and family,” Mr. Wing wrote. “Peter had a large build, and Bernie ridiculed him mercilessly, calling him ‘Rollo,’ which hurt Peter deeply.”

But despite that demeaning abuse, “Peter seemed to be blind to his brother’s flaws,” Mr. Wing wrote.

Judge Swain saw it differently. In her view, Peter knew for decades that the Madoff business operation was “a little bit crooked and he was content to go along with that.” She then added, “We all know that a crooked operation is only rarely, if ever, just a little bit crooked.”

Before Thursday’s hearing, both sides filed letters to the judge highlighting factors they hoped she would consider.

The prosecutors stressed the harm done by Peter Madoff’s willful failure to carry out his duties. They cited a letter submitted by Marion Wiesel, the wife of the Nobel Peace Prize-winner Elie Wiesel, whose foundation lost $15.2 million in the fraud. Mrs. Wiesel said the crime that flourished under Peter Madoff’s neglect caused “the immediate and dramatic loss of a lifetime’s worth of work and savings.”

Judge Swain directed Peter Madoff to report to prison on Feb. 6, implicitly granting a request that he not be incarcerated until after his granddaughter’s bat mitzvah in late January.

In her own appeal to the court, the granddaughter wrote, “I would give anything just to have him see me reading from the Torah even if it was only for a second.”

The judge also complied with a request by Mr. Wing that she ask that Peter be assigned to a nearby prison in Otisville, N.Y., permitting regular visits from his family, though that decision ultimately rests with the Bureau of Prisons.

Besides the two brothers, criminal charges have been filed against a dozen other defendants. Bernard Madoff, 74, is serving his sentence at a federal prison near Raleigh, N.C. Peter’s daughter, Shana Madoff Swanson, was a lawyer at the Madoff firm but has not been charged with any crime.

Frank DiPascali, a longtime Madoff employee, pleaded guilty in August 2009 and is awaiting sentencing. Of the remaining defendants, six have pleaded guilty to violations of tax and securities laws that sustained the scheme. The remaining five defendants have denied the government’s charges and their trial is scheduled for October.

Among the 41 victim letters submitted by prosecutors was an unexpected one from Robert Roman, the brother-in-law of Bernard’s wife, Ruth Madoff. Mr. Roman said that although he and his wife lost their life savings in the fraud, he did not want to see Peter imprisoned.

“Our family is supposed to hate him. But — we do not,” Mr. Roman wrote. “Peter in prison is an answer only to those who seek revenge. It is not a solution.”

Toward the end of the hourlong sentencing, as Peter Madoff fought back tears, Judge Swain counseled the defendant that true atonement required that he fully disclose what happened at his brother’s firm.

“Be honest about all that you have done and all that you have seen,” the judge said. “In other words, all that you know.”

A version of this article appeared in print on 12/21/2012, on page B1 of the NewYork edition with the headline: Peter Madoff Sentenced to 10 Years in Fraud Case.

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Fearful 'end of world' calls, emails flood NASA as Dec. 21 nears

If there's one government agency really looking forward to Dec. 22, it's NASA.

The space agency said it has been flooded with calls and emails from people asking about the purported end of the world — which, as the doomsday myth goes, is apparently set to take place Friday, Dec. 21.

The myth might have originated with the Maya calendar, but in the age of the Internet and social media, it proliferated online, raising questions and concerns among hundreds of people around the world who have turned to NASA for answers.

Dwayne Brown, an agency spokesman, said NASA typically receives about 90 calls or emails per week containing questions from people. In recent weeks, he said, that number has skyrocketed — from 200 to 300 people are contacting NASA per day to ask about the end of the world.

"Who's the first agency you would call?" he said. "You're going to call NASA."

The questions range from myth (Will a rogue planet crash into Earth? Is the sun going to explode? Will there be three days of darkness?) to the macabre (Brown said some people have "embraced it so much" they want to hurt themselves). So, he said, NASA decided to do "everything in our power" to set the facts straight.

That effort included interviews with scientists posted online and a Web page that Brown said has drawn more than 4.6 million views.

It also involved a video titled "Why the World Didn't End Yesterday." Though the title of the video implies a Dec. 22 release date, Brown said NASA posted the four-minute clip last week to help spread its message.

The website addresses several scenarios — the possibility of planetary alignments, total blackouts, polar shifts and "a planet or brown dwarf called Nibiru or Planet X or Eris that is approaching the Earth and threatening our planet with widespread destruction" — but comes to the same conclusion.

In short, NASA says, "the world will not end in 2012."

"Our planet has been getting along just fine for more than 4 billion years, and credible scientists worldwide know of no threat associated with 2012," the website says.

The Griffith Observatory will also be trying to debunk doomsday predictions. It announced plans to stay open late Friday evening — until one minute past midnight — to "demonstrate that claims regarding the Maya calendar, planetary alignments, rogue planets, galactic beams, and other related phenomena have no basis in fact."

A few years ago, NASA suspected that it might have to create such a campaign when the idea of the world ending began "festering," Brown said. The apocalyptic action movie "2012," released in 2009, didn't help, he said.

"We kind of look ahead — we're a look-ahead agency — and we said, 'You know what? People are going to probably want to come to us' " for answers, Brown explained. "We're doing all that we can do to let the world know that as far as NASA and science goes, Dec. 21 will be another day."

As for Saturday, when the questions — not the world — end: "I wish it was tomorrow."

kate.mather@latimes.com

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Spoiler Alert: First 3-D Printed Records Sound Awful

The needle drops and a series of high, repetitive whines come from the album. Then a crackling sound, and a muffled guitar riff. Finally, Kurt Cobain’s voice — audible, but distant and hollow, like he is singing in a tunnel with a scarf over his mouth.

It’s about the worst version of “Smells Like Teen Spirit” you could find. But it is awesome all the same for its totally unique medium. This particular LP is part of the batch of the first records ever to be created on a 3-D printer.

“It’s surprising how much you can deform and down-sample an audio file and still recognize it,” says Amanda Ghassaei, assistant tech editor at Instructables, who printed the record, and several others, including music from the Pixies, Daft Punk, and Radiohead.

Ghassaei used a state-of-the-art Objet Connex 500 printer to generate the disc. The whole process is possible because printing resolution has finally become high enough to create the audio-laden grooves for the needle to track and amplify. For her printed records, Ghassaei sets the machine to its finest setting, 600 dpi, with 16 micron steps, about the highest quality available on the market. But it’s still far lower resolution than on a vinyl LP, by a factor of 10 or so; hence the muddled sound that results in part from the needle responding to the layering of the printed plastic. Ghassaei used an 11 Khz sampling rate — the highest the resolution would allow, around 1/4 what you get from an MP3. Even at that low of a rate, the printer’s deficiencies cut off the song’s high-range tones.

“It’s really stripped down, it’s down to the bare essentials,” she says. “It’s never going to be as good as vinyl. It’s not really set up for that. But it’s cool because you can really be creative with it.”

To create the 3-D model for the record, Ghassaei starts with the song’s waveform, using Python to take it directly from an MP3, and digitally renders the shape of it into an STL wireframe using Processing, an open source tool that automates the file generation. She then uses the software to wrap it in a spiral on a 3-D 12-inch disc, varying the depth of the groove to match the waveform. Compared to a normal record, hers have increased amplitude and groove depth to account for the coarse resolution.

While it’s a first for a printed proper LP, others have toyed with simpler forms of 3-D printable music. Earlier this year, Fred Murphy generated “Stairway to Heaven” and three other songs on discs for the classic Fisher Price record player. That toy turntable is different than the common vinyl record player, though; it uses a music-box system with tines that sound as they rotate over the record’s raised bumps. Murphy posted the how-to for his project on Instructables, and offers pre-made versions of his discs through Shapeways.

Ghassaei, like Murphy, has put her project up on Instructables, though it’s not particularly useful unless you have access to a high-end printer in the range of hundreds of thousands of dollars. She is also limited to the first 60 seconds or so, because of the data- and memory-intense 3-D file. A full song would take up a whole side of the album, and the file size would exceed a gigabyte. But that’s not really the point.

“It’s really cool to kind of push the technology and see what you can get out of it,” says Ghassaei. “I’ve got a bunch more that I want to do.”

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China’s airing of ‘V for Vendetta’ stuns viewers

BEIJING (AP) — Television audiences across China watched an anarchist antihero rebel against a totalitarian government and persuade the people to rule themselves. Soon the Internet was crackling with quotes of “V for Vendetta‘s” famous line: “People should not be afraid of their governments. Governments should be afraid of their people.”

The airing of the movie Friday night on China Central Television stunned viewers and raised hopes that China is loosening censorship.

“V for Vendetta” never appeared in Chinese theaters, but it is unclear whether it was ever banned. An article on the Communist Party’s People’s Daily website says it was previously prohibited from broadcast, but the spokesman for the agency that approves movies said he was not aware of any ban.

Some commentators and bloggers think the broadcast could be CCTV producers pushing the envelope of censorship, or another sign that the ruling Communist Party‘s newly installed leader, Xi Jinping, is serious about reform.

“Oh God, CCTV unexpectedly put out ‘V for Vendetta.’ I had always believed that film was banned in China!” media commentator Shen Chen wrote on the popular Twitter-like Sina Weibo service, where he has over 350,000 followers.

Zhang Ming, a supervisor at a real estate company, asked on Weibo: “For the first time CCTV-6 aired ‘V for Vendetta,’ what to think, is the reform being deepened?”

The 2005 movie, based on a comic book, is set in an imagined future Britain with a fascist government. The protagonist wears a mask of Guy Fawkes, the 17th-century English rebel who tried to blow up Parliament. The mask has become a revolutionary symbol for young protesters in mostly Western countries, and it also has a cult-like status in China as pirated DVDs are widely available. Some people have used the image of the mask as their profile pictures on Chinese social media sites.

Beijing-based rights activist Hu Jia wrote on Twitter, which is not accessible to most Chinese because of government Internet controls: “This great film couldn’t be any more appropriate for our current situation. Dictators, prisons, secret police, media control, riots, getting rid of ‘heretics’ … fear, evasion, challenging lies, overcoming fear, resistance, overthrowing tyranny … China’s dictators and its citizens also have this relationship.”

China’s authoritarian government strictly controls print media, television and radio. Censors also monitor social media sites including Weibo. Programs have to be approved by the State Administration of Radio, Film and Television, but people with knowledge of the industry say CCTV, the only company with a nationwide broadcast license, is entitled to make its own censorship decisions when showing a foreign movie.

“It is already broadcast. It is no big deal,” said a woman who answered the phone at movie channel CCTV-6. “We also didn’t anticipate such a big reaction.”

The woman, who only gave her surname, Yang, said she would pass on questions to her supervisor, which weren’t answered.

The spokesman for the State Administration of Radio, Film and Television said he had noticed the online reaction to the broadcast. “I’ve not heard of any ban on this movie,” Wu Baoan said Thursday.

The film is available on video-on-demand platforms in China, where movie content also needs to be approved by authorities.

A political scientist at the Chinese Academy of Social Sciences who used to work for CCTV said the film might have approval, or it could have been CCTV’s own decision to broadcast it.

“Every media outlet knows there is a ceiling above their head,” said Liu Shanying. “Sometimes we will work under the ceiling and avoid touching it. But sometimes we have a few brave ones who want to reach that ceiling and even express their discontent over the censor system.

“It is very possible that CCTV decided by itself” to broadcast the film, Liu said. If so, he added, it would have been “due to a gut feeling that China’s film censorship will be loosened or reformed.”

“V for Vendetta” was released in the United States in 2005 and around the world in 2006. China has a yearly quota on the numbers of foreign movies that can be imported on a revenue share basis, making it tough to get distribution approval. Other movies that failed to reach Chinese screens in 2006 include “Brokeback Mountain” and “Pirates of the Caribbean: Dead Man’s Chest.” Chinese moviegoers that year were able to see “Mission: Impossible III” with Tom Cruise and “The Painted Veil,” which was filmed in China and set in a Chinese village.

Warner Brothers, which produced and distributed “V for Vendetta,” declined to comment.

China doesn’t have a classification system, so all movies shown at its cinemas are open to adults and children of any age. A filmmaker and Beijing Film Academy professor, Xie Fei, published an open letter on Sina Weibo on Saturday calling for authorities to replace the movie censorship system that dates from the 1950s with a ratings system.

The airing of “V for Vendetta” raised some hopes about possible changes under Xi, who was publicly named China’s new leader last month. He has already announced a trimmed-down style of leadership, calling on officials to reduce waste and unnecessary meetings and pomp. His reforms are aimed at pleasing a public long frustrated by local corruption.

State media say they have reduced reports on officials’ trips as part of this drive. The official Xinhua News Agency warned this week that media outlets should “learn to play professionally in today’s information age as an increasingly picky audience is constantly” putting them under scrutiny.

An American business consultant and author with high-level Chinese contacts said there is no less commitment to one-party rule in China, so any media reforms will only go so far.

“You can’t have a totally free media as we would have in the West and still maintain the integrity of a one-party system,” said Robert Lawrence Kuhn, who wrote the book “How China’s Leaders Think.” He said he thinks restrictions are being eased, “but it has to be limited.”

The new leadership has to tread carefully, Kuhn said, because in the age of the Internet, talk about reforms won’t be forgotten.

“High expectations, if they are not fulfilled, will create a worse situation,” he said.

___

AP researchers Flora Ji and Henry Hou contributed to this report.

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DealBook: Leniency Denied, UBS Unit Admits Guilt in Rate Case

UBS on Wednesday became the first big global bank in more than two decades to have a subsidiary plead guilty to fraud.

UBS, the Swiss bank, scrambled until the last minute to avoid that fate. A week ago, in a bid for leniency over interest-rate manipulation, the bank’s chairman traveled to Washington to plead his case to the Justice Department, according to people briefed on the matter. Knowing the long odds, the chairman, Axel Weber, asked the criminal division for a lighter punishment.

But the government did not budge. With support from Attorney General Eric H. Holder Jr., the agency’s criminal division decided the bank’s actions were simply too egregious, people briefed on the matter said.

On Wednesday, UBS announced it would plead guilty to one count of felony wire fraud as part of a broader settlement. With federal prosecutors, British, Swiss and American regulators secured about $1.5 billion in fines, more than triple the only other rate-rigging case, against Barclays. The Justice Department also filed criminal charges against two former UBS traders.

The guilty plea and the individual charges provide the Justice Department with a long-awaited case to prove it is taking a hard line against financial wrongdoing.

Since the financial crisis, the government has faced criticism that it has not brought significant criminal actions. The money-laundering case against HSBC, which averted indictment when it agreed instead last week to pay $1.9 billion, raised more concerns that the world’s largest and most interconnected banks were too big to indict.

Libor Explained

With UBS, prosecutors wanted to send a warning.

The Justice Department’s decision stops short of imperiling the broader financial system because it shields UBS’s parent company from losing its charter, among other major repercussions. But by securing a guilty plea against a subsidiary, the department has shown that it is willing to punish severely one of the world’s most powerful banks. It was the first guilty plea from a major financial institution since Drexel Burnham Lambert admitted to six counts of fraud in 1989.

“We are holding those who did wrong accountable,” Lanny A. Breuer, the head of the Justice Department’s criminal division, said at a news conference on Wednesday. “We cannot, and we will not, tolerate misconduct on Wall Street.”

The rate-rigging inquiry, which has ensnared more than a dozen big banks, is focused on major benchmarks like the London interbank offered rate, or Libor. Such rates are central to determining the borrowing rates for trillions of dollars of financial products like corporate loans, mortgages and credit cards.

The fallout from the UBS case is expected to increase pressure on some of the world’s largest financial institutions and spur settlement talks across the banking industry. The Royal Bank of Scotland has said it expects to pay fines before its next earnings statement in February, while American institutions, including JPMorgan Chase, also remain in regulators’ cross hairs.

The UBS case highlighted a pattern of abuse that authorities have uncovered in a multiyear investigation into the rate-setting process. The government complaints laid bare a 10-year scheme, describing how the bank had reported false rates to squeeze out extra profits and deflect concerns about its health during the financial crisis.

“The settlement reflects the magnitude of the wrongdoing and how critical it is that these be honest and reliable,” said Gary S. Gensler, chairman of the Commodity Futures Trading Commission, the American regulator that opened the UBS investigation.

Six months ago, authorities did not seem ready to take an aggressive stance with UBS.

They had just scored their first Libor settlement, a $450 million payout from Barclays. UBS, which had already struck a conditional immunity deal with the Justice Department’s antitrust division, figured its penalty would be similar.

The immunity deal, some UBS executives contended, would protect the bank from criminal charges. Even officials at the Justice Department were skeptical about the prospect of levying large penalties, according to people briefed on the matter.

Then the tone shifted this fall. After examining thousands of e-mails and hours of taped phone calls, the agency’s criminal division concluded that the conduct at the Japanese subsidiary warranted a criminal charge.

Agency officials also cited the bank’s repeated run-ins with authorities. For example, the Swiss bank had agreed in 2009 to pay $780 million to settle charges that it had helped clients avoid taxes.

Not everyone in the Justice Department agreed on the course of action. According to people briefed on the matter, the antitrust unit pushed for less-onerous penalties, citing the cooperation of UBS. With officials split over how to proceed, Mr. Holder cast the deciding vote in favor of securing a guilty plea from the subsidiary.

The move caught UBS off guard. The bank dispatched several lawyers to Washington to negotiate the fine print of the deal, setting up makeshift offices at the Four Seasons hotel in Georgetown.

Mr. Weber joined the lawyers, in a typical last-ditch appeal to the criminal division. Last Wednesday, Mr. Weber and his general counsel explained to the agency how UBS had overhauled its management ranks, bolstered internal controls and generally tried to clean up its act.

Mr. Breuer and other Justice Department officials agreed to consider the bank’s request to abandon the guilty plea, people briefed on the talks said. But hours later, a prosecutor phoned to say the agency was standing firm.

UBS agreed to the guilty plea, conceding that the Japanese unit would otherwise most likely face an indictment. In turn, prosecutors credited the bank for its recent efforts to improve.

“We are pleased that the authorities gave us credit for the important and positive changes we have already made,” Mr. Weber said in a statement.

The Commodity Futures Trading Commission adopted a similarly tough attitude.

Since Thanksgiving, UBS has tried to negotiate lower penalties with the regulator, according to people briefed on the matter. But David Meister, the agency’s enforcement chief, would not back down from $700 million in fines, an agency record.

“Even for a megabank, that amount serves as a direct deterrent,” said Bart Chilton, a commissioner at the regulator.

Authorities’ strict stance stems from the extent of the bank’s actions. The Commodity Futures Trading Commission cited more than 2,000 instances of illegal acts involving dozens of UBS employees across continents.

The most significant wrongdoing took place within the Japanese unit, where traders colluded with other banks and brokerage firms to tinker with yen-denominated Libor and bolster their returns.

In colorful e-mails, instant messages and phone calls, traders tried to influence the rates. “I need you to keep it as low as possible,” one UBS trader said to an employee at another brokerage firm, according to the complaint filed by the Financial Services Authority of Britain.

As the employees carried out the ostensible manipulation, they also celebrated the efforts, with one trader referring to a partner in the scheme as “superman.” “Be a hero today,” he urged, according the complaint.

The Justice Department also took aim at two former UBS traders, Tom Hayes, 33, and Roger Darin, 41, bringing the first criminal charges against individuals connected to the Libor case.

Like other traders at UBS, Mr. Hayes was willing to reward others for their efforts. He trumpeted the work of an outside broker who had helped, writing in a message, “i reckon i owe him a lot more.” Another broker responded that the person was “ok with an annual champagne shipment,” and “a small bonus every now and then.”

As prosecutors ramped up their investigation, Mr. Hayes even tried to dissuade former colleagues from cooperating, the complaint said. “The U.S. Department of Justice, mate, you know,” he said, they are the “dudes who…put people in jail. Why…would you talk to them?”

Mark Scott, Ashley Southall and Julia Werdigier contributed reporting.

A version of this article appeared in print on 12/20/2012, on page A1 of the NewYork edition with the headline: Leniency Denied, UBS Unit Admits Guilt In Rate Case.

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Jury awards $6.9 million to boy molested by L.A. Unified teacher

A jury has awarded $6.9 million to a 14-year-old boy who was molested by a Los Angeles Unified School District teacher when he was a fifth-grade student.

The judgment, among the largest ever awarded in a district molestation case, comes at a time when L.A. Unified faces close to 200 pending molestation and lewd conduct claims arising from another teacher's alleged conduct at Miramonte Elementary School.

Tuesday's jury award stems from acts committed by Forrest Stobbe, a veteran teacher at Queen Anne Place Elementary School in the Mid-Wilshire area. In September 2011, Stobbe pleaded no contest to two counts of a lewd act on a child and to continuous sexual abuse of a child younger than 14. He is currently serving a 16-year sentence in prison.

The case turned on how much responsibility the school system bore, and whether district employees should have recognized warning signs that Stobbe posed a threat to the boy. Attorneys for the school system insisted that district staff acted in a professional and appropriate manner and could not have known what Stobbe was doing.

Stobbe molested the boy beginning in October 2008, when the 10-year-old was his student, and continued to abuse him through the following July, when he was arrested.

Early in the school year, Stobbe befriended the boy, earning his trust, then began to molest him in his classroom in episodes that became more brazen and invasive. He also gave the boy numerous gifts.

Stobbe also ingratiated himself with the victim's family, buying the boy season passes to amusement parks, where he would take the boy, then molest him before dropping him off at home.

The family appreciated the teacher's interest so much that the boy's father asked his son if Stobbe should become his godfather. It was then that the boy told his father of the abuse, the father testified.

The evidence against Stobbe included a jar of petroleum jelly in his school desk that tested positive for the boy's DNA. The boy told police that Stobbe used the jelly as a lubricant for sex acts.

The plaintiffs argued that there were abundant warning signs that should have alerted Stobbe's supervisors.

More than two years before his arrest, Stobbe was observed alone with a girl in his car. He allegedly told the principal that he had parental permission to give the student a ride, but that was never verified. He also had private lunches with students in his classroom, which was against school rules.

In another incident, an angry student pushed Stobbe down a flight of stairs, injuring the teacher. The student later declined to talk to police, who consider him another possible victim.

In November 2008, a girl in Stobbe's class complained that the teacher was making her feel uncomfortable. Stobbe, she said, was stroking her hair, putting it into a ponytail and had once touched her buttocks.

Principal Mary Ann Hall testified that she called the police department, which advised her to handle the matter on her own — a claim the Los Angeles Police Department disputes. If police had been alerted to allegations of such contact, the department would have launched an investigation, said Det. Moses Castillo, who supervised the investigation after Stobbe's arrest.

Hall, who has since retired, testified that she properly notified her supervisors. Attorneys for the family asserted that Hall either failed to do so, or that her supervisors failed to act on the information.

In the end, the panel of six men and six women found that L.A. Unified was 30% responsible for total damages, which they calculated at $23 million. The other 70% of the liability was assigned to Forrest Stobbe, but attorneys said they had no plans to collect from the imprisoned former educator.

Responding to the verdict, a district spokesman emphasized the district's commitment to the safety of children.

"We take our duty to protect our students seriously and are continually looking for ways that we can strengthen our screening and reporting processes to ensure that no child is ever hurt in this way," general counsel David Holmquist said. "Although we can't change what happened in this case, we remain committed to doing everything in our power to promote healing and improve trust with those impacted."

Issues in the Stobbe case — alleged lack of oversight, missed warning signs — could come into play with the Miramonte cases.

There, parents questioned teacher Mark Berndt's propensity for taking pictures of students, an issue that administrators did not pursue. Photos later emerged of blindfolded students allegedly being spoon-fed Berndt's semen, among other alleged wrongdoings.

Berndt has pleaded not guilty to 23 counts of lewd conduct.

Damage claims — the precursor to a lawsuit — have been filed by 126 students and 63 parents. There are also six lawsuits on behalf of 37 students and one involving 11 parents.

"Some of the same issues in the Miramonte case are highlighted here," said attorney Don Beck of the San Diego firm Estey & Bomberger, which represented the family of the victim in the Stobbe case. "The same lack of monitoring teachers, the same lack of supervision that allowed these events to happen."

howard.blume@latimes.com

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Text Adventure: <cite>Zork</cite> Creators Honored With Pioneer Award

In the days before graphics, computer games had to entice players with nothing more than a well-turned phrase.

Whether you prefer to call them “text adventures” or “interactive fiction,” games played with nothing but writing and verbal commands were a significant part of the early days of interactive entertainment. At the forefront of the medium were the designers of Infocom, which created and published text games like Zork, Starcross and The Hitchhiker’s Guide to the Galaxy that delighted players with clever writing and had them absolutely tearing their hair out with difficult puzzles.

Today, Wired can exclusively report that Marc Blank and Dave Lebling, two of the co-founders of Infocom and co-creators of Zork, will be honored with the Academy of Interactive Arts and Sciences’ Pioneer Award at the DICE Summit in February. The award is given to the gamemakers whose groundbreaking early work laid the foundations of the multi-billion-dollar videogame industry. Previous recipients include David Crane, creator of Pitfall!, and Asteroids designer Ed Logg.

Wired spoke to Dave Lebling, as well as another Infocom designer, for this story. But in honor of their achievements and their medium of choice, we’ve decided to present the results of our interviews in a text adventure of our own, below. You’ll have to play to find out more.

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Tom Hooper, Mychael Danna join crowded slate of Palm Springs honorees

LOS ANGELES (TheWrap.com) – “Les Miserables” director Tom Hooper and “Life of Pi” composer Mychael Danna are the latest awards-season hopefuls to be added to the slate of honorees at the Palm Springs International Film Festival, PSIFF organizers announced on Tuesday.

The two will join a list of honorees that in recent days has expanded to include Helen Mirren, Richard Gere, Bradley Cooper and Sally Field. Other awards will go to Helen Hunt, Naomi Watts, Robert Zemeckis and the cast of “Argo.”

Hooper will receive the Sonny Bono Visionary Award, named in honor of the singer/producer/actor and Palm Springs mayor who launched the festival. Past recipients include Danny Boyle, Quentin Tarantino, Baz Luhrmann and last year’s winner, “The Artist” director Michel Hazanavicius.

“Tom Hooper brilliantly transforms the classic stage musical ‘Les Misérables’ into a cinema marvel,” said festival chairman Harold Matzner in a press release announcing the awards. “By asking his amazing cast of actors to sing live on film, Hooper allows them to connect even further with their characters, resulting in emotional powerhouse performances that are enthralling audiences worldwide.”

Danna, who has won acclaim for his score to Ang Lee’s “Life of Pi,” will receive the Frederick Loewe Award for Film Composing, a PSIFF honor that in the past has gone to T Bone Burnett, Alexandre Desplat, Danny Elfman, Randy Newman and Diane Warren.

Danna previously wrote music for Lee’s films “The Ice Storm” and “Ride With the Devil.” “Mychael Danna is a pioneer in creating original compositions that are as dramatic and innovative as the films in which they are featured,” said Matzner in the release.

PSIFF’s Awards Gala will take place on Saturday, January 5, and the festival will run from January 3 through January 14.

Movies News Headlines – Yahoo! News

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Irish Government Set to Allow Abortion in Rare Cases

DUBLIN — The Irish government said Tuesday that it was preparing to allow abortion under limited circumstances in an effort to comply with demands by the European Court of Human Rights to clarify the country’s legal position on the issue.

Cathal Mcnaughton/Reuters

A vigil was held in Dublin on Monday in memory of Dr. Savita Halappanavar, a 31-year-old dentist who died after being denied an abortion.

The proposed legislative and regulatory changes would allow abortion only in cases where there is a real and substantial risk to a woman’s life — as distinct from her health.

The Supreme Court ruled in 1992 that abortion was permissible when risk was present, but the government never passed a law to that effect.

Addressing Parliament after the announcement, Prime Minister Enda Kenny was at pains to emphasize that the proposals would allow abortion only in certain cases. He added that the threat of suicide could be among them.

The abortion debate has convulsed Ireland for decades, but calls for change reached a crescendo after the death of Dr. Savita Halappanavar, a 31-year-old dentist, in October. Dr. Halappanavar arrived at a Galway hospital in severe pain and was found to be miscarrying. Her fetus had a heartbeat, making termination of the pregnancy illegal under Irish law. She died of septicemia a week after admission.

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Newport Beach dock renters may withhold holiday love

Marcy Cook embraces the holiday season. The tell? Start with the teddy bears dressed as Santa. More than 1,500 stand sentry around and inside her Newport Beach waterfronthome. Garland and strings of lights threaten to strangle the place like kudzu.

"We decorate a little bit, if you haven't noticed," said Cook, 69. "It's the highlight of the year for us."

Each Christmas, Newport Harbor is ablaze in lights as homeowners go to extraordinary lengths to complement the city's annual Christmas Boat Parade — an indelible tradition that renews itself Wednesday night and continues through Sunday.

But this has been a stressful season here along the tranquil waterfront lined with multimillion-dollar homes.

An increase in city rental fees for residential docks that protrude over public tidelands created a furor when it was approved last week by the City Council.

It also prompted a call to boycott the boat parade and festival of lights by a group calling itself "Stop the Dock Tax."

"It costs us thousands of dollars to voluntarily decorate our homes and boats to bring holiday smiles to nearly 1 million people," organization Chairman Bob McCaffrey wrote to the city. "This year, we are turning off our lights and withdrawing our boats in protest of the massive new dock tax we expect the City Council to levy."

Pete Pallette, a fellow boycott proponent and harbor homeowner, told city leaders the group would call off the boycott only if the council delayed voting on the rent hike. "Otherwise," he vowed, "game on."

In a place where homes come with names and mega-yachts bob in the harbor, it might appear the wealthy are wielding a weapon most often reserved for the masses. A holiday blackout, proponents say, will underscore their displeasure.

Newport's dock fee, which has stood at $100 a year for the last two decades, will now be based on a dock's size. The city says rents will increase to about $250 for a small slip to $3,200 annually for a large dock shared by two homeowners.

"People have been paying $8 a month all these years to access what is public waters," said Newport Beach City Manager Dave Kiff. "That's a pretty good deal. The City Council didn't think the increase it approved was too extreme."

Many did.

They packed council meetings when the hike was discussed, accusing the city of an excessive money grab.

They brushed aside the city's rationale: Statelawmandates cities charge fair market rents for the private use of public lands, and Newport Beach was only now catching up.

And they were unmoved by arguments that the extra revenue will go exclusively to badly needed repairs to a harbor that, despite outward appearances, needs a lot of work.

The city's five-year plan for the harbor calls for $29 million in long-overdue maintenance. Its silt-filled channels haven't been fully dredged since the Great Depression. Ancient, leaky sea walls protecting neighborhoods need to be repaired or replaced.

"We have the makings of a perfect storm like they did on the East Coast" during Superstorm Sandy, said Chris Miller, the city's harbor resources manager. "The sea walls are nearing the end of their useful life."

Even with the rent increases, Newport's dock owners will contribute a tiny fraction of that cost — the rest coming from the federal government and the city's general operating fund.

As dock owners fumed over having to pay more, others recoiled at the proposed boycott of the boat parade, which dates to 1908 when a single gondola led eight canoes illuminated by Japanese lanterns around the harbor. It has now swelled to a decent-sized armada of dozens of boats — some carrying paying customers — that circle past the decorated harbor-front homes.

"The boycott is ridiculous," said Shirley Pepys, whose frontyard on Balboa Island has been taken over by a family of penguins dressed for a Hawaiian luau.

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