Former Netflix executive convicted of receiving bribes from contractors

I do not understand this. I mean, politicians do this all the time and do not go to jail (Spain).

I do not mean people offer themselves for briving.

But did anyone ever think what would happen if politicians did not have much power to regulate? Companies would not be able to lobby.

That means there would not be nearly as much incentive to brive as there is today.

Once a regulator is in the middle, the incentive for corruption is there.

I do not think people use Netflix because of the corrupt business of this guy. They use it because it is entertaining or find it useful. The same way people will keep studying Picasso (I hate his art, but anyways) because they consider it art, and he was a misogynist.

But his art is his art, the same way Netflix is entertaining for some people.

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 services fraud, and money laundering. The victim of the fraud was, of course, Netflix itself.

Additional fun facts from PACER:

He's seeking to exclude his shares in Sumo Logic and Netskope from forfeiture, arguing that they were largely the result of his own hard work, which takes some serious chutzpah.

All of this apparently happened back in 2014 (the conviction is recent). If you're wondering what Netflix thought of all this, Kail apparently left Netflix for a job at Yahoo, from which he was fired after Netflix found out about his scheme and told Yahoo.

Kail's sentencing memorandum is a fun read (again: chutzpah). For instance, this gem:

Further, though Mr. Kail complained of problems with Sumologic (as one would see with any new startup), the product itself was “useful,” according to Ashi Sheth. (R.T. Vol. 8, p. 1670-71). As described below, at the time, Sumologic saved Netflix from paying for a far more expensive and inferior product called Splunk.

As soon as the right person found out about it...

He was playing both sides of the deal : acting for Netflix in selecting a vendor, while simultaneously acting as a paid consultant to the vendor.

Conflict of interest. Netflix is defrauded because they could have selected a lower cost vendor, or developed the service in-house.

I could imagine some slippier cases. A lot of successful startup executives have a bunch of money and invest it in startups. They (of course) pick ones that they think will do a good job in their space. It isn't that crazy to imagine them recommending using a startup they've invested in, and it's also possible to imagine them making a convincing case to a board that the startup is the best option available.

They still can profit massively from that, though, so it's still kind of messy territory.