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Business news in brief

Business news from around the region and elsewhere.


Arrest in $2-million fraud

Federal authorities arrested a Downingtown man accused of defrauding more than 200 investors of more than $2 million. The U.S. Attorney's Office in Philadelphia said that Istvan Merchenthaler, who goes by "Steve," claimed to be the founder of PhoneCard USA, which he touted as a "premier distribution source" for prepaid phone cards and cell phones. Rather than using investments to build the business, Merchenthaler, 42, allegedly used investor money to perpetuate the scheme by providing payments on behalf of some investors and for his own purposes, such as buying cars. Merchenthaler was charged with four counts of wire fraud, one count of aggravated identity theft, and two counts of money laundering, the U.S. Attorney's office said. Merchenthaler's bail hearing was set for Wednesday. — Harold Brubaker

PHH to service HSBC Bank mortgages

PHH Mortgage Corp., Mount Laurel, said it will provide end-to-end mortgage origination and loan servicing to HSBC Bank USA. As part of the deal, PHH is expected to take on about 400 HSBC employees who work at a mortgage operation in a suburb of Buffalo, N.Y. The loan-servicing component covers HSBC's portfolio of $15.5 billion of prime mortgage loans and $36.6 billion of loans that HSBC services for third-party investors. — Harold Brubaker

US Airways adds to Texas flights

US Airways Group Inc. will begin new, nonstop daily service between Philadelphia and Austin and San Antonio, Texas, starting Sept. 5. A sixth daily nonstop flight between Philadelphia and Dallas-Fort Worth also will begin Sept. 5. The flights aim to give customers "more access" to top business destinations, Philadelphia's largest airline, which transports nearly 70 percent of air travelers here, said. The new flights from Texas will arrive in Philadelphia during the noon hour and will leave Philadelphia in the afternoon and early evening for return trips to the Lone Star cities. — Linda Loyd

Early-stage companies funded

Ben Franklin Technology Partners of Southeastern Pennsylvania said it approved $675,000 in funding for six early-stage companies. The companies and investment amounts are: Cross X Platform L.L.C., of Audubon, Montgomery County, $100,000; GroupAppz Inc., of Fort Washington, $150,000; PeopleLinx L.L.C., $150,000; SnipSnap App L.L.C., Philadelphia; $50,000; Syandus Inc., of Exton, $25,000 (Ben Franklin previously invested $150,000) and Zonoff Inc., Malvern, $200,000. — Inquirer staff

Penn National buys Mo. casino

Gambling and racing operator Penn National Gaming Inc., of Wyomissing, said it agreed to acquire the stock of Harrah's St. Louis gaming and lodging facility from Ceasars Entertainment in a deal it valued at $610 million. The companies expect to close the transaction in the second half of 2012. Penn National said it will rebrand the Missouri facility with Penn National's 1930s style Hollywood brand. — Reid Kanaley


Exxon tops revenue list

Exxon Mobil Corp. has bumped Wal-Mart from first place among the Fortune 500 top revenue-generating U.S. companies thanks to rising oil prices. Fortune Magazine released its annual list. Oil producers saw some of the biggest revenue increases as a rebellion in Libya and high demand worldwide pushed oil prices higher. The price of benchmark West Texas Intermediate crude oil soared 19 percent. Brent crude, which helps set the price of foreign oil varieties, surged 38 percent between 2010 and 2011. Revenue rose for Exxon Mobil even though the company struggled with lower production and high refining costs. It earned $41 billion last year on revenue of $486 billion. — AP

Virginia loses wind-turbine prototype

Global wind giant Gamesa said it will build a wind turbine prototype in the Spanish Canary Islands instead of Virginia, citing the sluggish pace of U.S. development of offshore winds. The Spanish company won Virginia regulatory approval in March to construct the 479-foot, 5-megawatt wind turbine prototype off the Eastern Shore. In a statement posted on the company's website, however, Gamesa said it has chosen the Canary Islands south of Spain and off northwest Africa for the prototype. While still committed to developing a U.S. market, a Gamesa spokeswoman said the slow pace of regulatory actions, uncertainty over the future of tax credits for offshore development and the lack of a federal energy policy all conspired against investment in the prototype. — AP

'Pink slime' plants closing

A South Dakota beef company says it plans to close processing plants in three states because of the controversy surrounding a product that critics have dubbed "pink slime." Beef Products Inc. spokesman Rich Jochum said 650 jobs will be lost May 25 when it closes its plants in Amarillo, Texas; Garden City, Kansas; and Waterloo, Iowa. A plant in South Sioux City, Neb., will remain open. The company blames what it calls unfounded attacks over a product that it calls "lean, finely textured beef." In the process, bits of beef are heated and treated with a small amount of ammonia. — AP

Shutterfly takes over Kodak Gallery

Eastman Kodak Co. will close its online photo service on July 2. A federal bankruptcy judge approved selling the business to Shutterfly for $23.8 million. Shutterfly Inc. emerged last month as the sole bidder for Kodak's Kodak Gallery. Kodak says people who do not want their photos transferred will have to inform Kodak by May 28 by visiting its website and choosing to "opt out" of the migration. After July 2, customers won't have access to any photos on Kodak Gallery. They will appear on Shutterfly instead. — AP

AT&T breaking into home security

AT&T Inc. will start selling home automation and security services nationwide, taking on incumbents led by Tyco International Ltd.'s ADT. The installations and services will be sold in AT&T stores, starting with a trial this summer in Dallas and Atlanta. — AP