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Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

cnn.com

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Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#121

Post by 1123581321 »

miltonlost wrote: post #47
1123581321 wrote: post #28

Earlier quoted context omitted.

There is truth to this. She was exposed because JP Morgan ran a marketing campaign that converted extremely poorly. Better purchased data might've prevented significant forensics. The poor due diligence had already been signed off. While she committed fraud, I feel sorry for her because of her naivety. It must've been a sick moment when they asked to examine the data during due diligence. If she'd known that would be…

From the complaint: > In particular, CC-1 and JAVICE asked Engineer-1 to supplement a list of Frank’s website visitors with additional data fields containing synthetic data. > Engineer-1 was uncomfortable with the request and stated, in sum and substance, “I don’t want to do anything illegal.” JAVICE and CC-1 claimed to Engineer-1 that it was legal. JAVICE stated to Engineer-1, in sum and substance, “We don’t want to…

Yes, read the same. Naive in thinking she could get past that and they wouldn’t do anything particularly revealing with the data. A smarter fraudster would’ve backed out earlier with less damage.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#122

Post by tptacek »

ajross wrote: post #73
giancarlostoro wrote: post #67

Earlier quoted context omitted.

I guess it all depends on how you're cheating. Are you defrauding others in your cheating? Or are you just bypassing bureaucracy like not having a Taxi service license?

Potato/potatoe. Existing taxi medallion holders were absolutely harmed by Uber. Existing licensed hotel operators were absolutely harmed by AirBnB. And we all celebrated that to great effect here. But it was breaking the rules. We just think THOSE rules were bad but THESE rules are good. Well, it's not our call to make, it's the prosecutors'. And you (yes, you personally) aren't nearly as insulated from this kind of…

No, your logic doesn't hold. The distinction being drawn here is between civil and criminal liability. Operating an unlicensed taxi service in most municipalities (maybe all of them) is a civil infraction, not a crime.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#124

Post by teraflop »

randycupertino wrote: post #19

My favorite thing about this case is how she bragged to her lead engineer she wouldn't go to prison, "“Don’t worry — I don’t want to end up in an orange jumpsuit" when she was trying to convince the engineer to fabricate their user data. From the complaint: > In particular, CC-1 and JAVICE asked Engineer-1 to supplement a list of Frank’s website visitors with additional data fields containing synthetic data. > Engine…

On top of everything else, Scientist-1 doesn't come off looking too good.

He was contracted to make a synthetic dataset, based on a small set of records which were supposedly randomly sampled from a larger original dataset. He didn't really have any way of knowing he was being lied to at that point, or what his work would be used for.

But when he invoiced $13k for his services, including a detailed breakdown of what he did, Javice came back and offered him an extra $5k if he would change the invoice to a one-liner that just said "data analysis services". And he immediately agreed.

I find it hard to believe someone could get that request and not understand that they were being asked to be complicit in fraud. At best, it's really poor judgment.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#125

Post by tptacek »

SapporoChris wrote: post #118

Is it correct that Charlie Javice is keeping the majority of the profits she made from the sale of Frank? If so, it's quite possible she considers the profit well worth the penalty.

No. She's required to make restitution far in excess of the total proceeds of the sale, including as a minor component a sum that captures her own personal proceeds.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#126

Post by saalweachter »

paxys wrote: post #90
ajross wrote: post #73

Earlier quoted context omitted.

Potato/potatoe. Existing taxi medallion holders were absolutely harmed by Uber. Existing licensed hotel operators were absolutely harmed by AirBnB. And we all celebrated that to great effect here. But it was breaking the rules. We just think THOSE rules were bad but THESE rules are good. Well, it's not our call to make, it's the prosecutors'. And you (yes, you personally) aren't nearly as insulated from this kind of…

What was the fraud? Limo services were always allowed in NYC, and didn't have to abide by the medallion system. All Uber did was make it more efficient to find and book a Limo.

Limo services are also regulated by the TLC in NYC.

The rules are different between taxis and black cars, but there are still rules.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#127

Post by wil421 »

HankStallone wrote: post #106
Aurornis wrote: post #49

Earlier quoted context omitted.

Believe it or not, smaller fraudsters get prosecuted all the time, too. One of the news reporters I followed on Twitter in my area liked to follow all of the small cases of real estate and business fraud in my area. There were a lot of prosecutions for people who were stealing You just don't hear about them as much because someone going to jail for stealing $60K from a couple families from their church in a fake real…

A few years ago the manager of our local Menards got convicted of stealing over a half-million dollars over 5 years. She only got 180 days, too, and was allowed to leave the jail for work. Depending on how high on the hog she lived for those five years, she might figure it was worth it. I knew one local HVAC company where the office manager skimmed off six figures over something like 20 years before she got caught. J…

I knew a guy whose parents basically invented thrift stores. He’s accountant did the same thing while he was battling drug addiction. Not sure if she ever got prosecuted I think the owner wanted to move on. Then he died of a heart attack.

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#128

Post by diognesofsinope »

chatmasta wrote: post #52
TuringNYC wrote: post #12

>> A prosecutor, Micah Fergenson, though, said JPMorgan “didn’t get a functioning business” in exchange for its investment. “They acquired a crime scene.” I do not understand how an acquisition this big got thru due diligence without noticing all the fake users. Anyone in corporate M&A know if it is normal to spend this much money without inspecting the goods? Seems like the most basic of OLAP queries and two days of…

If you read the details in some of the earlier articles about this, they avoided plenty of due diligence. But she also went to great lengths to prevent them from completing that due diligence. And for the minimal due diligence she did permit them to undertake, she only ever sent them fraudulent data and documentation.

There was an article on Bloomberg or WSJ that said the Director in the acquisition had a Teams chat where she said "sometimes you don't need to do due diligence at all" lol

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#129

Post by sontek »

cactusplant7374 wrote: post #26
TuringNYC wrote: post #12

>> A prosecutor, Micah Fergenson, though, said JPMorgan “didn’t get a functioning business” in exchange for its investment. “They acquired a crime scene.” I do not understand how an acquisition this big got thru due diligence without noticing all the fake users. Anyone in corporate M&A know if it is normal to spend this much money without inspecting the goods? Seems like the most basic of OLAP queries and two days of…

> Seems like the most basic of OLAP queries and two days of effort would reveal very suspicious userbase. What would those queries look like?

SELECT COUNT(*) FROM users WHERE date_deleted IS NULL AND date_last_activity >= CURRENT_DATE - INTERVAL '120 days';

Re: Founder sentenced to seven years in prison for fraudulent sale to JPMorgan

#130

Post by paxys »

saalweachter wrote: post #126
paxys wrote: post #90

Earlier quoted context omitted.

What was the fraud? Limo services were always allowed in NYC, and didn't have to abide by the medallion system. All Uber did was make it more efficient to find and book a Limo.

Limo services are also regulated by the TLC in NYC. The rules are different between taxis and black cars, but there are still rules.

Uber drivers need a TLC license in NYC and fall under the same regulations.
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