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Former Netflix executive convicted of receiving bribes from contractors

justice.gov

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Re: Former Netflix executive convicted of receiving bribes from contractors

#281

Post by jacquesm »

rand846633 wrote: post #276
mbesto wrote: post #241

Earlier quoted context omitted.

I'm the other DD guy (besides jacquesm, who btw is very knowledgable) that regularly posts here. Happy to answer any questions. There really isn't any "public" info about tech DDs that I could share. The tech DD world is growing likely crazy so if you have a business and tech mind, you'll likely find companies hiring for roles, even if you don't have specific experience. These are two books that might help you provid…

> Happy to answer any questions. Assuming the receiver uses a proper offshore construct to accept the payment, this would go by unnoticed by your DD? But most interesting: What is your best guess - Your partner says you find “a hand full” from a few hundred - how many of these cases do you miss because the recipients use a not easy traceable proxy entity to collect the payment? Do you try to uncover such hidden actio…

> how many of these cases do you miss because the recipients use a not easy traceable proxy entity to collect the payment?

That's the 'million dollar question', and in some cases substantially more than one million. I think the reason a good number of these people get caught is (1) things like the Panama papers and other leaks like that have made it harder to do this, and have also brought the not insubstantial resources of the authorities to review these constructs and (2) most people never expect that during DD such a thing would be checked.

It's typically quite a surprise when we start asking about the activities of companies that the other party believes are well hidden.

Re: Former Netflix executive convicted of receiving bribes from contractors

#282

Post by jacquesm »

pacoWebConsult wrote: post #193
ugwigr wrote: post #156

the HN admin changed the link I posted. this is unethical - You are fundamentally changing what I posted. As a product manager here is a better solution - A.) Add a clear indicator that admin changed the link to redirect B.) Delete my link and post yours. Shawdow changing what users post is wrong.

Waiting for the dang smackdown reply to this comment. You posted a secondary source (typically these get redirected to the primary source for any story), and used the editorialized title from the original journalist as your post title. Pretty commonplace on HN to correct these things so we can discuss the facts, not the reductive analysis of what someone writes about the primary source.

OP has a stake in the company whose link was posted, so it goes a bit deeper than that. That particular source had already been flagged as problematic taking the number of 'dead' links into account.

https://news.ycombinator.com/from?site=businessofbusiness.co...

and

https://twitter.com/thebizofbiz/status/1450491847739068420

Where they make a lot of hay on being #1 with a story on HN.

Re: Former Netflix executive convicted of receiving bribes from contractors

#283

Post by ugwigr »

tptacek wrote: post #271
ugwigr wrote: post #270

Earlier quoted context omitted.

- "you expect"- wrong! - at no point did i express my "expectation". I was voicing my opinion on how I think the UX should work for this use case - "instead of the way it already worked when you joined." Just because it worked this way does not mean it is right. - "HN -> HN's rules." Yes, Captain Obvious. this does not mean their rules make sense and certainly does not mean a user voicing an opinion on how the rules…

This "captain obvious" stuff isn't helping you; it's just going to get everything you have to say flagged. You sound upset. I don't think I understand why --- having links replaced is totally standard HN practice, happens all the time, and works to the overall benefit of the community. But I don't have to understand why you're upset for you to feel that way. Rather, I'd just say, step away from HN for a bit until you…

- "get everything you have to say flagged." I do not care about comments getting flagged or HN karma - " happens all the time" . perhaps this is why it is important to consider whether the UX can be improved. I am not saying links should not be replaced - I am saying the UX should be improved when this happens.

_

Re: Former Netflix executive convicted of receiving bribes from contractors

#284

Post by nilsbunger »

rsyring wrote: post #124
nilsbunger wrote: post #94

Earlier quoted context omitted.

People often set up an LLC for their consulting thinking it will help with 1) taxes and 2) liability. But neither of those are quite right: 1) the same tax deductions are available on your normal schedule C 2) while acting on behalf of your LLC you’re still personally liable for your actions (let alone your illegal schemes).

Subchapter S corporations or LLCs facilitate paying yourself distributions, which are exempt from Medicare and Social Security taxes, saving you an initial 15%. Although, there are details and caveats to be aware of. I don't know of any way to get that benefit without a corporation.

You are right about that, and I probably should've mentioned it in my comment. But I feel it's a niche case for these reasons:

1) The benefit only applies to profits above "a reasonable salary". You need to determine and potentially later defend what you chose as a "reasonable salary".

2) Once you have over ~150K income (including your day job's salary and LLC profit), social security taxes phase out so most of the benefit is gone (just the medicare portion remains), unless you have a HUGE LLC profit.

3) There's overhead in filing taxes on an s-corp.

All this probably makes sense if you have >$100K LLC profits and no other big income source, or maybe if you have >$500K LLC profits regardless. You'll def want an accountant. Companies like Collective.com exist to make it easier to go the s-corp route if you choose to go that way. But it is complicated for some minor savings.

Re: Former Netflix executive convicted of receiving bribes from contractors

#285

Post by gmadsen »

spenczar5 wrote: post #62
tptacek wrote: post #43

The DOJ press release is clearer than this article is: https://www.justice.gov/usao-ndca/pr/former-netflix-executiv... Some fun details: Kail did his criming through a shell LLC he set up called "Unix Mercenary". He took between 10-15% of the total billings for each of the companies he hooked up with this scheme. None of those companies were charged (more's the pity). They got him on mail fraud, wire fraud, honest se…

Thanks, this is indeed a better source. A lot of people here are saying this is incredibly common which is frankly pretty surprising to me. Does it really happen through shell LLCs? I am definitely aware of execs prioritizing startups they've invested in, which is... not a great look. But this seems to be a different thing. Kail wasn't an investor. He explicitly drafted agreements that paid him a fraction of the mone…

this seems like such a low reward high risk grift. A Netflix exec needs to risk his entire life over $450K?

Re: Former Netflix executive convicted of receiving bribes from contractors

#286

Post by rand846633 »

jacquesm wrote: post #281
rand846633 wrote: post #276

Earlier quoted context omitted.

> Happy to answer any questions. Assuming the receiver uses a proper offshore construct to accept the payment, this would go by unnoticed by your DD? But most interesting: What is your best guess - Your partner says you find “a hand full” from a few hundred - how many of these cases do you miss because the recipients use a not easy traceable proxy entity to collect the payment? Do you try to uncover such hidden actio…

> how many of these cases do you miss because the recipients use a not easy traceable proxy entity to collect the payment? That's the 'million dollar question', and in some cases substantially more than one million. I think the reason a good number of these people get caught is (1) things like the Panama papers and other leaks like that have made it harder to do this, and have also brought the not insubstantial resou…

I don’t see offshore leeks as a big deterrent, unfortunately. The three big ICIJ leaks were not published as in dumped to the public. Only politicians, PEPs, obvious money launderers and some obvious other criminals were selected and exposed. (It’s only money laundering if you can proof the money comes from the proceedings of crime)

There are some criminal service industry leaks that are public, or have been public, yet it doesn’t appear more than a few individual have the motivation to follow trough in combing them. At least this is true for groups who would publish on their findings.

Re: Former Netflix executive convicted of receiving bribes from contractors

#287

Post by nilsbunger »

camgunz wrote: post #259
nilsbunger wrote: post #94

Earlier quoted context omitted.

People often set up an LLC for their consulting thinking it will help with 1) taxes and 2) liability. But neither of those are quite right: 1) the same tax deductions are available on your normal schedule C 2) while acting on behalf of your LLC you’re still personally liable for your actions (let alone your illegal schemes).

It can depend and IANAL buuuut I do have an LLC taxed as an S Corp, because you can dramatically reduce your tax burden. Essentially you buffer your money in your LLC and pay yourself a "reasonable salary". For example: maybe you earn $200k this year as a software contractor. You go to glassdoor and find that mean salary for software engineers is $96k/yr. You pay yourself $8k/mo (pre-tax), deducting payroll taxes and…

The 401k part is available to sole proprietors too. "Solo 401k" or SEP-IRA are the tools for the job. They're easy to set up and you can put up to that same limit ($45Kish?) away if you have enough income. And if you have a LOT of income ($200K+?) you can really turbocharge it with a defined-benefit plan, which lets you put away close to 50% of the consulting income for retirement.

Most of the other things you list are available to sole proprietors too: "(paying for your) retirement savings, depreciating assets, (paying for your) salaries, food, travel, lodging, equipment, and services"

I'm not sure about health care, are you sure there's no way to deduct it as a sole proprietor?

Re: Former Netflix executive convicted of receiving bribes from contractors

#288

Post by ugwigr »

batch12 wrote: post #274
ugwigr wrote: post #251

Earlier quoted context omitted.

ok. what did you disagree with if not my point? I do not care in the least bit about HN's karma

A better way of phrasing would be -- until I understood your point. I meant "saw your point" as in "I see your point".

got it. Makes sense.

Re: Former Netflix executive convicted of receiving bribes from contractors

#289

Post by nilsbunger »

zrail wrote: post #186
cmeacham98 wrote: post #123

Earlier quoted context omitted.

From my understanding, an LLC does help with _financial_ liability - if the company fails and goes bankrupt, your personal assets generally won't be on the line. Obviously, an LLC cannot shield you from criminal liability.

Small time LLCs are not going to get so much as a credit card without a personal guarantee. Sometimes you can get loans from the company doing your payment processing but only because they're directly involved and can see your cash flow. (disclaimer: I work for Stripe which had a product that works like that, but not anywhere near that team)

What this person said. You'll almost always have a personal guarantee on a loan. And if it's just you consulting, you don't typically have assets in the LLC to borrow against anyway.

Re: Former Netflix executive convicted of receiving bribes from contractors

#290

Post by jacquesm »

rand846633 wrote: post #286
jacquesm wrote: post #281

Earlier quoted context omitted.

> how many of these cases do you miss because the recipients use a not easy traceable proxy entity to collect the payment? That's the 'million dollar question', and in some cases substantially more than one million. I think the reason a good number of these people get caught is (1) things like the Panama papers and other leaks like that have made it harder to do this, and have also brought the not insubstantial resou…

I don’t see offshore leeks as a big deterrent, unfortunately. The three big ICIJ leaks were not published as in dumped to the public. Only politicians, PEPs, obvious money launderers and some obvious other criminals were selected and exposed. (It’s only money laundering if you can proof the money comes from the proceedings of crime) There are some criminal service industry leaks that are public, or have been public,…

Fair enough. I go on the assumption that there will always be stuff we miss, and my customers do as well - especially given the time pressure that we are under to deliver. Even so, it's a given that some people will get away with these things. Interesting detail: over the years you'd expect something like this to pop up after the fact or in a subsequent DD if it goes on for long enough, but that has never happened. So maybe the number of missed cases is lower than what I would personally expect it to be (a factor of two would not surprise me).
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