Small Florida bank is 8th U.S. failure this year

WASHINGTON (Reuters) - Bank regulators closed a small Florida-based bank on Friday, the eighth U.S. bank to fail this year under pressure from a weak economy and a credit crisis precipitated by falling home prices.

The Federal Deposit Insurance Corp said First Priority Bank had $259 million in assets and $227 million in deposits and its failure will cost the federal fund that insures deposits an estimated $72 million.

SunTrust Banks Inc (STI.N: Quote, Profile, Research, Stock Buzz) has agreed to assume the insured deposits of First Priority, whose six branches will reopen Monday as branches of SunTrust Bank.

Customers can access their money over the weekend by check, teller machine or debit card, the FDIC said.

It is the first bank to fail in Florida since Guaranty National Bank of Tallahassee failed in March 2004, according to the FDIC, which blamed the failure on exposure to the real estate market, predominantly in the construction lending area.

Florida is among several states whose housing markets have seen the sharpest declines.

The biggest bank failure by far this year is IndyMac (IDMC.PK: Quote, Profile, Research, Stock Buzz), seized on July 11 with $32 billion in assets and $19 billion in deposits as of March, and the third-largest bank insolvency in U.S. history.

The FDIC oversees an industry-funded reserve used to insure up to $100,000 per account and $250,000 per individual retirement account at insured banks.

The agency also has running tally of problem banks that its examiners closely monitor. At the end of first quarter, 90 institutions were on that list.

The FDIC does not name the institutions on the list, which is expected to be updated this month for the second quarter.

(Reporting by John Poirier; Editing by Tim Dobbyn)

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SunTrust Bank Acquires the Insured Deposits of First Priority Bank, Bradenton, Florida

First Priority Bank, Bradenton, Florida, was closed today by the Commissioner of the Florida Office of Financial Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with SunTrust Bank, Atlanta, Georgia, to assume the insured deposits of First Priority.

The six branches of First Priority will reopen on Monday as branches of SunTrust Bank. Depositors of the failed bank will automatically become depositors of SunTrust. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. For the time being, however, customers of both banks should use their existing branches until SunTrust can fully integrate the deposit records of First Priority.

Over the weekend, customers of First Priority can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of June 30 2008, First Priority had total assets of $259 million and total deposits of $227 million. At the time of closing, there were approximately $13 million in uninsured deposits held in approximately 840 accounts that potentially exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.

Customers with accounts in excess of $100,000 should contact the FDIC toll free at 1-800-837-0215 to set up an appointment to discuss their deposits. This phone number will be operational this evening until 9:00 p.m. EDT; on Saturday from 8:00 a.m. to 8:00 p.m. EDT; and on Sunday and thereafter from 8:00 a.m. to 6:00 p.m. EDT.

In addition to continued access to their insured deposits, depositors of First Priority with amounts exceeding the insurance limits will receive a payment of 50 percent of their uninsured balance from the FDIC as receiver. The FDIC will mail these payments directly to the customers early next week; the amounts will not appear in their account balances at SunTrust Bank.

Customers who would like more information on today's transaction should visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/firstprioritybank.html. Beginning Monday, depositors of First Priority with more than $100,000 at the bank may visit the FDIC's Web page, "Is My Account Fully Insured?" at http://www2.fdic.gov/dip/Index.asp to determine their insurance coverage

SunTrust agreed to assume the insured deposits for no premium. In addition to assuming the failed bank's insured deposits, SunTrust Bank will purchase approximately $42 million of the failed bank's assets. The assets are comprised mainly of cash, cash equivalents and securities. The FDIC, however, entered into a separate agreement with LNV Corporation, Plano, Texas, to purchase $14 million in First Priority's assets. LNV Corporation is a subsidiary of Beal Bank Nevada, Las Vegas, Nevada. The FDIC will retain the remaining assets for later disposition.

The cost to the FDIC's Deposit Insurance Fund is estimated to be $72 million. First Priority is the first bank to fail in Florida since Guaranty National Bank, Tallahassee, on March 12, 2004. This year, a total of eight FDIC-insured institutions have been closed.

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US Airways No Longer Serving Free Water

Charging for checked luggage and legroom isn't enough for some carriers -- starting today, coach passengers flying aboard US Airways Inc. must pay for a drink of water.

This morning, US Airways began charging fliers $2 for bottled water and sodas and $1 for teas and coffees. First class members, trans-Atlantic passengers and a select group of others are exempt from the extra fees.

Read the whole story here.

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Austria: Plutonium leak at IAEA contained

By THE ASSOCIATED PRESS

VIENNA, Austria (AP) -- The International Atomic Energy Agency said plutonium had leaked in one of its laboratories Sunday but no radiation escaped the building and no one was hurt.

The agency said in a statement the leak happened in the high security area of its nuclear lab in Seibersdorf, 35 kilometers (22 miles) south of Vienna.

''Pressure buildup in a small sealed sample bottle in a storage safe resulted in plutonium contamination of a storage room,'' the agency said. It said the incident occurred at about 0030GMT Sunday and no one was in the lab at the time.

The agency excluded the possibility that a person caused the incident, IAEA spokesman Ayhan Evrensel said.

The lab is equipped with multiple safety systems, including an air-filtering system to prevent the release of radioactivity into the environment, the IAEA said.

Access to the affected rooms will be restricted until they are decontaminated, according to the agency.

Daniel Kapp, a spokesman for Environment Minister Josef Proell, said no nuclear radiation was measured outside the lab.

The International Atomic Energy Agency is the U.N.'s nuclear watchdog, and the lab routinely analyzes small samples of nuclear material like uranium or plutonium as part of the agency's safeguards verification.

The lab was built in the 1970s and the agency considers it outdated. In November of last year, IAEA chief Mohamed El-Baradei asked the agency's member states to make euro27.2 million (US$39.5 million) available to modernize the lab.

IAEA spokesman Evrensel said Sunday's incident was a one-time event that had nothing to do with the lab being outdated.

''This could have happened in even the most up-to-date lab,'' Evrensel told The Associated Press.

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9 Climbers Die on K-2

GILGIT, Pakistan (Reuters) - At least nine climbers have perished on K-2 in Pakistan in the worst day for mountaineering on the world's second-highest peak, and the toll could rise further, expedition organizers said on Sunday.

Those confirmed dead included three South Koreans, two Nepalese, along with Serbian, Norwegian, Dutch and French climbers.

Unconfirmed reports said one Pakistani had died and several foreign and local climbers were unaccounted for.

Catastrophe struck on Friday, when a chunk of ice broke off from a serac, a pillar or cuboid of ice, and tore away fixed lines from a perilous steep gully known as the Bottleneck, above 8,200 meters (26,902 ft).

Several expeditions were on the mountain, including a Korean team that was making its descent after summiting the 8,611 meter peak, in northern Pakistan near the border with China.

The Korean team lost five members, including the two Nepalese, in the ice fall.

"They were returning from the summit when an avalanche at the Bottleneck hit them," Ghulam Mohammad, owner of Blue Sky Travels and Tours, told Reuters. "Our liaison officer at the Base Camp confirmed the death of five."

Three more fatalities were confirmed by Brigadier Mohammad Akram, vice president of Pakistan's Adventure Foundation.

"We don't have names of dead climbers but it has been confirmed that one Dutch, one Norwegian and one French are in the tally of dead," Akram said.

A Serbian climber, named as Dren Mandic on mountaineering websites, fell to his death while ascending earlier on Friday and a Pakistani sherpa was also believed to have died.

The previous deadliest day in the history of K-2, was on August 13, 1995, when six people fell or disappeared during a storm, including British female climber Alison Hargreaves.

The head of Italian mountaineering group Ev-K2-CNR, Agostino Da Polenza, told SkyItalia Television that based on information he given by an Italian climber another four people were missing.

DEATH ZONE

The ice fall had left around a dozen climbers stranded at the Bottleneck, at an altitude known as the "Death Zone" because bodies begin degenerating because of lack of oxygen.

A few were either seen or reported to have made their way back to camps, still high on the mountain. The seven surviving members of the Korean team had descended to camps lower down.

"We were told that some climbers are still returning to the camps," Major Farooq Firoz, an army spokesman, said.

The sky was clear and there were no forecasts of bad weather when the accident happened, said tour operator Asghar Ali, who reported all members of his expedition were accounted for.

A Dutch expedition said on its website, www.noritk2.nl, that three of its team were descending from Camp Three, at 7,350 meters. Two of them were suffering from frostbite.

But it said there was no information about a French climber Hugues d'Aubarede, Irish climber Gerard McDonnell, and a third climber identified as Karim.

A team of climbers had begun ascending to take supplies up the mountain, while helicopters were being organized to bring injured climbers down on Monday morning.

A spotter plane has been on stand-by, waiting for clouds to clear, before flying over the flanks of K-2 to look for those still missing.

More than 70 climbers have lost their lives on K-2, a good number of them at the Bottleneck.

A steep pyramid of rock and ice at the head of a glacial valley, the renowned Italian climber Reinhold Messner called K-2 "the mountain of mountains."

Though K-2 is not the deadliest in terms of number of fatalities, statistics show chances of dying making a descent after summiting are far greater than for other peaks.

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Greek man beheads girlfriend on Santorini island

ATHENS (Reuters) - A 31-year-old Greek beheaded his girlfriend and carried her head round the popular tourist island of Santorini before he was arrested, police said on Sunday.

The man, who police said had psychological problems, injured a police officer and two women while trying to escape arrest after killing the 25-year-old teacher in Greece's most picturesque island.

"He was walking around, carrying her head and telling the astonished villagers not to stop him," a police official told Reuters. "They knew he had psychological problems ... but they didn't expect he would reach this point."

The man knifed a policeman who tried to arrest him, stole a police car and crashed into a motorcycle injuring two women, before police ended his escape by ramming the car.

Tourism Minister Aris Spiliotopoulos vowed earlier this week to make Greek resorts safer after a spate of violent incidents at the peak of the tourist season.

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France's Wine Terrorists

By BRUCE CRUMLEY / PARIS

A commando vineyard owner empties one of 13 wine tanks filled with Chilian wine in Nimes, France.

Too much wine, it is known, can cause violent behavior. But few have gone as far as the grape growers of France's Languedoc-Rousillon region, the world's biggest wine growing area by volume. Hurting from over-production and cheap imports, and punished lately by the rising cost of gas, a small group of local wine growers has resorted to "wine terrorism" in a violent attempt to shock the French government into helping them.

On July 26, police arrested a vineyard farmer from the region for production and possession of illegal explosives. Apprehended in a hospital where he was being treated for injuries suffered when those explosives unexpectedly detonated, 34-year-old Jérôme Soulère confessed to police that he'd been responsible for the July 2006 bombing of a tax collection office in a neighboring village. He also admitted, police say, to authoring the failed bombing last year of a site the Tour de France was set to pass the following day.

Those incidents are just two of many in a series of violent and destructive acts by local grape growers over the past three years that has targeted public and private buildings, supermarkets, tanker trucks hauling cheap imported wine, and businesses accused of gouging growers with ever-shrinking prices. Claiming responsibility: a clandestine group known as the "CRAV", or "Regional Committe of Viticulture Action".

CRAV's commando operations began with the 2005 bombing of a state agricultural building. CRAV members, or independent sympathizers, have repeatedly carried out bombings or acts of vandalism since, including three acts of property destruction in a 10 day span in May this year alone. In mid-July, CRAV logos were discovered spray-painted at a Narbonne agriculture collective whose vandalized vats had drained nearly 132,000 gallons of wine on the ground — an estimated loss of around $450,000. Last year, it sent a video to newly-elected President Nicolas Sarkozy demanding assistance to the region's grape growers, or "blood will flow".

Quixotic as it may seem to outsiders, the group — and many Langeudoc-Rousillon growers who support its aims while condemning the violence used to achieve them — want the French government to protect them from a rapidly globalizing market. Foreign wine from cheaper producers such as Italy, Spain, Australia, the US, and South America — where costs can be one-fifth of those in France — has saturated the market, and driven down demand for locally-grown grapes. That has depressed the price Langeudoc-Rousillon growers get for their crops by up to 50% in recent years.

With revenues plummeting and production costs on the rise thanks in part to escalating gas prices, local farmers are demanding financial aid from Paris. But European Union rules limit how much help the French government can extend; Brussels has repeatedly urged growers to cut costs by letting nearly 500,000 acres of land lie fallow, and swap plonk production for more expensive, higher quality wine.

That doesn't impress locals. "Many of these vineyard owners are committed to production and investment plans spanning 20 or 30 years," says one member of the regional wine sector who asks not to be named due to "the vivid tension" the situation has created. "These aren't operations that can change strategy or cut production overnight."

Jérôme Soulère's lawyer, Jean-Marie Bourland, doesn't justify his client's avowed acts of destruction, but sympathizes with his client's predicament. "We're in a country where, alas, our leaders don't pay attention to well-behaved, and listen to those who leave them no choice," says Bourland. "Many of these people are agonizing and dying a slow death," he says. "For some, I suppose, posing a bomb is their attempt to pose a question."

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U.S. Economy: Jobless Rate Rises to Four-Year High (Update1)

By Shobhana Chandra

Aug. 1 (Bloomberg) -- The U.S. unemployment rate rose to the highest level in more than four years as employers cut jobs again in July, increasing the threat of a deeper economic slowdown.

Payrolls fell by 51,000, less than forecast, the Labor Department said today in Washington. The jobless rate rose to 5.7 percent, from 5.5 percent the prior month. As recently as April, it was 5 percent. A separate report showed that manufacturing stagnated in July as companies were hit by rising raw-materials costs and slower spending.

``This is further evidence the economy is in a recession, probably a shallow recession,'' said Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts, referring to rising joblessness. ``It will be a major drag on consumer spending.''

The last time unemployment climbed so much in three months was at the end of the last U.S. recession in 2001. Payroll cuts combined with decreasing property values, stricter lending rules and near-record energy prices to send consumer confidence levels close to the weakest in 16 years in July.

Cutbacks at UAL Corp. and Starbucks Corp. signal firings are spreading beyond builders and manufacturers as raw-materials costs soar. General Motors Corp., which today announced a second-quarter loss of $15.5 billion, may eliminate about 5,000 U.S. jobs by year-end, people familiar with the plan said this week.

Payroll declines spanned transportation, retailing, manufacturing and temporary services industries, the Labor figures showed.

Treasuries, Stocks

Stocks dropped and Treasuries were little changed. The Standard & Poor's 500 Stock Index fell 0.6 percent at 4:14 p.m. in New York, to 1,260.3. Yields on benchmark 10-year notes were at 3.93 percent from 3.95 percent late yesterday.

The Institute for Supply Management's factory index fell to 50, a higher reading than forecast, from 50.2 in June, the Tempe, Arizona-based group said today. A reading of 50 is the dividing line between expansion and contraction. The Commerce Department reported construction spending dropped 0.4 percent in June.

Today's unemployment figures reinforce the case for the Federal Reserve to hold off on any interest-rate increase until next year, economists said.

The Fed's ``hands are tied, there is nothing they can do with regard to this,'' said Kathleen Stephansen, director of global economics at Credit Suisse Holdings USA Inc. in New York in an interview with Bloomberg Radio.

Revisions added 26,000 to payroll figures previously reported for May and June. Economists had projected payrolls would drop by 75,000 after a 62,000 decline the prior month, according to the median of 80 forecasts in a Bloomberg News survey. The jobless rate was forecast to rise to 5.6 percent.

Losses So Far

The July cuts bring the total drop in payrolls so far this year to 463,000.

Democratic presidential candidate Barack Obama plans to announce today an emergency economic plan that would impose a windfall profit tax on oil companies to pay for rebate checks of $1,000 to families and $500 to individuals. He also backs a $50 billion stimulus package, including funds for bridge and road maintenance, intended to save 1 million jobs.

Senator John McCain, the Republican candidate, criticized Obama for advocating higher taxes. ``There is no surer way to force jobs overseas than to raise taxes,'' McCain said.

The National Bureau of Economic Research, the official arbiter of U.S. contractions, tracks payrolls, sales, incomes, production and gross domestic product in making the recession call. The group defines downturns as a ``significant'' decrease in activity over a sustained period of time, and usually takes six to 18 months to make a determination.

Recession Call

The economy shrank at the end of 2007 and grew less than forecast in this year's second quarter, figures from the Commerce Department showed yesterday. Some economists said this indicated the U.S. slipped into a recession late last year.

``The economy is limping along right around zero, slightly positive,'' said former St. Louis Fed President William Poole in a Bloomberg Television interview today.

Fed policy makers will probably keep their benchmark rate at 2 percent when they meet on Aug. 5, futures prices show.

More Americans filed initial claims for unemployment benefits last week than at any time in over five years, Labor reported yesterday. Consumer confidence surveys have indicated that Americans, growing more pessimistic about job prospects, may trim spending.

Starbucks Cuts

Starbucks, the world's largest chain of coffee shops, this week said it'll cut another 1,000 jobs as sales slump. The Seattle-based company on July 1 announced plans to eliminate as many as 12,000 positions worldwide.

Factory payrolls fell 35,000 after declining by the same amount in June. Economists had forecast a drop of 40,000. The decrease included a drop of 3,000 jobs in auto manufacturing and parts industries.

July announcements at airlines included 7,000 cuts at UAL's United Airlines, and 6,840 at American Airlines parent AMR Corp.

The protracted housing slump and resulting credit crisis were also reflected in today's jobs report. Construction payrolls declined 22,000, the smallest drop since October, after decreasing 49,000. Payrolls at financial firms were unchanged after declining 13,000 the prior month.

Services Jobs

Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 5,000 workers, the first decline since March. Retail payrolls decreased by 16,500 after a drop of 6,300.

Government jobs increased by 25,000, the 12th month of gains in public payrolls, after an increase of 43,000.

The average work week shrank to 33.6 hours from 33.7 hours. Average weekly hours worked by production workers were unchanged at 41, and overtime was also unchanged at 3.8 hours. That brought the average weekly earnings up by 22 cents to $606.82 in July.

Workers' average hourly wages rose 6 cents, or 0.3 percent, to $18.06, matching economists' forecasts.

Sealed Air Corp., the maker of Bubble Wrap packaging, said this week it plans to eliminate 900 to 1,000 jobs globally after second-quarter profit fell because of rising costs to make plastics.

``We certainly are facing a challenging environment in 2008,'' Chief Financial Officer David Kelsey said in a July 30 telephone interview.

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Md. mayor's dogs killed by SWAT after cops deliver pot

Welcome Digg readers! Want to learn more about this story? The Washington Post has an update here.

BERWYN HEIGHTS, Md. — A SWAT team raided the home of a Washington, D.C.-area mayor, killing his two black Labrador retrievers and seizing an unopened package of marijuana delivered there.

Prince George's County Police said Berwyn Heights Mayor Cheye Calvo brought a 32-pound package of marijuana into his home that had been delivered by officers posing as delivery men. The Tuesday evening raid was conducted by county police narcotics officers and a sheriff's office SWAT Team.

The package was addressed to Calvo's wife, Trinity Tomsic. His mother-in-law had asked the supposed delivery men to leave the package outside. Calvo has not been charged, though police said he, his wife and his mother-in-law are "persons of interest" in an ongoing investigation.

"We never opened the box. We have nothing to do with this box," Calvo said.

Sheriff's office spokesman Sgt. Mario Ellis says deputies "apparently felt threatened" when they shot the dogs.

Calvo said officers entered about 7:30 p.m., first shooting 7-year-old Payton. They then pursued 4-year-old Chase, who ran away and was shot by police from behind, he said.

Calvo said he doesn't have any idea how the package ended up at his house. He called the raid "the most traumatic experience" of his life.

Calvo, who called his town "Mayberry inside the Capital Beltway," gets a small stipend as mayor and works at the SEED Foundation, a nonprofit that runs public boarding schools for at-risk students. His wife works as a state finance officer.

"These were two beautiful black Labradors who were well-known in the community. We walked them twice a day; little kids knew their names and would come up to them and pet them," he said.

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NYPD calls on citizens for amateur video evidence

By Deborah Jian Lee

NEW YORK (Reuters) - New Yorkers can soon take a bite out of city crime by uploading video or photo evidence directly to the New York Police Department, in a move welcomed on Thursday by civil rights groups.

"We're putting that technology in place to enable us to do that," said Police Commissioner Ray Kelly, adding that the service will be available soon.

"It's a fact of life," Kelly said. "Everybody has a camera in their telephones. When people can record an event taking place that helps us during an investigation, it's helpful."

Soon citizen sleuths can transmit evidence of criminal activity directly to the police and 911, including evidence of police misconduct, such as the recent video of a police officer shoving a bicyclist to the ground in Times Square.

The video of the incident has received over one million views on YouTube and has generated online discussion about police brutality and abuse of power.

Donna Lieberman, executive director of the New York Civil Liberties Union said, "I think that while it's appropriate for the police department to invite video reports of wrong doing both by ordinary people and police officers, the New York Police Department has a long way to go to ensure that police officers who engage in wrongdoing like what was captured in the two video tapes that were recently disclosed are held accountable."

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Pictured: Brazilian lover who 'chopped up British girl like beef' grins as he takes police to find her mutilated remains

By Charlotte Gill and Dan Newling

The man accused of murdering and mutilating a British teenager in Brazil yesterday took police frogmen to a remote jungle river to try to find the girl's dismembered remains.

Mohammed Carvalho dos Santos, 20, spent four hours with police divers after he admitted killing 17-year-old Cara Burke, from south London, in a cocaine-fuelled rage.

He has told police he put the body parts in plastic bags and threw them in the river. He had put her torso in a suitcase which he left on the riverbank, and it was the discovery of the case which led to the murder probe and his arrest.

Grinning killer: Mohamed D'Ali Carvalho Santos, centre, leads police to the site where he allegedly dumped some body parts of British teenager Cara Marie Burke

But after the four-hour trawl yesterday, police admitted they had drawn a blank.
Earlier, dos Santos had smiled in silence with his head bowed as he left a police station in the central Brazilian city of Goiania for the river outside the town where he said he had dumped the girl's head, arms and legs.

He responded angrily to the media later while showing police around the river and the 40-yard-long bridge spanning it.

Asked where he was standing on the bridge when he threw bags of body parts over the side, Santos snarled at a reporter, 'I threw her in your house.'

Murdered: British teenager Marie Burke, 17, was reportedly stabbed to death before being decapitated

Firefighters joined police in combing the banks of the river for the missing remains, without success.

Detectives said they were now convinced that dos Santos, 20, carried out the horrific murder because Cara had refused to marry him so that he could gain entry to Britain.

They had earlier believed the motive may have been that Cara had planned to go to the police about his drug use and dealing.

Chief investigating officer Carlos Batista said: 'His friends and her friends have told us that he wanted her to marry him so that he could live permanently in the UK. He had already been there a couple of years and really liked it.

'She was not prepared to marry him and they argued a lot.'

Cara, whom friends described as 'very naive' and 'obsessed with Brazil', is believed to have met dos Santos in east London, where he was living illegally.

When he was thrown out of Britain earlier this year, he suggested Cara travel with him to Brazil, in the hope that the pair would get married and he could obtain British citizenship.

The couple spent three months living together in a flat in the central Brazilian city of Goiania before they fell out. Two weeks ago Cara moved in with a female friend in the city but returned to the flat last weekend.

Grieving: Cara's brother Michael and mother Anne (third left) leave the family home in London

Her boyfriend was born in Brazil, but police said his parents live in the UK, and that he had met Cara in Britain.

They say he quickly confessed to murdering her, and that he had taken pictures of her mutilated body on his mobile phone.

However last night he claimed that he did not kill Cara.

'I was in my apartment when something happened. She got killed there but I can't say what happened. It wasn't me' he said from his cell in a telephone interview with the Sun.

He told the newspaper that he was never romantically involved with Cara. He said she had flown out to be with another Brazilian who had paid for her ticket and was furious that she later ended their relationship.

'He said he was going to kill her because she spent so much on the ticket,' said Dos Santos.

'She moved in with me but she was never my boyfriend [sic]. We lived together for about two months and then she moved out because she had another boyfriend.'

Cara pictured with a young friend

Yesterday Mr Batista, chief of Goiania's murder division, said that dos Santos stabbed Cara 'several times in the chest and the back' last Saturday after taking a huge amount of crack cocaine.

Dos Santos said last night that he does not remember what happened the night Cara died because he was too high on cocaine.

He said: 'I don't remember much, I had used too much drugs.'

A screen projection of a photo of Cara and Dos Santos recovered by police from his mobile phone

After murdering her, dos Santos went out to get drunk at a party, then returned to his apartment and hacked off Cara's head, arms and legs.

He then stuffed the teenager's torso into a medium-sized black suitcase which he dumped in a river outside town. Police believe he had an accomplice named only as Jorge, who was last night being hunted.

He is thought to have helped in the disposal of the body parts, but not in the murder.

Rescue workers search for body parts in the river near where Cara's body was found

The suitcase was discovered last Monday and was identified by a tattoo reading 'Mum'. The rest of Cara's body - including her head - have still not been found.

Shockingly, dos Santos is said to have told detectives dismembering his girlfriend's body was ''just like cutting beef, but for the bleeding.'

When asked what motivated him to dismember the corpse, he said it was his desperation to remove the body from the apartment.

'The best method I could think of was putting her inside the suitcase.'

The 17-year-old's dismembered body was found in the Brazilian city of Goiania

And asked why he took a photograph of the body and the knife, he is reported to have said: 'I took them in order to send to a Brazilian in England, who she stole money from. He said he was going to kill her.

'I was going to send them by email to show him that although he didn't have the courage to do it, someone here did.'

According to the newspaper Hoje Noticia, as well as photographs of the remains, Santos' mobile phone contained pictures of Chucky, the killer doll from the Child's Play series of films.

Liverpool toddler James Bulger's 10-year-old killers, Robert Thompson and Jon Venables, were said to have been influenced by one of the films.

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Anthrax scientist commits suicide as FBI closes in

By LARA JAKES JORDAN and DAVID DISHNEAU

WASHINGTON -- A top U.S. biodefense researcher apparently committed suicide just as the Justice Department was about to file criminal charges against him in the anthrax mailings that traumatized the nation in the weeks following the Sept. 11, 2001, terrorist attacks, according to a published report.

The scientist, Bruce E. Ivins, 62, who worked for the past 18 years at the government's biodefense labs at Fort Detrick, Md., had been told about the impending prosecution, the Los Angeles Times reported for Friday editions. The laboratory has been at the center of the FBI's investigation of the anthrax attacks, which killed five people.

Ivins died Tuesday at Frederick Memorial Hospital in Maryland. The Times, quoting an unidentified colleague, said the scientist had taken a massive dose of a prescription Tylenol mixed with codeine.

Tom Ivins, a brother of the scientist, told The Associated Press that another of his brothers, Charles, told him Bruce had committed suicide.

A woman who answered the phone at Charles Ivins' home in Etowah, N.C., refused to wake him and declined to comment on his death. "This is a grieving time," she said.

A woman who answered the phone at Bruce Ivins' home in Frederick declined to comment.

Justice Department spokesman Peter Carr and FBI Assistant Director John Miller declined to comment on the report.

Henry S. Heine, a scientist who had worked with Ivins on inhalation anthrax research at Fort Detrick, said he and others on their team have testified before a federal grand jury in Washington that has been investigating the anthrax mailings for more than a year.

Heine declined to comment on Ivins' death.

Norman Covert, a retired Fort Detrick spokesman who served with Ivins on an animal-care and protocol committee, said Ivins was "a very intent guy" at their meetings.

Ivins was the co-author of numerous anthrax studies, including one on a treatment for inhalation anthrax published in the July 7 issue of the journal Antimicrobial Agents and Chemotherapy.

Just last month, the government exonerated another scientist at the Fort Detrick lab, Steven Hatfill, who had been identified by the FBI as a "person of interest" in the anthrax attacks. The government paid Hatfill $5.82 million to settle a lawsuit he filed against the Justice Department in which he claimed the department violated his privacy rights by speaking with reporters about the case.

The Times said federal investigators moved away from Hatfill and concluded Ivins was the culprit after FBI Director Robert Mueller changed leadership of the investigation in 2006. The new investigators instructed agents to re-examine leads and reconsider potential suspects. In the meantime, investigators made progress in analyzing anthrax powder recovered from letters addressed to two U.S. senators, according to the report.

Besides the five deaths, 17 people were sickened by anthrax that was mailed to lawmakers on Capitol Hill and members of the news media in New York and Florida just weeks after the Sept. 11 terrorist attacks. The victims included postal workers and others who came into contact with the anthrax.

In January 2002, the FBI doubled the reward for helping solve the case to $2.5 million, and by June officials said the agency was scrutinizing 20 to 30 scientists who might have had the knowledge and opportunity to send the anthrax letters.

After the government's settlement with Hatfill was announced in late June, Ivins started showing signs of strain, the Times said. It quoted a longtime colleague as saying Ivins was being treated for depression and indicated to a therapist that he was considering suicide. Family members and local police escorted Ivins away from the Army lab, and his access to sensitive areas was curtailed, the colleague told the newspaper. He said Ivins was facing a forced retirement in September.

The colleague declined to be identified out of concern that he would be harassed by the FBI, the report said.

Ivins was one of the nation's leading biodefense researchers.

In 2003, Ivins and two of his colleagues at the U.S. Army Medical Research Institute of Infectious Diseases at Fort Detrick received the highest honor given to Defense Department civilian employees for helping solve technical problems in the manufacture of anthrax vaccine.

In 1997, U.S. military personnel began receiving the vaccine to protect against a possible biological attack. Within months, a number of vaccine lots failed a potency test required by federal regulators, causing a shortage of vaccine and eventually halting the immunization program. The USAMRIID team's work led to the reapproval of the vaccine for human use.

The Times said Ivins was the son of a Princeton-educated pharmacist who was born and raised in Lebanon, Ohio. He received undergraduate and graduate degrees, including a Ph.D. in microbiology, from the University of Cincinnati.

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