The fine line between legitimate businesses and pyramid schemes









Controversy is again casting a shadow over the multilevel marketing industry, as nutritional supplement company Herbalife Inc., which has thousands of distributors in the Chicago region, has been publicly called a pyramid scheme by a prominent investor — an allegation the company vigorously denies.


Meanwhile, a different multilevel marketer, Fortune Hi-Tech Marketing, was shut down in recent weeks after a lawsuit was brought by regulators and several states, including Illinois, alleging the company scammed consumers out of $169 million. The scheme affected an estimated 100,000 Americans, including some in Chicago, where it targeted Spanish-speaking consumers, the Federal Trade Commission alleged.


Most people outside the industry might have only a vague notion about multilevel marketing, also called network marketing and direct selling. It often involves personal sales of cosmetics, wellness products or home decor items — or as critics flippantly call it, "pills, potions and lotions" — usually sold through product parties hosted by friends or relatives.





For sellers, the companies offer the appeal of starting a business on the cheap with little training, working from home and being their own boss, if only for part-time money. Some might recruit friends and family to become sellers, which augments their own commissions and gives them a shot at the six-figure compensation many such marketing companies tout but few distributors attain.


The largest multilevel marketing companies, often known as MLMs, are household names: Avon, Mary Kay, Pampered Chef and Amway. MLMs have annual sales of about $30 billion, with about 16 million people in the United States selling their products, according to the industry group Direct Selling Association, which represents these firms and others.


The recent controversies might raise the question: What's the difference between a legitimate multilevel marketing company and an illegal pyramid scheme, in which only people who get in first — at the top of the pyramid-like structure — make money and everyone else is a dupe?


The harshest critics maintain there is no difference, that there's no such thing as a legitimate MLM and that the industry's secrets stay safe because of a cultlike mentality and a blind eye of regulators.


Jon M. Taylor, who was once a seller for an MLM company, said he has studied the industry for 18 years and analyzed more than 500 MLM companies. He maintains the website MLM-thetruth.com and offers a free e-book there.


"I have not yet found a good MLM — a good MLM is an oxymoron," Taylor said.


He said all MLM companies have the same flaw: They depend on endless chains of recruiting new members.  "There is no more unfair and deceptive practice than multilevel marketing," Taylor said.


Tracy Coenen, a forensic accountant and fraud investigator with Sequence Inc. in Chicago and Milwaukee, is author of the Fraud Files Blog. She is also a critic.


"Multilevel marketing companies are pyramid schemes that the government allows to operate," said Coenen. "The only difference is that Herbalife, or any multilevel marketing company, has a tangible product that they use to make their pyramid appear legitimate."


The Direct Selling Association says MLMs are legitimate businesses, and that the group has about 200 members carefully screened by the organization to ensure they are not pyramid schemes and don't use deceptive practices.


The Federal Trade Commission agrees there are legitimate MLMs. The difference between a legitimate business and pyramid scheme comes down to products.


If the company and its distributors make money primarily from the sale of products to end-users (and not boxes of product accumulating in a distributor's garage), it's OK.


By contrast, a pyramid scheme compensates those at the top of the pyramid with participation fees paid by those recruited at the bottom. It eventually collapses when the scheme can't recruit more people.


But identifying a pyramid scheme can be difficult because MLMs typically have product sales, along with recruitment fees and recruitment incentives.


"It gets cloudy when you have a situation where you have fees being paid for both," said Monica Vaca, assistant director of the FTC's division of marketing practices. "It's very nuanced."


While prosecuting an MLM can seem somewhat of a judgment call, cases have a common factor: deceptive promises about how much money distributors will earn, Vaca said.


In the Fortune Hi-Tech Marketing case filed last month, C. Steven Baker, director of the FTC's Midwest region, said, "These defendants were promising people that if they worked hard they could make lots of money. But it was a rigged game, and the vast majority of people lost money."





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Hadiya Pendleton funeral: 'God is our refuge'









The funeral of slain teen Hadiya Pendleton began today amid large crowds, long lines and heavy security prompted by the attendance of first lady Michelle Obama.

While family and friends kept the focus on the 15-year-old girl who was shot dead in a South Side park, the first lady's appearance inevitably brought attention to anti-gun efforts nationwide.


Hadiya's pastor, Courtney C. Maxwell from the Greater Deliverance Temple Church of Christ, opened the services about 11:15 a.m. after a heart-shaped balloon was placed near her casket.
 
He thanked everyone for being at the Greater Harvest Baptist Church, including elected officials. “The family says thank you and God bless you.’’ He asked for round of applause for the Pendleton family.
 
“Only God can keep you and strengthen you, for God is our refuge and our strength,’’ the pastor said. 


The pastor said Hadiya was “genuine and real.’’

“She was energetic, loved music, loved the arts,’’ the pastor said.

After the pastor spoke, a female reverend dressed in white addressed the crowd and a choir behind her began singing.

“Blessed are they that mourn, for they shall be comforted,’’ she said, as the choir sang after her.

Another man, who identified himself as an assistant pastor of the Life Center church, read from scriptures.

“She is more precious than rubies. … Her ways are of pleasantness,’’ he said.








About 11:30 a.m., Pastor Elder Eric Thomas of the host Greater Harvest Baptist Church spoke to the mourners and described Hadiya as a “beloved angel.’’
 
“Her life has not been in vain,’’ Thomas said.
 
A female singer and organist the played a religious song, as about 30 others in the choir, all dress in white, stood and swayed gently from side to side before the large cross that was draped in white.


Kenya Edwards, who identified herself as a radio personality and a friend, read a poem called “Walking,’’ which was written for Hadiya by Zora Howard.

Afterwards, Edwards said: “Ladies and gentlemen, it’s time for us to start walking. It’s time to take a stand.’’

Then two girls who appeared to be Hadiya's classmates and friends performed a poem they wrote for her, which began by comparing violence in Chicago to that of Iraq.
 
The girls then took turns to speak each part of the poem: “Dear Hadiya. I wish you were still here with me. That smile … that you smile so confidentially.’’

They also spoke to the killer: “Know that you killed an innocent person."

It ended when they both said: “We’re sorry Hadiya. We miss you,’’ and sat down to applause.


A woman then spoke on behalf of Barbara Bird Bennett, Chicago Public Schools CEO who was kept form the service due to a family emergency.
 
She described Hadiya as a strong, talented and ambitious young woman, whose memory would live on.

“Hadiya was a terrific student. She cared about her community,’’ she said.

“My heart gets broken’’ everytime another student is killed, she said, calling them “our precious children. I refuse to tolerate the violence that plagues our communities and has taken away the lives of too many children."

“I know there’s nothing I can say that can ease the pain of [Hadiya's parents] Cleopatra and Nathaniel,’’ but “I will be inspired by Hadiya every day … as I walk through the halls,’’ she said.


A woman who identified herself as Hadiya’s aunt then spoke, asking, “What was inside Hadiya that connected her to those who didn’t know her?”

“It was her inner light’’ that connected her with humanity’s inner light, she said. “Light has power and has potent force,’’ and can cause "mankind to feel an inner awakening and a sense of love.’’

“Light can pursue darkness ... it diffuses darkness,’’
her aunt said. "Hadiya. The light.’’

Father Michael Pfleger was introduced and called Hadiya an "innocent victim of gun violence,’’ asking,  “When did we lose our soul?”

He told crowd that “we must become like Jesus’’ and become “the interrupters’’ of genocide, and evil that is killing our children.
 
“Welcome home, sweet Hadiya. See you on the other side," he said.

Damon Stewart, Hadiya's godfather, then said, “I’m going to speak as if we’re family,’’ adding that he had “two spiritual thoughts’’ he wanted to stress.

“God makes no mistakes,’’ he said. “I don’t believe in coincidence; I believe in divine intervention.’’

Wearing a black suit and black shirt, he also wore purple in honor of Hadiya -- a purple tie and ribbon on his chest, and a purple handkerchief in chest pocket.
 
“I loved that child,’’ he said.

Hundreds of mourners had lined up early to pay respects to Hadiya, who was a majorette for King College Prep's band and performed during President Barack Obama's inauguration festivities just days before she was slain, shot in the back while hanging out with friends at a North Kenwood neighborhood park.

Thirty minutes before the doors were set to open, hundreds stood waiting in line amid heavy security to get into Greater Harvest Baptist Church in the Washington Park neighborhood, about two miles from where the 15-year-old girl was gunned down last month. Among the groups of high school-age students waiting in the line was the King College Prep majorettes team, who came together in their yellow and black majorette coats.

Guests who were invited by the family were given orange wristbands and were able to enter through a shorter security line. Classmates and friends of Pendleton were given green wristbands and allowed to enter through that same line.

Trinity Dishmon, 40, said her daughter Deja, 15, and Hadiya were close friends in middle school. The two girls stayed in touch and were texting about their upcoming 16th birthdays while Hadiya was in D.C. for the president's inauguration in January.

"Hadiya was a gift to everyone that knew her," Dishmon said, tearing up. "These last 12 days have been unbelievably numbing. It's not six degrees of separation anymore, it's one. It's just unreal."

Dishmon said she feared that the day was less about the teenager and more about a larger issue.

"This is Hadiya's day and should be about her -- not something sensational," Dishmon said. "But maybe by honoring her life we can help make a difference."

Inside the church, Hadiya’s silver casket was placed in the front, surrounded by flowers and two large hearts, one with her picture on it. Behind the casket, a TV screen showed pictures of Hadiya with her family, from birth to her teenage years.

At 9:09 a.m., friends, students and others with wristbands were allowed to file down the aisle to view the body. Her young friends were seated in the front pews, directly behind the casket. Her classmates and friends filled the middle section of the church — 11 rows in all. Members of the Crystal Elegance Majorette squad held on to each other as they filed down the aisle in pairs to view the body.

A funeral director wearing a suit and white gloves came outside at 9:40 a.m. to announce to the hundreds still waiting in line that the church was “at capacity.” Those still in line could come in and view the body, he said, but would have to leave before the services.

The funeral procession arrived at about 9:45 a.m., including three limousines and dozens of cars.

The first lady’s motorcade pulled into the church parking lot at about 10:15 a.m. She went in through a separate side entrance at the rear of the church, stepping directly from a vehicle into the building.

At about the same time, the funeral director came back out and announced to the hundreds still waiting in line that no one else would be allowed inside — not for the viewing or the funeral.


The family filed down the aisle a little after 10 a.m. and viewed the body in the still open casket. The pastor led the procession down the aisle chanting "the Lord is my shepherd" as soft organ music played in the background.

Ushers walked down the aisle handing out tissues, and those without wristbands were asked to give up their seats so that family members could be seated in the sanctuary. Every seat was filled by 9:45 a.m.

Purple, Hadiya’s favorite color, is represented in many of the flowers in the church and the lining of her casket. Ushers handed out a glossy funeral program booklet printed on purple paper. The front cover says "Celebrating The Life Of ... Hadiya Zaymara Pendleton.” Inside are more than 50 photos of Hadiya throughout her life.
 
Her obituary printed in the booklet describes her work in the church and even her favorite foods: Chinese, cheeseburgers, ice cream and Fig Newtons. It includes tributes from her grandmother, her cousin and an aunt as well as close friends. According to the program, the speakers are to include Illinois Secretary of State Jesse White.
 
The back of the program has a copy of a handwritten note from President Barack Obama: "Dear Cleopatra and Nathaniel, Michelle and I just wanted you to know how heartbroken we are to have heard about Hadiya's passing. We know that no words from us can soothe the pain, but rest assured that we are praying for you, and that we will continue to work as hard as we can to end this senseless violence. God Bless.”

Gov. Pat Quinn entered from the upstairs balcony, went up to greet the family and then stood for a brief moment over the casket, looking at Hadiyah.

Other dignitaries entering the church were Ill. Attorney General Lisa Madigan and Rev. Michael Pfleger, a longtime community activist on the South Side and pastor of St. Sabina Catholic Church in Chicago. Rev. Jesse Jackson stood at the front near the casket with members of the family for a while and then took a seat in the audience behind the family. 


Prior to the service, the first lady met privately with about 30 of Hadiya's friends and classmates, and then with members of Hadiya's family, according to a White House official.


Just before the funeral began, the first lady, Mayor Rahm Emanuel and Cook County Board President Toni Preckwinkle could be seen seated near one another other and near the casket. Colorful bouquets of flowers were placed near the casket.

Michelle Obama, wearing dark blue, was then seen standing, comforting someone, possibly the pastor.


Even after those outside were told they would not be allowed in, many continued to gather around the church's front gate.

Some began to file out, having to hop over the metal barricades to exit the long line.

One man asked the funeral staff member if he could at least have a pamphlet from the funeral before he left.

"Oh sir, those are long gone. They only printed 1,500," the funeral staff member said.

Activists, religious groups and others passed out printed material to those standing in line. Some kept the papers, others were left on the snowy ground as the crowds left.

Michelle Obama's attendance puts Chicago solidly in the middle of a national debate over gun violence that has polarized Congress and forced President Obama to take his gun control initiatives on the road to garner more public support.

The first lady's visit is being seen not only as a gesture of condolence to the family but as part of an effort to draw attention and support for the president's gun initiatives.

But the visit also meant scores of security, police and Secret Service agents, metal detectors and other security measures.

Other dignitaries expected to attend the funeral included Secretary of Education Arne Duncan and Valerie Jarrett, senior adviser to Barack Obama.

The church is surrounded by an iron fence and all of the openings -- a pedestrian gate in the front, front and side doors to the church, and a driveway to the north -- are guarded by city police or men in white shirts, ties and long black coats. Chicago police vehicles -- two wagons, a handful of squads and SUVs -- guarded the outside of the church while other vehicles circle the block.

Chicago police staffing the event are wearing dress blues -- a blue overcoat with pockets that allow access to the duty belt, creased navy pants, and a hat.

King College Prep math and engineering teacher Alonzo Hoskins stood quietly in line with others. He said he taught Hadiya in his first-period geometry class, where he now has an empty desk.

"She was full of life," Hoskins said.

Hoskins looked at the sea of people that preceded him in line. "I want to support the family. For me, this isn't about the dignitaries," Hoskins said.

"But I don't know if I'll even get in."

Some waiting in line for the funeral said they didn't know the Pendletons personally but felt some connection to the teenager's death.

Earl Worthington, 51, said his mother was an elementary school teacher in Chicago and would have embraced a driven young student like Hadiya.

“She's the type of girl my mother would have produced in her class,” Worthington said. “I feel a connection to Hadiya's death through my mother. I feel my mother is with her right now in heaven.”

Nate Weathers, 16,  Jeramy Brown, 16, and Antoine Fuller, 15, all stood in line to see their former classmate. The three young men said they attended Carter G. Woodson Middle School with Hadiya.

“This tears me up,” Fuller said. “She was my 7th grade crush.”

Brown described Hadiya as “sweet and innocent.”

“Something like this should have never happened to her,” Brown said.

Police took two men into custody after they got into an altercation near the back of the long line of mourners waiting to get into the church. One man was agitated, complaining about the long wait to get in. A second man confronted him and they began shoving each other before police intervened.


Local and national pool reports contributed.

chicagobreaking@tribune.com


Twitter: @chicagobreaking 



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Rosenthal: Chevrolet restores style to Impala name








Because a brand embedded in our subconsciousness can find a space in our garage, the Impala endures.


About 16 million Chevys named for an African antelope have hit the road since 1958. And even though the one you recently returned to the airport rental lot bore little resemblance the one whose "giddy-up" the Beach Boys sang of a half-century ago, General Motors is betting the bloodline still can claim hearts.


A revamped 10th-generation 2014 model is now on display at the just-opened 105th Chicago Auto Show as a prelude to its dealership debut in a few weeks, a bid to re-establish its good name.






"It's always been a great brand name," Russ Clark, director of Chevrolet marketing, said alongside one of the made-over Impalas on the Auto Show floor at McCormick Place. "In fact, when we did research on the name, we found Impala is one of the strongest in terms of consideration and favorable opinion of any name in the industry. A lot of that is heritage. A lot of it is the fact that people say, 'I know people who have had them, and everybody loved them.'"


The brand has been ubiquitous for decades, even if you don't remember the Beach Boys immortalizing the vintage growl of a "four-speed dual-quad Posi-Traction 409" or how Robert Blake's 1970s TV tough guy Baretta drove a rusted-out Impala from '66, the era when Chevrolet could move about 1 million Impala sedans and station wagons a year. My own first car was a four-door V-8 '72 Impala, a powerful and roomy hand-me-down whose weather-beaten body — like the brand's identity — clearly had seen better days by the late '70s and early '80s.


More recent Impalas have hardly been the stuff of song, and it's hard to imagine them inspiring nostalgia. They've been too dully utilitarian to be iconic.


Nonetheless, although sales have slowed, it has been the overall best-seller among big sedans. Three-quarters of those sales have been as fleet vehicles for corporate salespeople, government agencies and rental companies. That means the premium has been on space, reliability and keeping costs down rather than the kind of panache and extras that might foster pride of ownership.


The goal of this Impala overhaul in both four- and six-cylinder iterations — drafting on similar nameplate revivals for models such as Ford's Taurus, Dodge's Charger and Chrysler's 300 — is to flip that 75-25 ratio of fleet sales to retail on its head.


"It makes perfectly good sense on General Motors' part to finally put some style back in the Impala," auto industry analyst Art Spinella, president of CNW Research, explained. "If you have a great brand name, to almost toss it off, treat it as an orphan and send it off to the fleet sales department with bland styling and cheap interiors, that's a disgrace. What they've done is kind of salvage themselves with this.


"It's finally dawned on General Motors that you can sell a consumer car to fleets, but you can't sell a fleet car to consumers. You always keep fleet cars (looking) relatively obscure and you keep the price way down, and that's what General Motors had been doing for years to keep the (Impala sales) volume up. Now they're taking another look. I don't think they've necessarily gone far enough, but it's a step in the right direction."


To wander through the vast Auto Show, which runs through Feb. 18, is to be reminded of how deeply many of us connect to vehicles, starting as children playing with toy trucks and cars. There's a teenage rite of passage when car keys and a license expand the world. Certain makes and models mesh with what played on their radios, the places traveled in them, the stage of life they marked.


That emotional bond doesn't form so easily with a mere box with wheels.


"What was it that made us fall in love with cars in the first place?" Henrik Fisker, executive chairman and co-founder of high-end hybrid carmaker Fisker Automotive, asked the crowd at Thursday's Economic Club of Chicago luncheon. "It struck me that most of us, when we really start to get our heart pumping about cars, it's usually not the cars of today. It's usually the cars of the '50s and '60s."


Road salt, slush and rain were my old '72 Impala's kryptonite. In time, its front bench seat reclined like a La-Z-Boy whenever I hit the gas because the floor beneath had rusted through. Whatever my affection for the vehicle, I could see the road we were on — literally and figuratively — both looking ahead and glancing down.


Thirty years after I traded it in for a sporty red Pontiac with seats that reclined only how and when I wanted, I would not have expected my old flame to generate much heat.


Carmakers, like most marketers, know that even when a brand is disconnected from what it once represented, it still can resonate. The new Impala is neither the muscular car of old nor the generic conveyance of late. Yet Impala means something to would-be buyers, and good or bad, it gives them something to measure this latest version against.


"They have equity in the name and you never get rid of a brand that has a good reputation," Spinella said. "Some people will buy it because it's an Impala. Some people won't. But they'll look at it because it's an Impala and they remember the Impala. It's easier to reintroduce a name than to introduce a name nobody knows."


I can still remember driving around with my friends with no particular place to go, a song on the radio about a horse with no name. If there was a tune about a nameless car, I don't recall it.


philrosenthal@tribune.com


Twitter @phil_rosenthal






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Blizzard begins to slam Northeast









A blizzard blew into the northeastern United States on Friday, cutting short the workweek for millions who feared being stranded as state officials ordered roads closed ahead of what forecasters said could be record-setting snowfall.

Authorities scrambled to prepare for the storm, which had already resulted in a massive traffic pile-up in southern Maine and prompted organizers of the nation's sledding championship in Maine to postpone a race scheduled for Saturday, fearing too much snow for the competition.






From New York to Maine, the storm began gently, dropping a light dusting of snow, but officials urged residents to stay home, rather than risk getting stuck in deep drifts when the storm kicks up later Friday afternoon.

Even in its early stages, the storm created some panic. Drivers lined up at gas stations to top off their tanks, grocery stores were swamped as shoppers stocked up on bread and milk, and travelers were forced to confront flight delays and cancellations.

With the worst of the storm yet to come, the governors of Massachusetts, Rhode Island and Connecticut declared states of emergency and issued bans on driving by early Friday afternoon.

“The rate of snowfall and reduced visibility during the evening rush hour in particular will make safe travel nearly impossible,” Massachusetts Governor Deval Patrick told reporters.

The early edge of the storm led to a 19-vehicle pile-up in southern Maine, snarling traffic on a major interstate highway north of Portland. No major injuries were reported. A smaller accident briefly closed an interstate near Bolton, Vermont.

“It was close to whiteout conditions, it's sort of a precursor of what's coming later,” said Stephen McCausland, a spokesman for the Maine State Police.

Officials across the region closed schools and more than 3,000 flights were canceled. Several thousand customers lost power in New Jersey and points south, though officials warned the number was likely to rise as the snowfall got heavier and winds picked up.

Governors and mayors ordered nonessential government workers to stay home, urged private employers to do the same, told people to prepare for power outages and encouraged them to check on elderly or disabled neighbors.

The light snow falling across much of New England on Friday morning was a taste of the weather to come, said Jerry Paul, senior meteorologist with Weather Insight, a unit of Thomson Reuters.

“That's going to be gradually building today as time goes on,” Paul said.

A wide swath of New England, including northeastern Connecticut, Providence, Rhode Island, and the Boston area, will likely see 24 inches to 30 inches (60 centimeters to 76 centimeters) of snow, with some areas seeing more than three feet (one meter) by the time the storm ends on Saturday morning, Paul added.

At the storm's peak, winds could gust up to 65 miles per hour (105 kilometers per hour), he said.

Boston's record snowfall, 27.6 inches (70.1 cm), came in 2003.

CHEERING ON STORM

Organizers of the country's championship sledding race, that had been scheduled to get underway in Camden, Maine, on Saturday, postponed the event by one day.

“As soon as the weather clears on Saturday and it is safe, the toboggan committee will be out at Tobagganville cleaning up the chute as quickly as they can,” said Holly Edwards, chairman of the U.S. National Toboggan Championships. “It needs to be shoveled out by hand.”

Some 400 teams were registered for the race, which features costumed sledders on a 400-foot (121 meter) chute.

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McDonald's January sales down 1.9%









McDonald's January comparable sales fell 1.9 percent, due to weakness in the Europe and Asia, the company said Friday. 

The Oak Brook-based burger giant warned during its fourth-quarter earnings release that sales at restaurants open more than one year would be down. But analysts polled by Consensus Metrix had expected a decline of 1.1 percent.

Shares rose nearly 1 percent in morning trading, to $95.38.

Of greatest concern to Wall Street, same store sales in Europe declined to 2.1 percent. The company cited particular weakness in Germany and France despite solid growth in the U.K and Russia. Europe is the chain's largest market.

Comparable sales fell 9.5 percent in McDonald's Asia Pacific Middle East and Africa division, for which the chain cited weakness in Japan, and declines in China, attributable to a calendar shift in the Chinese New Year, and the ongoing fallout from a poultry crisis.

In the U.S., comparable sales rose 0.9 percent. McDonald's cited popularity of its core menu and moving the grilled onion and cheddar burger onto the Dollar Menu.

Total sales rose in January 0.3 percent, or 0.7 percent adjusted for the impact of currency.

While McDonald's expects sales to improve later this year, the worst isn't over. The company said it expects a 3 percent hit to February sales as a result of a shorter month in 2013.

"While January's results reflect today's challenging environment and difficult prior year comparisons, I am confident that our unwavering commitment to delivering an exceptional restaurant experience will enhance our brand's relevance and drive long-term results," McDonald's CEO Don Thompson said in a statement.

In a Friday research note, Janney analyst David Tarantino wrote that McDonald’s performance in the U.S. was ahead of expectations and the broader quick-service restaurant industry.


Though he expects comparable sales to be down through March, "we remain optimistic that planned initiatives can support better operating momentum after the first quarter," he said.


eyork@tribune.com | Twitter: @emilyyork

Reuters contributed to this report.

MCD Chart

MCD data by YCharts





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Freezing rain, then snow


























































A freezing rain advisory had barely expired when the National Weather issued a winter storm advisory with up to 4 inches of snow expected to fall this afternoon and night.

Rain is expected to change over to snow by the middle of the afternoon "in time for the evening rush," the weather service said in the advisory.






"The threat for a period of heavy snow could result in reduced visibilities under a mile at times and rapid accumulation on area roads during the evening commute," the weather service warned.

The most snow is expected to fall north of I-88 and the North Side of Chicago, it said.

The morning commute was slickened by sleet and freezing rain across northeast Illinois, mainly along I-88 and north of the expressway, according to the weather service.

chicagobreaking@tribune.com
Twitter: @chicagobreaking







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EveryBlock shuts down









Hyper local news and social media site EveryBlock.com has shut down, the company said Thursday.

"Though EveryBlock has been able to build an engaged community over the years, we're faced with the decision to wrap things up," a item on the EveryBlock.com blog said.

 The posting said Everyblock faced increasing challenges to build a profitable business. It had 10 employees.

The company was founded in 2007 by Naperville native Adrian Holovaty and acquired by MSNBC.com in 2009. NBC News acquired msnbc.com last year.

NBC News Chief Digital Officer Vivian Schiller said EveryBlock's financial losses "were considerable," although she declined to offer specific financial results.

"Hyper local is a very tough business. This isn't about anything being a failure, but more about our need to stay focused on the strengths of NBC News' digital portfolio," she added in an email.

Schiller said the company looked for various options for EveryBlock, such as a sale, but none of the options ended up being viable.

Hyperlocal sites in general have surged in popularity in recent years, but with the success came an explosion of competitors, making generating revenue extremely difficult.

"EveryBlock was among the more innovative and ambitious journalism projects at a time when journalism desperately needed innovation and ambition. RIP," Holovaty wrote Thursday in a blog post on his site Holovaty.com.

Holovaty wrote that he believes EveryBlock, founded with the help of a $1.1 million grant from the John S. and James L. Knight Foundation, was a successful attempt to push innovation in newspapers and journalism.

"It was a great site, beautifully designed and lovingly crafted. It made a difference for people, particularly in Chicago," he wrote.

Holovaty left the site in August to pursue other interests.

-- Tribune reporter Samantha Bomkamp contributed. sbomkamp@tribune.com

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License number leads cops to salon robbery suspect









The Evanston man charged with robbing nearly a dozen hair salons in Chicago, Skokie, Morton Grove, Broadview and Niles was apprehended seven hours after the last reported robbery, when a witness provided a partial license plate to authorities, police said today.

Jason Logsdon, 41, of the 900 block of Chicago Avenue in Evanston, is charged with 11 counts of felony armed robbery, according to the Cook County state's attorney's office.

“Everyone had a common goal, to get an offender off the street that was terrorizing small business owners,” said Tom Byrne, chief of detectives for the Chicago Police Department, during the news conference in Skokie.

Logsdon was taken into custody Monday in Skokie, hours after a robbery on the North Side, authorities said. He is suspected of robbing hair salons that include one in Broadview; five in Chicago; one in Morton Grove; two in Niles; and two in Skokie, authorities said.

Skokie police found that they had stopped Logsdon for two minor traffic violations within the past year, before the string of robberies occurred.

The DuPage County State’s Attorney’s office is pursuing additional charges against Logsdon in connection for two robberies in Lombard, one in Glen Ellyn and one in Bensenville, officials said.

The Cook County charges were filed after witnesses viewed line-ups at the Skokie police station, authorities said. Officials declined to discuss the type of weapon used, but said that his motive at least initially was financial.

A pattern of robberies began emerging in late December, said Brian Baker, Skokie’s commander in charge of the investigative division.


The person who owned the car that Logsdon was driving had “no knowledge that these (robberies) were occurring,” Baker said.


Baker said that Logsdon was taken from the courthouse to a hospital but he did not know why.

Logsdon was arrested after a salon in the Wicker Park neighborhood was hit. A man stole about $250 in cash from a Great Clips salon in the 1200 block of a well-trafficked North Ashland Avenue around 10:45 a.m. Monday, police said.

The man took out a handgun before presenting a dark bag to three salon workers, which one of them filled with money, Chicago Police News Affairs Officer Daniel O'Brien said. Wearing a red and gray jacket, blue jeans and a hat and scarf, the man walked north on Ashland and hopped in a gray colored sedan, which left driving southbound, police said.

No one was injured, police said.

A witness from that robbery provided a license plate number that was one digit off, Baker said. Chicago police ran variations on the number until they found a vehicle with a similar make and model as reported by the witness. The person who owned the car that Logsdon was driving had “no knowledge that these (robberies) were occurring,” Baker said.

Last Tuesday, a man robbed a Great Clips salon in the 1000 block of West Webster Avenue in the Sheffield Neighbors neighborhood, according to police. The man was given cash and fled the store, police said. Police think the same man may have held up salons in the 1200 block of North Clybourn Avenue on Jan. 21 and salons in the 1200 and 1300 blocks of West Fullerton Avenue in December.

Other police agencies have warned that the same man may be responsible for robberies in Niles, Skokie, Morton Grove, Bensenville, Lombard, and Glen Ellyn.





chicagobreaking@tribune.com


Twitter: @ChicagoBreaking





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Chicago sees surge in foreclosure auctions









More than 35,000 homes and small multifamily buildings in the Chicago area completed the foreclosure process last year, the highest number since the housing crisis began, and the vast majority of them became bank-owned.


An increase in foreclosure auctions was expected since lenders shelved many foreclosure cases while state and federal authorities investigated allegations of faulty foreclosure processes. Still, the heightened level of auctions — 35,244 in 2012, compared with 20,281 in 2011 — along with an increase in initial foreclosure filings, shows the local housing market has a long road to recovery, according to the Woodstock Institute.


"There's going to be pain in the housing market in the short term," said Katie Buitrago, senior policy and communications associate at Woodstock. "There's still high levels of filings. Five years into it, there is still work to be done to help people save their homes."








The Chicago-based public policy and research group is expected to release its report on 2012 foreclosure activity Wednesday.


The year-end numbers show that, with few exceptions, all Chicago neighborhoods and suburban communities saw high double-digit percentage gains in auctions last year. Across the six-county area, 91.3 percent of the foreclosed properties were repossessed by lenders. At the same time, notices of initial default sent to homeowners, the first step in the foreclosure process, increased by 2.9 percent last year, to 66,783.


Real estate agents have worried for more than two years about a glut of foreclosed properties — a shadow inventory — that banks would list for sale en masse and cause home values to plunge. That largely has not happened, but the vast number of distressed properties in the market has kept a lid on local home values.


On Tuesday, for instance, Fannie Mae and Freddie Mac's websites listed 2,415 Cook County homes for sale that the two agencies had repossessed.


Chicago-area home prices, including distressed sales, fell 2.3 percent in December from a year ago, housing analytics firm CoreLogic said Tuesday. Illinois was one of only four states to see home-price depreciation.


The increase in auctions "is a mixed blessing," Buitrago said. "We've been having a lot of trouble in the region with vacant properties that have been languishing for years. The longer they're vacant, the more likely they are to be a destabilizing force in their communities."


Woodstock found that within the city of Chicago, there were 20 communities where more than 1 in 10 owner-occupied one- to four-unit residential buildings and condos went through foreclosure from 2008 to 2012. Five of those neighborhoods are included in the city's 18-month-old Micro-Market Recovery Program, a coordinated effort to stabilize neighborhoods and property values hit hard by foreclosures and vacant buildings.


Also designed to benefit hard-hit areas are the recent establishment of a Cook County Land Bank and legislation waiting for Gov. Pat Quinn's signature that will fast-track the foreclosure process for vacant, abandoned homes while providing financial resources to foreclosure prevention efforts.


mepodmolik@tribune.com


Twitter @mepodmolik





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Northwestern-Cubs deal: 5 Wrigley football games













NU-Cubs deal


NU athletic director Jim Phillips talks about a new partnership Tuesday with the Cubs at Wrigley Field.
(Abel Uribe/Tribune Photo / February 5, 2013)


























































The partnership between the Chicago Cubs and Northwestern was so logical, so low-stress, that Cubs exec Crane Kenney said it was completed “with a handshake and a thank-you.”
 
And yet the deal is the first of its kind, a union between a school and professional franchise that will benefit multiple NU teams while enriching the Cubs and its employees who seek graduate-level education.
 
While executives on both sides imagine the marketing and signage possibilities, Chicago-area football fans who enjoyed the 2010 Wrigley Field football game will get to witness five more, starting in 2014.
 
Those dates are all to be determined, given that Big Ten schedules need to be reworked because of the additions of Rutgers and Maryland. They could be played every year from 2014-2018 or it could be five games played over 7-8 seasons.
 
But NU fans won’t have to wait that long to see some purple at Wrigley Field. The Wildcats baseball team will host Michigan on the North Side on April 20.
 
NU baseball coach Paul Stevens said that after he told his players, “they were just elated. The energy, the attitude and the enthusiasm have never been like that in any single practice.”
 
Kelly Amonte Hiller will bring her women’s lacrosse team – winners of seven NCAA championships over the last eight seasons – to Wrigley for a 2014 spring game against Notre Dame.
 
Football games, though, will get the most attention.
 
“It’s really a cool deal,” coach Pat Fitzgerald said. “Once we got off the bus (in 2010) and came out of left field, it was ridiculous … I don’t think anyone has ever had a bad day at Wrigley Field.”
 
NU Athletic Director Jim Phillips called it “a marriage of brands … in the greatest sports city in the country.”
 
Phillips is tight with Cubs brass, including owner Tom Ricketts and Kenney.
 
But this was a complicated deal that took months to iron out.
 
“We do have something more,” Phillips said, “than a handshake.”
 
tgreenstein@tribune.com

Twitter @TeddyGreenstein







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