United States Attorney Jeffrey C. Sullivan announced today that the U.S. Attorney’s Office for the Western District of Washington has decided to close its two-year investigation of Costco Wholesale Corp.

The company had been investigated for improper accounting practices concerning the issuance of backdated stock options, according to a joint release from the U.S. Attorney and the state Department of Financial Institutions.

In closing the investigation, according to the release, the U.S. Attorney’s Office considered that executives who benefited from the backdated stock options voluntarily reimbursed the company, declined bonuses and chose to surrender certain stock option benefits.

Also, the company has committed to implement an enhanced ethics and compliance program. For a look at that program, click here.

The two year investigation determined that between 1996 and 2003, Costco issued stock options to employees of the company, including executive officers. Some of the stock options were made effective as of a date on which Costco’s stock price was lower than the price on the date when the options were actually granted, according to the release.

As a result, Costco failed to properly account for the stock options on its books and records, including on financial statements filed with the Securities and Exchange Commission. The filings failed to recognize the full expense to Costco associated with the issuance of these stock options.

“I am pleased that Costco will significantly enhance its compliance and ethics program to assure its shareholders, and the investing public, that similar accounting errors will not reoccur,” said U.S. Attorney Jeffrey C. Sullivan. “This investigation, and the remedial steps taken by Costco, should send a message to other companies that it is critical to implement and maintain a robust compliance program.”

In a statement released Thursday, Costco President and CEO Jim Sinegal said: “In the fall of 2006, we voluntarily brought to the attention of regulators issues concerning our option grants and took an accounting charge to correct for errors. We have cooperated with the ... investigation and have notified them of Costco’s commitment to enhancing its compliance program.”

Sinegal and Chief Financial Officer Richard Galanti voluntarily chose to forego bonuses and stock option related benefits totaling in excess of $1.2 million, according to the U.S. Attorney.

Costco’s promise to enhance its compliance and ethics program includes employing a Chief Compliance Officer.

The case was investigated by the FBI, the Internal Revenue Service Criminal Investigation and the Washington State Department of Financial Institutions.

Fifty-seven lots in a Lacey subdivision owned by Pierce County's largest homebuilder, Puyallup's Soundbuilt Homes Inc., are scheduled for foreclosure sale next month.

According to information from the Thurston County Auditor's Office, the lots in Horizon Point are set to go to auction on March 13, The Olympian reported.

The lots are mostly unoccupied, but two of them are the site of Soundbuilt model homes.

Soundbuilt President Garry Racca didn't return phone calls today.

Auditor's documents identified Seattle's HomeStreet Bank as the mortgage holder for the lots. That same paperwork lists the lots' value at more than $5 million.

The real estate agent for Soundbuilt's homes in the subdivision, Mark Kitabayashi, told the Olympia newspaper that Soundbuilt and the bank are negotiating over the lots and loan repayment schedules.

He speculated that the auction would not happen because the bank and the homebuilder will agree on new terms before the auction date.

Soundbuilt is Pierce County's largest homebuilder and the fourth largest in the Puget Sound area. In 2006, Soundbuilt constructed and sold more than 600 homes.

The collapse of the home building market nationwide has left many builders in precarious financial health.

In the past, Racca has said that Soundbuilt, while affected by the slowdown, will survive because the company has adjusted its business practices to cope with the smaller and slower market.

Scandinavia's SAS airline, hit by big recession-caused losses, is halting service between Sea-Tac Airport and Copenhagen later this year.

The airline, the first to offer service between Sea-Tac and Europe, has been flying the route for 42 years.

The airline notified travel agents earlier this week that it will halt its service, but hasn't yet set a date for the discontinuance. The airline has bookings on the route through September.

SAS executives early this week told financial analysts it will focus its service more tightly on serving Scandinavia and trim its overseas connections.

The airline is also ending service from Stockholm to Bangkok and between Copenhagen and New Dehli and Beijing.

Seattle is one of four destinations the airline serves in the United States. The others are Washington, D.C., New York and Chicago.

Traffic figures from Sea-Tac Airport show SAS's business here has dwindled in the last few months.

The airline in December 2008, for instance, carried 6,768 passengers from Sea-Tac to Copenhagen and back. That's 14.8 percent fewer than the 7,950 it carried in December 2007.

For all of 2008, the airline carried 136,968 on that route compared with 145,969 in 2007.

SAS has in recent years seen new competition from Europe from Lufthansa, which flies from Sea-Tac to Frankfurt, from Air France, which flies to Paris, and from Northwest Airlines, which flies from Sea-Tac to Amsterdam.

British Airways also provides non-stop service from Sea-Tac to London.

The Washington State Bar Association, American Bar Association Young Lawyers Division and the Federal Emergency Management Association have formed a partnership to assist low-income victims of recent storms in the state.

A toll-free legal aid line – the Disaster Legal Services Line, which allows callers to request the assistance of a lawyer – is now available toll-free at 866-519-7099, according to a release from the state bar group.

Lawyers willing to volunteer legal services for storm victims should also call the hotline.

WSBA staff will monitor the line daily, and a volunteer lawyer will contact the caller to gather more information and to match storm victims with volunteer attorneys. Eligibility for the program is limited to those victims who would otherwise be unable to afford the services of a lawyer.

In the aftermath of the December 2007 storms and floods, WSBA volunteer attorneys successfully assisted more than 100 individuals and families – primarily resolving renters' insurance matters and legal issues involving businesses destroyed in the storm, according to the release.

The types of legal assistance available include:

• Assistance with securing FEMA and other government benefits available to disaster victims;
• Assistance with life, medical, and property insurance claims;
• Help with home repair contracts and contractors;
• Replacement of wills and other important legal documents destroyed in the disaster;
• Assisting in consumer-protection matters, remedies, and procedures;
• Counseling on mortgage-foreclosure problems;
• Counseling on landlord/tenant problems;
• Help with home repair contracts and contractors;
• Preparing powers of attorney;
• Help with guardianship and other similar legal papers.

Pierce County continues to have the highest rate of foreclosures in the state when compared to other counties.

According to information released by RealtyTrac today, one in every 393 housing units was in some phase of foreclosure in January.

The California-based company tracks foreclosure-related filings including notices of default, notices of trustee sales and REO properties, which have been foreclosed on and are now owned by a bank. A housing unit includes houses, apartments and mobile homes.

The county foreclosure rate is higher than the national rate of one in every 466 housing units. The state averaged one in every 874 housing units in some state of foreclosure.

Pierce County counted a total of 800 homes in some state of foreclosure in January. That's an 18 percent increase from December and 55 percent increase from January 2008.