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CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

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Re: CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

#71

Post by hn_throwaway_21 »

PragmaticPulp wrote: post #43
billyhoffman wrote: post #13

Being an executive at a (substantially smaller) SaaS startup I have no idea how having up to 90% of your revenue be fabricated could happen without others knowing: - where are the contracts corresponding to revenue? Yeah they are SaaS focused on SMB but this is a financial product, there will be contracts, NDAs, etc - if the majority of the customers are fake there is such little load on the system. How does engineer…

None of it makes sense in the context of a well-run business with proper executives in place. That’s because these frauds don’t operate like a well-run business. Usually, the upper management teams are extremely lean. The business is broken up into different silos such that few people can see the big picture. Each is led to believe they are a tiny fraction of the overall revenue, giving them the impression that the b…

Bingo! I worked in the upper management team of an early stage startup where the CEO was lying through his teeth to investors as well as employees. There were only three people at the top level. He was a super charismatic guy and a great story teller. No one thought he was lying until it came time to raise the next round and the lead investor from seed round ran due diligence to find booked revenue was no where close to what CEO had been claiming.

Re: CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

#72

Post by ev1 »

toomuchtodo wrote: post #55
squashua667 wrote: post #37

Earlier quoted context omitted.

>> “customer revenue” account controlled solely by the CEO > I cannot fathom a VP of Finance, let alone an outside accounting firm, that would be OK with this arrangement of accounts. Right? Then again, EY audited everything and gave those fake bank statements the "thumbs up" as part of the last round of funding and due diligence on the part of the investors. Crazy.

Wasn't EY also the firm who audited Wirecard? Why is anyone taking their audits seriously? https://markets.businessinsider.com/news/stocks/ey-chairman-...

EY were also the ones that audited and passed WoSign and StartCom SSL CA's that were fraudulently issuing bad certs and violating CAB regulations.

Re: CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

#73

Post by mhh__ »

jedberg wrote: post #28

> It seems ironic that the co-founder of a company designed to prevent online fraud would engage in fraudulent activity himself I don't find that ironic at all. Having worked in the security space for a long time, it seems like the best people in the business are the ones who would be great at committing the crimes if not for their own morality. Someone with a weak sense of morals could easily turn to evil.

Frank Abagnale has worked for the FBI for 40 years now. He still has an Ego, but he has turned down several offers of pardons for his past crimes and is now very much on the light side of the force.

https://youtu.be/vsMydMDi3rI

Re: CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

#74

Post by amorroxic »

PragmaticPulp wrote: post #43
billyhoffman wrote: post #13

Being an executive at a (substantially smaller) SaaS startup I have no idea how having up to 90% of your revenue be fabricated could happen without others knowing: - where are the contracts corresponding to revenue? Yeah they are SaaS focused on SMB but this is a financial product, there will be contracts, NDAs, etc - if the majority of the customers are fake there is such little load on the system. How does engineer…

None of it makes sense in the context of a well-run business with proper executives in place. That’s because these frauds don’t operate like a well-run business. Usually, the upper management teams are extremely lean. The business is broken up into different silos such that few people can see the big picture. Each is led to believe they are a tiny fraction of the overall revenue, giving them the impression that the b…

Agree, this being a cyber-fraud company I believe one could keep a team busy for a long time focusing on building secure systems rather than operating them to the point where no-one gets to see what's actually being stored within. The paper trail though I'm still puzzled about, he couldn't have acted alone.

Re: CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

#75

Post by NationalPark »

CatShitTodd wrote: post #65
pstoica wrote: post #59

Earlier quoted context omitted.

Decent salary, but that's not the point. I'm distraught to realize I spent 5 months on nothing, and it's not something I'm proud to have or explain on my CV. It's cruel how much money these people throw away, but we were misled into thinking it was real. I wouldn't have taken this position to support such a scumbag.

What is cruel is I am having to file bankruptcy because of this.

Were you an investor?

Re: CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

#76

Post by liability »

joering2 wrote: post #5

Sounds like a witch hunt. Big corpo tries to get rid of competitor. And once again government destroyed someones life. Now that he cannot do his part anymore its so easy to proof he deceived investors because well he doesn’t have any numbers to show si yeah he was lying. And besides, who didn’t flex a slide or two to show future numbers how they hoped it will look instead of honest truth. If thats the case then DOJ h…

> And besides, who didn’t flex a slide or two to show future numbers how they hoped it will look instead of honest truth. If thats the case then DOJ has to come and knock at door of every Hacker News user, or any IT person in that matter.

Unethical people commonly state their belief that everybody else does as they do. This is self-delusion meant to assuage feelings of guilt.

Hence the proverb (which I understand to exist in numerous languages): A thief thinks every man steals.

Re: CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

#77

Post by JumpCrisscross »

joering2 wrote: post #5

Sounds like a witch hunt. Big corpo tries to get rid of competitor. And once again government destroyed someones life. Now that he cannot do his part anymore its so easy to proof he deceived investors because well he doesn’t have any numbers to show si yeah he was lying. And besides, who didn’t flex a slide or two to show future numbers how they hoped it will look instead of honest truth. If thats the case then DOJ h…

> its so easy to proof he deceived investors because well he doesn’t have any numbers to show

There is a huge difference between saying "we're killing it" while you're hustling, highlighting bookings because your revenues suck, sending invoices early to bring up revenue, on one hand, and forging bank statements. The former move from almost expected to borderline behaviour. The last is simply fraud.

Re: CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

#78

Post by gkoberger »

AdmiralAsshat wrote: post #3

I feel sorry for any CEO who actually steps down to spend more time with his/her family. That explanation has now more or less been completely co-opted by "Our CEO got caught in an embarrassing scandal and they need to fade from the public eye for a bit." I now assume that anyone who gives that reason on their way out must have done something terrible that is yet or about to come to light.

A lot of CEOs step down with no drama! I think most people only think "scandal" when there's already a related scandal... I can't think of any CEOs/execs who have stepped down with suspicion without any other indicators of a scandal.

Re: CEO of Cyber Fraud Startup NS8 Arrested by FBI, Facing Fraud Charges

#79

Post by letstryagain2 »

billyhoffman wrote: post #13

Being an executive at a (substantially smaller) SaaS startup I have no idea how having up to 90% of your revenue be fabricated could happen without others knowing: - where are the contracts corresponding to revenue? Yeah they are SaaS focused on SMB but this is a financial product, there will be contracts, NDAs, etc - if the majority of the customers are fake there is such little load on the system. How does engineer…

You can fake everything. And most people don't expect this.

Wirecard opened a fake Bank Branch from a Philippines Bank in Singapore, had the EY guys walk in there and "verify" the Billion dollar balance on the computer screen.

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