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Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were “the only liquid investment capital” available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

This will raise questions about crime’s influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. “In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor,” he said.

Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.

“Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities… There were signs that some banks were rescued that way.” Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.

“That was the moment [last year] when the system was basically paralysed because of the unwillingness of banks to lend money to one another. The progressive liquidisation to the system and the progressive improvement by some banks of their share values [has meant that] the problem [of illegal money] has become much less serious than it was,” he said.

The IMF estimated that large US and European banks lost more than $1tn on toxic assets and from bad loans from January 2007 to September 2009 and more than 200 mortgage lenders went bankrupt. Many major institutions either failed, were acquired under duress, or were subject to government takeover.

Gangs are now believed to make most of their profits from the drugs trade and are estimated to be worth £352bn, the UN says. They have traditionally kept proceeds in cash or moved it offshore to hide it from the authorities. It is understood that evidence that drug money has flowed into banks came from officials in Britain, Switzerland, Italy and the US.

Those findings, by a team from Rutgers and Columbia, are almost certain to add fuel to a long-running debate. Do too many children from poor families receive powerful psychiatric drugs not because they actually need them — but because it is deemed the most efficient and cost-effective way to control problems that may be handled much differently for middle-class children?

The questions go beyond the psychological impact on Medicaid children, serious as that may be. Antipsychotic drugs can also have severe physical side effects, causing drastic weight gain and metabolic changes resulting in lifelong physical problems.

On Tuesday, a pediatric advisory committee to the Food and Drug Administration met to discuss the health risks for all children who take antipsychotics. The panel will consider recommending new label warnings for the drugs, which are now used by an estimated 300,000 people under age 18 in this country, counting both Medicaid patients and those with private insurance.

Meanwhile, a group of Medicaid medical directors from 16 states, under a project they call Too Many, Too Much, Too Young, has been experimenting with ways to reduce prescriptions of antipsychotic drugs among Medicaid children.

In a sweeping investigation that could impact Miami’s public projects for years, the U.S. Securities and Exchange Commission is probing the city’s major bond offerings between 2006 and 2009 and questionable financial transfers used to balance the budget.

A confidential SEC letter, FedExed to the city Friday and obtained by The Miami Herald, demands that Miami turn over reams of e-mails and internal documents showing how it was moving money around to shore up its bottom line — as well as how it represented its financial picture to bondholders.

The investigation represents the most significant scrutiny of the inner workings of Miami’s financial operations since a budget crisis a decade ago led the state to take control of its checkbooks.

“It would be extremely disappointing if the city had engaged in that kind of behavior again,” said Mitch Herr, the senior trial counsel for the SEC who prosecuted the earlier case against the city. That crisis “should have been a wake-up call and should have resulted in stronger controls.”

Now, the city has been ordered to “preserve all computer resources utilized by Miami, or any other persons working on or involved in any of Miami’s activities, included but not limited to hard drives, floppy disks, servers, and all other means of storage.”

Electrical engineering associate professor Amit Lal and graduate student Steven Tin presented a prototype microelectromechanical systems (MEMS) transmitter—an RF-emitting device powered by a radioactive source with a half-life of 12 years, meaning that it could operate autonomously for decades. The researchers think the new RFID transmitter, which produces a 5-milliwatt, 10-microsecond-long, 100-megahertz radio-frequency pulse, could lead to the widespread use of radioisotope power sources.

The work is funded by the Defense Advanced Research Projects Agency (DARPA), which also funds Lal and Tin’s work on another project, called Hybrid Insect Micro-Electro-Mechanical Systems (HI-MEMS), whose aim is the creation of hybrid cybernetic organisms. In his presentation, Tin said that part of the goal of the radioisotope transmitter work is to power the insects that the group is developing for DARPA. The HI-MEMS program, which is approaching its fourth year, has already grown several kinds of insects—moths and beetles—with implanted control electronics. With such controls, they can be driven by a remote operator for ”stealth applications” and disaster response.

On the hardware side we are collaborating with D-Wave in Vancouver, Canada. D-Wave develops processors that realize the adiabatic quantum algorithm by magnetically coupling superconducting loops called rf-squid flux qubits. This design realizes what is known as the Ising model which represents the simplest model for an interacting many-body system and it can be manufactured using proven chip fabrication methods. Unfortunately, it is not easy to demonstrate that a multi-qubit system such as the D-Wave chip indeed exhibits the desired quantum behavior and experimental physicists from various institutions are still in the process of characterizing the chip.

The tentative agreement, reached late Monday, would resolve a 13-year-old lawsuit over hundreds of thousands of land trust accounts that date to the 19th century. Specialists in federal tribal law described the lawsuit as one of the most important in the history of legal disputes involving the government’s treatment of American Indians.

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The dispute arises from a system dating to 1887, when Congress divided many tribal lands into parcels — most from 40 to 160 acres — and assigned them to individual Indians while selling off remaining lands.

The Interior Department now manages about 56 million acres of Indian trust land scattered across the country, with the heaviest concentration in Western states. The government handles leases on the land for mining, livestock grazing, timber harvesting and drilling for oil and gas. It then distributes the revenue raised by those leases to the American Indians. In the 2009 fiscal year, it collected about $298 million for more than 384,000 individual Indian accounts.

The lawsuit accuses the federal government of mismanaging that money. As a result, the value of the trusts has been unclear, and the Indians contend that they are owed far more than what they have been paid.

Under the settlement, the government would pay $1.4 billion to compensate the Indians for their claims of historical accounting irregularities and any accusation that federal officials mismanaged the administration of the land itself over the years.

Each member of the class would receive a check for $1,000, and the rest of the money would be distributed according to the land owned. In addition, legal fees, to be determined by a judge, would be paid from that fund.

Philip Frickey, a law professor at the University of California, Berkeley, who specializes in federal Indian law, said that of all the Indian land claims and other lawsuits over the past generation, the trust case had been a “blockbuster” because it is national in scope, involves a large amount of money, and has been long-running.