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Netflix Executive Sentenced to 30 Months for 700K Bribes, Kickbacks from Vendors

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Re: Netflix Executive Sentenced to 30 Months for 700K Bribes, Kickbacks from Vendors

#51

Post by nightpool »

parhamn wrote: post #14

Some of the vendors mentioned: - VistaraIT, LLC - Platfora, Inc. - Sumo Logic, Inc - ElasticBox, Inc - Numerify, Inc. - Docurated, Inc - Maginatics, Inc. Is what they did illegal too? Presumably with zero chance of being charged. I haven't fully groked the limits of 'fraud' and 'money laundering' here in the US. These typically feel like they should be civil breach of fiduciary duty type cases.

From TFA:

    Evidence at trial showed that several more companies paid Kail.  Neither Netenrich, Vistara, nor any of the other companies were charged with criminal conduct.  Only Kail was charged with devising the criminal scheme that defrauded Netflix.
Since Kail was charged for wire fraud and mail fraud (deceiving Netflix about his personal compensation and conflicts of interest), it seems possible that the companies could be charged with "conspiracy to commit wire fraud" for colluding with him? It's hard for me to say exactly how easy this would be to prove—I think it's pretty clear to say that most companies / people should know that paying someone on the side for inside information on competitors or paying the VP a % of all contracts is an act to defraud Netflix. So the "meeting of the minds" to commit fraud is there, and the actual fraud is there (because one of the participants in the conspiracy committed it). But obviously this stuff is complicated and i'm not a lawyer. Also, the companies themselves would probably be pretty hard to charge, rather than the individual sales reps who signed off on the payments.

Re: Netflix Executive Sentenced to 30 Months for 700K Bribes, Kickbacks from Vendors

#52

Post by brian_cunnie »

usea wrote: post #29
throwfaangus wrote: post #4

Why risk this even? Surely, he's making much more than 700K as an exec in the first place.

Wealthy people usually still want more money, even past what non-wealthy people would consider enough.

The two multimillionaires I know (one sold his company to JPMC, the other, to Google) aren't driven primarily by money. They have a genuine interest in what they do (securitizing carbon offsets, and designing analog circuits, respectively).

They're what you'd call "good guys".

They wouldn't be caught dead in that crazy kickback scheme that was described.

I know this is a small sample set, but what I've come away with is that rich people are like you and me, except they happen to be rich.

Re: Netflix Executive Sentenced to 30 Months for 700K Bribes, Kickbacks from Vendors

#54

Post by airstrike »

altmind wrote: post #5
diab0lic wrote: post #2

The actual title is "Former Netflix Executive Sentenced To 30 Months For Bribes And Kickbacks From Netflix Vendors ". Mike left Netflix in 2014 and joined Yahoo and CIO for a moment before this all came out and Meyer put him on leave.

It wasn't intentional, the headline was too long to fit.

I think 'Former' is a key word here, showing Netflix is no longer affiliated with him. And "700K Bribes" reads like the number of bribes, not dollars collected

Also @dang

Re: Netflix Executive Sentenced to 30 Months for 700K Bribes, Kickbacks from Vendors

#55

Post by president »

vmception wrote: post #43
PragmaticPulp wrote: post #13

Every time this story comes up, the comments are filled with people proclaiming that kickbacks like this are totally normal and very common. I can't tell how much of it is random people projecting their cynicism onto the business world, or if it's people who have been part of bribery/kickback schemes themselves trying to normalize the behavior online. Either way, cases like this should make it clear that the behavior…

or not trying to normalize but pointing out that its already normalized to the point that you can’t be an effective employee due to competition with people winning deal flow via kickbacks The actions in question occurred almost 10 years ago, how many people lost commissions and bonuses and promotions and jobs and relationships by trying to play fair? acknowledging this isn’t being an apologist for it or condoning it…

Yes, this is effectively a race to the bottom situation and is a form of corruption of the rule of law. In today's world, we tend to have a culture of "letting things slide" and all this does is gradually normalize and escalate breaking the law over a long period of time.

Re: Netflix Executive Sentenced to 30 Months for 700K Bribes, Kickbacks from Vendors

#57

Post by notch656a »

PragmaticPulp wrote: post #13

Every time this story comes up, the comments are filled with people proclaiming that kickbacks like this are totally normal and very common. I can't tell how much of it is random people projecting their cynicism onto the business world, or if it's people who have been part of bribery/kickback schemes themselves trying to normalize the behavior online. Either way, cases like this should make it clear that the behavior…

The average American may earn something like 125k in 30 months. 700k in exchange for a small chance of 30 months in jail probably sounds like a good deal to a purely rational and amoral person.

Re: Netflix Executive Sentenced to 30 Months for 700K Bribes, Kickbacks from Vendors

#58

Post by 0x0nyandesu »

lowkey_ wrote: post #50
0x0nyandesu wrote: post #28

Why is this even illegal? Perks in the industry is normal. People are always trying to get their own businesses front and center for contracts. Some of these companies just don't have much to give out other than equity and what exactly is wrong about that?

For another example, look at how college bribery schemes are illegal. They're not illegal because they're unfair or immoral, they're illegal because the administrator is selling the spot that the college owns; it's not his/her spot to sell. If the company wanted to be used by Netflix in exchange for equity, then they could make a deal with Netflix itself. This executive was essentially selling the rights to contracts…

You mean like forcing kids to buy brand new books so that they can get a code to use to take tests on an online platform that the professor gets kickbacks from that has nothing to do with the university the kid is attending?

Re: Netflix Executive Sentenced to 30 Months for 700K Bribes, Kickbacks from Vendors

#59

Post by parhamn »

themdonuts wrote: post #56

Genuine question here. Who took him to court? Did I understand well it was a public institution/Irs? There seems to be no mention of netflix (company) being involved in the trial on the accusation side.

It's a federal crime. The US Government took him to court. As for who tipped them off, thats a different question.

Re: Netflix Executive Sentenced to 30 Months for 700K Bribes, Kickbacks from Vendors

#60

Post by humanistbot »

0x0nyandesu wrote: post #28

Why is this even illegal? Perks in the industry is normal. People are always trying to get their own businesses front and center for contracts. Some of these companies just don't have much to give out other than equity and what exactly is wrong about that?

Officially, the crime is fraud and the victim is Netflix, Inc. He defrauded the other employees and the corporate shareholders. He also laundered the money, which is also illegal and why the IRS got involved.

Kickbacks aren't the fundamental issue here. If this was a single-employee startup with no other investors or shareholders, this would be perfectly legal. Or if Netflix, Inc. had a policy that authorized individual executives to personally receive cash and stock from vendors as perks, then this would have been perfectly legal. However, as the article says, Netflix had an internal policy that he blatantly violated:

> Netflix policies prohibited conflicts of interest by its employees by its Code of Ethics and its “Culture Deck,” which required the disclosure of actual or apparent conflicts of interest and the reporting of gifts from entities seeking to sell products or services to the company.

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