Category: Fraud

Yeah, a Big F%$#ing Deal

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Joe Biden has issued a rule banning surprise medical billing. 

I’m surprised, particularly its application to emergency services, where private equity has made surprise billing a central part of their profit generation strategies.  (Biden has a lot of PE types in the administration)

This is an very good, at least in the context of an executive order: (We really need a law to ban this)

The Biden administration on Thursday unveiled the first in a series of rules aimed at banning surprise billing.

The interim final rule bars surprise billing for emergency services and high out-of-network cost-sharing for emergency and non-emergency services. It also prohibits out-of-network charges for ancillary services like those provided by anesthesiologists or assistant surgeons, as well as other out-of-network charges without advance notice.

………

While public health insurance programs like Medicare and Medicaid already prohibit balance billing, people with job-based coverage or individual health plans frequently and unknowingly accept care from an out-of-network provider before they are slapped with a surprise medical bill. The new rule aims to put a stop to that.

………

This first round of regulation applies to providers, air ambulance providers, group health plans, health insurance issuers and Federal Employees Health Benefits Program carriers. The rule takes effect in 60 days, but most provisions don’t apply until January 1. Providers and insurers have until September 1 to submit comments.

Air Ambulance providers have been charging insane rates over the past few years as PE has snapped up more services.

The private equity model of medicine is to drastically overcharge people in situations where they have no choice.

Under the new rule, health plans that cover emergency services cannot use prior authorization for those services and must pay for them regardless of whether the clinician is an in-network provider or emergency facility. Likewise, insurers can’t charge their enrollees higher out-of-pocket costs for emergency services delivered by an out-of-network provider. They also have to count beneficiaries’ cost-sharing for those emergency services toward their in-network deductible and out-of-pocket maximums.

………

The Biden administration is still working out the details about how the dispute resolution process will work. But Congress laid out the broad-brush strokes in December’s No Surprises Act, which passed as part of its end-of-year spending package. Providers and insurers will have 30 days to agree to a price for the medical services delivered. And if they don’t settle, they’re supposed to enter arbitration, during which each side will present a final offer and make their case for why their recommendation is best. The arbitrator must then pick one of the two offers. But they can’t split the difference.

MY guess is that the PE parasites will still find a way to rat-f%$# people, it’s king of their “thing”, but it looks to be significantly harder now.

Personally, I favor a government owned National Health Service as a solution, but this is a positive move.

The Dog Ate My Homework

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So now, Amazon is blaming social media for the plague of false reviews on its site.

If they have the resources to dedicate to tracking their shoppers’ habits, and the resources to surveil and harass their employees at the slightest whiff of a unionization effort, they have the resources to fix this:

Amazon today said it can’t stop fake product reviews without help from social media companies, and it blamed those companies for not doing more to prevent solicitation of fake reviews.

In a blog post, Amazon said its own “continued improvements in detection of fake reviews and connections between bad-actor buying and selling accounts” has led to “an increasing trend of bad actors attempting to solicit 

fake reviews outside Amazon, particularly via social media services.”

Amazon doesn’t handle the fake review problem because they don’t want to.  Anything near a full accounting would reveal just how badly they are screwing their customers, and they make a lot of money by screwing these same customers.

That’s also why they are so lackadaisical about pursuing counterfeit product in their market.

It’s All of the “Gig Economy” Companies

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Amazon just settled a lawsuit where it stole tips from its drivers.

The short version is, they used tip data to lower rates to drivers in specific areas.

This is the very epitome of how companies like Amazon, Uber, Lyft, DoorDash, etc. use opaque algorithms to cheat their employees:

The US Federal Trade Commission on Friday announced the approval a consent order against Amazon that requires the company to pay $61.7m to resolve charges that for two and a half years it took tips intended for Amazon Flex drivers and concealed the diversion of funds.

………

The tech giant launched its Flex service in 2015, promising drivers – which it classified as independent contractors and referred to as “delivery partners” – that it would pay $18-25 per hour for the delivery of goods from Amazon.com, Prime Now (household goods), Amazon Fresh (groceries), and Amazon Restaurant (takeout).

Amazon’s ads made promises like, “You will receive 100 per cent of the tips you earn while delivering with Amazon Flex.”

However, during the period from late 2016 through August 2019, drivers – who, as independent contractors, paid for their own car, fuel, maintenance, and insurance – saw only a portion of the promised gratuity when customers opted to tip.

That’s because Amazon allegedly, without telling its drivers, shifted to a “variable base pay” rate, which varied by location, wasn’t disclosed to drivers, and was frequently lower than the promised hourly range.

“Under the variable base pay approach, for over two and a half years, Amazon secretly reduced its own contribution to drivers’ pay to an algorithmically set, internal ‘base rate’ using data it collected about average tips in the area,” the FTC complaint [PDF] explains.

………

To make up any difference between the base rate and the advertised minimum, Amazon is said to have used some or all of any tip left by customers to meet its payment commitment. For example, if Amazon set a base rate for a region at $12 and the customer left a tip of $6 via Amazon’s electronic tip collection system, then the company paid the driver only $12 and augmented the payment with the $6 tip, instead of paying the $18.

This is not enough.  People should be going to jail for this, and not just white collar prison.

This should be hard time in a hard prison, not just because of the scope and callousness of the theft, but because the threat of a few years in Terre Haute will get people to turn on higher ups in the operation.

They stole from thousands of their employees, and they did so knowingly, there are numerous internal emails detailing the reputational risk to Amazon.

A Little Late, Aaron Schwartz is Dead

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The Supreme Court has finally shot down the overbroad interpretation of the Computer Fraud and Abuse Act (CFAA) that was used to prosecute Aaron Schwartz to death.

I’d say, “About f%$#ing time,” but it’s at least 7 years too late: 

The Supreme Court’s decision on Thursday in Van Buren v. United States provides the court’s first serious look at one of the most important criminal statutes involving computer-related crime, the federal Computer Fraud and Abuse Act. Justice Amy Coney Barrett’s opinion for a majority 0f six firmly rejected the broad reading of that statute that the Department of Justice has pressed in recent years.

Among other things, the CFAA criminalizes conduct that “exceeds authorized access” of a computer. Crucially, the statute defines that term as meaning “to access a computer with authorization and to use such access to obtain … information … that the accesser is not entitled so to obtain.” The question in Van Buren was whether users violate that statute by accessing information for improper purposes or instead whether users violate the statute only if they access information they were not entitled to obtain. In this case, for example, a Georgia police officer named Nathan Van Buren took a bribe to run a license-plate check. He was entitled to run license-plate checks, but not for illicit purposes. The lower courts upheld a conviction under the CFAA (because he was not entitled to check license-plate records for private purposes). The Supreme Court disagreed, adopting the narrower reading of the CFAA, under which it is a crime only if users access information they were not entitled to obtain.

To be clear: Van Buren should be in jail for a very long time, but his crime is violation of people’s civil rights, abuse of power, and taking bribes, not computer hacking.

And Amy Coney Barret gets to the heart of the matter, that the government’s position would literally make tens of millions of people unwitting felons:

Finally, Barrett turns to a topic that dominated the amicus filings and much of the time at oral argument: the “breathtaking amount of commonplace computer activity” that the Government’s reading would criminalize. For Barrett, that reality “underscores the implausibility of the Government’s interpretation,” which provides (in words Justice Elena Kagan coined in an earlier case) “extra icing on a cake already frosted.” Barrett notes that extending the statute to “every violation of a computer-use policy” would make criminals of “millions of otherwise law-abiding citizens,” offering examples of such trivial conduct as “embellishing on online-dating profile” and “using a pseudonym on Facebook” – activities that violate website use restrictions and thus would fall within the government’s understanding of the CFAA.

If there is a lesson from all of this, it is that prosecutors will take the most outrageous and extreme view of any criminal statue that they come across.

There needs to be some serious reform here.

When You’ve Lost Silly-Con Valley

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It looks like even the gonifs running Silicon Valley unicorns have decided that special-purpose acquisition companies (SPACs) are too dodgy for them.

I did not think that there was a financial instrument sufficiently duplicitous for the masters of the universe to object.

I was misinformed:

Startup chief executives are turning a cold shoulder to SPACs.

Skeptical CEOs say they are turning down offers from special-purpose acquisition companies, deleting their solicitous emails and tapping the brakes on merger deals amid nosediving shares and disappointed investors.

So-called blank-check companies, which go public with no assets and then merge with private companies, exploded in popularity last year as a mechanism for startups to raise a lot of money with more speed and fewer regulatory hurdles than a traditional initial public offering.

Startup chief executives are turning a cold shoulder to SPACs.

Skeptical CEOs say they are turning down offers from special-purpose acquisition companies, deleting their solicitous emails and tapping the brakes on merger deals amid nosediving shares and disappointed investors.

So-called blank-check companies, which go public with no assets and then merge with private companies, exploded in popularity last year as a mechanism for startups to raise a lot of money with more speed and fewer regulatory hurdles than a traditional initial public offering.

………

Among 44 technology startups that completed a SPAC deal from the start of 2020 through this past April, share prices have on average fallen 12.6%, according to data provided by Minmo Gahng and Jay Ritter, public-stock researchers with the University of Florida. More than half of the tech stocks declined more than 20%. The research is based on the share closing price on May 17.

………

Enthusiasm for SPACs waned after the U.S. Securities and Exchange Commission announced new accounting mandates last month and stepped up scrutiny of other SPAC practices. Another deterrent for startups is mounting litigation from stock traders against SPACs, alleging conflicts of board members, breaches of fiduciary responsibilities and misleading statements, among other things. Some fund managers said they have put a moratorium on new SPAC investments, and one San Diego-based family office, Sky and Ray, said since last year it has slashed its SPAC holdings to five from 104. 

This is the first time in a long time that I’ve heard of a Wall Street scam falling from favor because the intended pigeons came to their senses before it all collapsed.

It’s not the beginning of the end for Wall Street as casino, but perhaps, it is the end of the beginning.

H/T Naked Capitalism

Why Cap and Trade Sucks

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At the core of Cap and Trade carbon controls is trading of tax credits, and the creation and trading of tax credits is a function which actively encourages fraudulent behavior. 

Case in point is the Massachusetts Audubon Society, which announced its intention to log thousands of acres that it was preserving in western Massachusetts so that it could then sell credits for not chopping down the trees.

Of course, it never actually intended to chop down these cheese, this was just a way to create carbon credits that had no basis in reality, and then sell them to polluting business, with no actual reduction in emissions.

In addition to the Mass Audubon Society, the Nature Conservancy is notorious for its sale of meaningless carbon offsets:

The Massachusetts Audubon Society has long managed its land in western Massachusetts as crucial wildlife habitat. Nature lovers flock to these forests to enjoy bird-watching and quiet hikes, with the occasional bobcat or moose sighting.

But in 2015, the conservation nonprofit presented California’s top climate regulator with a startling scenario: It could heavily log 9,700 acres of its preserved forests over the next few years.

The group raised the possibility of chopping down hundreds of thousands of trees as part of its application to take part in California’s forest offset program.

Spoiler, the never intended to log this land.  They are engaging in a humbug.

The environmental organization has become a bunch of snollygosters.

………

The Air Resources Board accepted Mass Audubon’s project into its program, requiring the nonprofit to preserve its forests over the next century instead of heavily logging them. The nonprofit received more than 600,000 credits in exchange for its promise. The vast majority were sold through intermediaries to oil and gas companies, records show. The group earned about $6 million from the sales, Mass Audubon regional scientist Tom Lautzenheiser said.

On paper, the deal was a success. The fossil fuel companies were able to emit more CO2 while abiding by California’s climate laws. Mass Audubon earned enough money to acquire additional land for preservation, and to hire new staff working on climate change.

But it didn’t work out as well for the climate, unless Mass Audubon actually intended to start acting more like a timber company. The project wouldn’t achieve anywhere near the claimed levels of reduced carbon emissions if the nonprofit was getting credits for forests that were never in danger of aggressive logging. And every time a polluter uses a credit that didn’t actually save a ton of carbon, net emissions go up, undermining the point of the program.

………

New research by the San Francisco nonprofit CarbonPlan provides evidence that this is occurring: It shows that landowners in the program routinely maximize the number of trees they assert they could chop down if they weren’t given carbon credits, even if they have little history of logging or have mission statements in sharp opposition to such practices.

The research suggests the program could be significantly exaggerating the amount of carbon savings achieved.

“The nearly universal pattern we see in the data,” said Danny Cullenward, policy director at CarbonPlan and a coauthor of the study, corroborates concerns that “those projects are not delivering real climate benefits.”

(emphasis mine)

If you have direct tax on carbon, you eliminate this sort of fraud, what’s more you can treat the carbon tax in the same way that a value added tax is, and refund upon export, and charge upon import, so as to make sure that bad actors on global warming don’t get an effective subsidy for that bad behavior.

A Perfect Metaphor for American Startup Culture

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It should surprise no one that gypsy cab company Uber is less of a ride sharing company than it is an exercise in fraud. 

By this, I don’t mean that it has no path to profitability (though it doesn’t), I mean that Uber, and WeWork, DoorDash, and pretty much the entire investment portfolio of Softbank is an attempt to generate buzz through a massive infusion of capital, followed by an IPO that offloads the company to suckers.

It seems to me that in addition to those startups, the management of Softbank should be frog-marched out of their offices in handcuffs when the reckoning comes.

It also turns out that Uber is an example of particularly extreme financial engineering:

Uber is not a business in the traditional sense. It’s a “bezzle” (“the magic interval when a confidence 

trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it”).

The only reason Uber was able to attain growth was because investors gave it billions to lose. First, it was the Saudi Royals, hoping to spend their way to a transportation monopoly.

When that didn’t work, the company’s investors suckered the public into taking their shares off their hands in an IPO premised on two things:

  1. Self-driving cars

  2. All buses and subways in the world being scrapped and replaced with Ubers.

Neither of those things have happened, of course. Uber actually had to pay someone else $400m to “buy” the self-driving car division it sank $2.5b into (the resulting cars could not travel for one mile without a serious accident).

………

Uber’s “innovation” wasn’t self-driving cars. It was cheating. Uber is really f%$#ing good at cheating.

How good? Well, last year, Uber managed to dodge tax on $6b in global revenues by laundering its income through fifty Dutch shell companies.

………

It’s quite a whirlwind of socially useless financial engineering, composed of obvious frauds like “selling” its IP to a Dutch subsidiary financed with a $16b “loan” from a Singaporean subsidiary, garnering 20 years‘ worth of $1b annual tax credits.

The Netherlands may be a bastion of progressive politics, but it’s also one of the world’s leading onshore-offshore tax havens, joining Cyprus, Luxembourg, Delaware, Wyoming and the City of London as a key player in the global money-laundry.

Our multinational financial system is one big case of, “If fraud can happen, it will already have happened.”

If we actually enforced the tax and fraud laws, there would be millions of people nationwide who would be in the dock right now.

My Heart Bleeds Borscht

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Elizabeth Holmes’ lawyers are desperately trying to hide her extravagant lifestyle from the jury, because they know how poorly this will fare with a jury.

Needless to say, the prosecution wants to include this information, both because it would make the jury hostile to her, and because it goes to motive.

I’m rooting for the prosecution:

Attorneys for Theranos Inc. founder Elizabeth Holmes sparred with federal prosecutors Thursday over whether details of the wealth, fame and perks she attained as chief executive would be relevant to jurors at her coming criminal fraud trial.

“What she wore, where she stayed, how she flew, what she ate—has nothing to do with this trial,” Kevin Downey, an attorney for Ms. Holmes, said in federal court in San Jose, Calif.

Ms. Holmes is facing a trial in late August on charges of wire fraud and conspiracy to commit wire fraud for alleged misrepresentations she made about Theranos’s blood-testing technology.

………

U.S. District Judge Edward Davila said Thursday he had concerns about whether prosecutors could talk about the popularity Ms. Holmes obtained as CEO along with perks such as the use of a private jet and stays in fancy hotels. Ms. Holmes was once worth $4.5 billion on paper. Mr. Downey said in court she received a salary of a “couple hundred thousand dollars a year,” which he said was probably less than many of her peers.

………

“The point here is the so-called success of Theranos was entirely the product of a fraud,” Assistant U.S. Attorney John Bostic said in court, arguing that details about her lifestyle are relevant because they can help show Ms. Holmes’ motive.

………

Attorneys for Ms. Holmes argued this week that jurors could unfairly view the violations found by the Centers for Medicare and Medicaid Services and Food & Drug Administration as proof that Ms. Holmes is guilty.

“The jury could convict based on violation of a regulation, that’s the danger,” Jean Ralph Fleurmont, a Williams & Connolly attorney representing Ms. Holmes, told the judge.

Ummm ……… That Theranos, and hence Holmes, was knowingly violating regulations goes to the heart of the fraud.

The fact that she repeatedly violated goes to intent, particularly when she threatened people who notified of her of problems.

Prosecutors said Ms. Holmes regularly cited Theranos’s compliance with federal standards to the press and in board meetings, making it relevant. The fact that they weren’t complying with industry standards is “a brick in the wall” that helps show the company’s tests “were not accurate or reliable,” assistant U.S. Attorney Robert Leach said.

I think that Elizabeth Holmes should be treated fairly and equally, by which I mean that she should be treated like a random minority accused of low level bunco.

So Much for the Unfettered Free Market

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 It turns out that former FCC Chair Ajit Pai’s promises of a brave new world of competition and performance increases and price drops when ISPs were released from burdensome regulation.

Instead, prices continued to rise unabated, and there was no meaningful improvement in performance.

Not a surprise.  The broadband industry is about extracting monopoly rents, and deregulation increases their ability to extract the aforementioned rents:

The average US home-Internet bill increased 19 percent during the first three years of the Trump administration, disproving former Federal Communications Commission Chairman Ajit Pai’s claim that deregulation lowered prices, according to a new report by advocacy group Free Press. For tens of millions of families that aren’t wealthy, “these increases are felt deeply, forcing difficult decisions about which services to forgo so they can maintain critical Internet access services,” Free Press wrote.

The 19 percent Trump-era increase is adjusted for inflation to match the value of 2020 dollars, with the monthly cost rising from $39.35 in 2016 to $47.01 in 2019. Without the inflation adjustment, the average household Internet price rose from $36.48 in 2016 to $46.38 in 2019, an increase of 27 percent.

The nominal increase in each of the three years was between 7.27 percent and 9.94 percent, while inflation each year ranged from 1.81 percent to 2.44 percent.

“That means the nominal increase in broadband bills was more than four times the rate of inflation during those three years,” Free Press said. The report is based on the Bureau of Labor Statistics (BLS) Consumer Expenditures Survey data, which does not yet include 2020.

………

“[B]roadband prices consistently increase faster than the rate of inflation while the providers’ own costs do not. This makes this increasingly critical infrastructure service both more expensive in real terms to users and more profitable for the ISPs,” the report said.

Capital investment by Internet providers has dropped, “with substantial declines at large companies like AT&T (where 2020 investment was 52 percent below the 2016 total for the company on an inflation-adjusted basis) and Comcast (where 2020 cable segment investment was 22 percent below 2016’s level on an inflation-adjusted basis),” the report said.

In a press release, Free Press said that ISPs “grew their profits to record levels before and during the COVID-19 pandemic by increasing their prices during an unprecedented economic downturn,” and that “low-priced entry-level options for high-speed Internet service are disappearing, raising the adoption barrier for low-income families.”

The entire narrative that has driven the overpriced and under-performing connectivity situation is a lie.

Pass the Popcorn

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The  Executive Office for United States Trustees, a division of the Department of Justice tasked with overseeing bankruptcy proceedings in the United States, just unleashed a huge can of whup-ass on Wayne LaPierre and the NRA.

It isn’t often that you hear terms like, “Failed to provide the proper oversight,” “Personal expenses were made to look like business expenses,” and that their regulatory issues with the New York AG are, “Not a legitimate reason for filing bankruptcy.”

It’s extremely rare for the trustee to say things like this, or to call for a bankruptcy to be halted, or to call for appointing a trustee.

The NRA is in a world of hurt, and if there is any justice in this world, Wayne LaPierre will end up sharing a cell with Matt Gaetz and Roger Stone.

The National Rifle Association’s hopes of end-running a legal challenge in New York were dealt a serious blow on Monday when a Justice Department official rebuked its leadership and called for the dismissal of its bankruptcy filing or the appointment of an outside monitor to oversee its finances.

Lisa L. Lambert, a lawyer in the United States Trustee’s office, which is part of the Justice Department, said the “evidentiary record clearly and convincingly establishes” that Wayne LaPierre, the longtime N.R.A. chief executive, “has failed to provide the proper oversight.” For a number of years, she added, “the record is unrefuted that Wayne LaPierre’s personal expenses were made to look like business expenses.”

Mr. LaPierre and the N.R.A. had filed for bankruptcy not because of any financial distress, but as a strategy to avoid litigation in New York, where the attorney general, Letitia James, is seeking to shut down the organization and claw back millions of dollars in allegedly misspent funds from Mr. LaPierre and three other current or former executives.

………

“The N.R.A. is in real trouble,” said Adam J. Levitin, a professor specializing in bankruptcy at Georgetown University. “The U.S. Trustee rarely gets involved in this sort of motion, much less urges dismissal, a trustee or an examiner. I cannot see an outcome where the N.R.A. comes out unscathed. I think the real issue is what remedy the judge grants.” 

John Pottow, who teaches bankruptcy at the University of Michigan Law School, called the trustee’s intervention “a glaring signal of profound dysfunction” at the N.R.A., adding that such an intervention by the trustee “doesn’t happen very often.”

“The N.R.A. has stated that it is seeking refuge from the New York attorney general’s actions and wishes to change its state of incorporation,” she added. “That can be done outside of bankruptcy. It is not a legitimate reason for filing bankruptcy.”

Shut them down, take their domain names, and take their mailing and donor lists.

Don’t allow LaPierre to resurrect his scam under a different name.

The ammosexuals community will doubtless find another outlet for their political priorities, after all, they have won the war against common sense gun laws for a generation, but at least that new organization won’t rob them blind.

It’s the Fraud, Stupid

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woah exhibit 16. more Facebook docs quietly unsealed yesterday – it gets worse. A full, damning senior execs’ email thread (CFO, COO) unsealed. Facebook slowed unsealings in this fraud case and spun it as “cherrypicking.”
Top marketing exec, Carolyn Everson, weighs in here. /1 pic.twitter.com/Zn51XNcKxn

— Jason Kint (@jason_kint) April 25, 2021

It’s Called Fraud

As I have noted a few times, any in depth examination of Facebook would reveal systematic fraud. 

Recently revealed emails uncovered in the fraud lawsuit against the social media network show Facebook was deeply aware that it was providing false information to advertisers, which seems to be a slam-dunk case of fraud.

Both Mark Zuckerberg or Sheryl Sandburg are famously “Hands On”, and this is at the core of their business.

They knew that they were defrauding advertisers, and they took their money anyway:

Carolyn Everson, one of Facebook’s most senior advertising executives, said the company had to “prepare for the worst” over claims that it overstated the potential reach of its advertisements, according to newly released court filings.

The world’s largest social network has been fighting a class-action lawsuit in California since 2018 over claims that its figure for its “potential reach”, which told advertisers how many people saw their ads, included duplicate and fake accounts.

Facebook has argued that the numbers were only estimates and that advertisers are charged for actual clicks and impressions, rather than for the potential reach of an ad.

But according to filings in the lawsuit that were unredacted over the weekend, Everson, the vice-president of Facebook’s global business group, wrote an email in 2017 that said the metric “clearly impacted [advertisers’] planning”.

“We are going to get really criticized for that (and justifiably so),” she said. “If we overstated how many actual real people we have in certain demos, there is no question that impacted budget allocations. We have to prepare for the worst here.”

………

The lawsuit, which was filed in northern California in 2018 by a small-business owner, alleges that Facebook executives knew the potential reach figure was “misleading” and took no action to correct it in order to “preserve its own bottom line”.

It points to research showing Facebook had suggested potential reach in certain US states and demographics that was greater than the actual populations in those geographies.
A Financial Times investigation in 2019 found similar discrepancies in Facebook’s ads manager, an online tool to help advertisers build campaigns, even though the company made some changes to its potential reach definition earlier that year.

They knew that the metrics were complete crap, and they tried to bury the information and continued to use the bad data to get paid.

Break out the cuffs, Ponch.

Headline of the Day

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This Is the Most Embarrassing News Clip in American Transportation History

—Vice Magazine on Elon Musk’s recent video of how its Vegas tunnel “works”.

Seriously, this is literally the Disney ride “Autopia” at about twice the speed of the original.

This is not transportation, it’s not even a demonstrator of the technology.  This is a rip-off of a Disney ride by the greatest humbug of our generation.

But The Boring Company’s cost per mile isn’t as impressive as it sounds. This project avoided all the expensive parts of a mass transportation tunnelling project. The station is a big hole in the ground with a flat parking lot and doesn’t have pedestrian entrances, walkways, platforms, mezzanines, etc. The tunnel itself is also very skinny. But most importantly, tunnelling itself is never the part of American mass transit projects that create the cost overruns, which is why on-street and elevated rail projects also cost way more in the United States than elsewhere. In other words, The Boring Company avoided the most complex and costly aspects of transportation projects, shrunk it in both scale and the number of people it will supposedly serve, then bragged about how little it cost to build.

Nope, Nothing Dodgy Here

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Have you heard about SPACs? (AKA, “Blank check companies.”

The short version is that they are shell companies created to raise capital to take other companies public.

The SPAC issues shares, raises money, and then buys a company, taking the target public.

If this sounds dodgy, as in, “Why don’t those companies go public on their own?” you are right.

The answer is, as far as I can tell, evading regulations and increasing the opacity of the investment, since there is no SEC due diligence and the like.

Their rates of returns to investors suck, as they are typically a number less than 0, a loss, though the managers make bank, and I suppose money launderers are OK with taking the hit.

As such, it is not surprising that the SEC has opened an investigation into the recent explosion of these arcane financial instruments:

The U.S. securities regulator has opened an inquiry into Wall Street’s blank check acquisition frenzy and is seeking information on how underwriters are managing the risks involved, said four people with direct knowledge of the matter.

The U.S. Securities and Exchange Commission (SEC) in recent days sent letters to Wall Street banks seeking information on their special purpose acquisition company, or SPAC, dealings, the four people said.

………

The SEC, which declined to comment for this story, has previously said it was monitoring the SPAC boom, but the letters are the strongest sign yet that it is stepping up scrutiny of such deals and the Wall Street banks that underwrite them.

………

Wall Street’s biggest gold rush of recent years, SPACs have surged globally to a record $170 billion this year, outstripping last year’s total of $157 billion, Refinitiv data showed.

………

Investors have sued eight companies that combined with SPACs in the first quarter of 2021, according to data compiled by Stanford University. Some of the lawsuits allege the SPACs and their sponsors, who reap huge pay-days once a SPAC combines with its target, hid weaknesses ahead of the transactions.

Hiding weakness ahead of the transactions is the PURPOSE of SPACS.

BTW, if you are wondering just how dodgy this whole mess is, look no further than WeWork, whose IPO infamously collapsed on insider looting and misleading accounting.  They now intend to go public via merging with a SPAC: 

Even though WeWork has long lost billions of dollars, it always found ways to attract huge investments from deep-pocketed investors. Now, less than two years after it was rescued from a collapse, the co-working company has found yet another backer willing to overlook its losses.

The company announced on Friday that it had agreed to merge with a blank-check firm in a deal that would give it a listing on the stock market it was denied when it was forced to shelve an initial public offering as investors questioned its financial strength and dubious governance practices.

Instead of a traditional I.P.O., WeWork is merging with BowX Acquisition, a company listed on the stock exchange for the sole purpose of buying a business, in a type of deal that has become hugely popular in recent months. Investors, bankers, and even celebrities and athletes have rushed to float such special purpose acquisition companies, or SPACs, because they offer their creators a chance to mint huge profits relatively quickly. And merging with these vehicles is attractive to companies like WeWork because they provide an express lane onto the stock market without the obstacles that scuttled WeWork’s public offering in September 2019.

“Obstacles,” what a quaint way to describe flagrant fraud and misrepresentation.

This is yet another way for Wall Street to steal from you,

How Convenient

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It turns out that Purdue Pharmaceuticals conducted an in-depth probe of the Sackler family, but they are refusing to release the results. 

If the results exonerated anyone, they would been in a press release:

Purdue Pharma, the maker of Oxycontin, conducted what may be the most extensive investigation yet of the Sackler family, exploring whether they committed crimes or financial improprieties, but the company has kept most of its findings secret.

In a bankruptcy filing late Monday, the drugmaker acknowledged hiring attorneys, forensic accountants and other financial experts to probe members of the family who own the company and profited billions from opioid sales.

According to the filing, the team searched for evidence of wrongdoing by the family, reporting to a special committee of Purdue’s board between April 2019 and earlier this month.

Yet in its filing, Purdue Pharma chose to reveal almost nothing of what investigators uncovered, a decision that infuriates opioid activists and some government officials.

“They’re still trying to cover up the facts,” said Massachusetts Attorney General Maura Healey, who has sued the company and it owners, in a statement.

“Purdue’s disclosure filing says it paid its lawyers for a 22,000-hour investigation of the Sacklers, but it doesn’t disclose any of their findings,” she added.

First, the Sacklers decided to become drug pushers, and when they got caught, the Sacklers decided to loot the company before declaring bankruptcy. 

Once again, I think that the best way to deal with this is to apply the Billy Ray Valentine principle, “You know, it occurs to me that the best way you hurt rich people is by turning them into poor people.”

The Grift is Strong in These Ones

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It turns out that the Trump family tradition of exploiting charities for personal gains even extends to rescue dogs. 

In this case, it’s Eric’s wife Lara, who has diverted millions of dollars to the Trump organization from Big Dog Ranch Rewsuc Rescue.

It’s pretty cold to steal from rescue dogs.

On the bright side, it probably means that her campaign for US Senate is dead before it even started:

A dog rescue charity that has links to Lara Trump, the former president’s daughter-in-law, has spent almost $2m at Trump properties in the last seven years, according to US media reports.

While other companies and groups have distanced themselves from the Trumps since the 6 January attack on the capital, the Florida-based Big Dog Ranch Rescue is expected to spend another $225,000 at Donald Trump’s Mar-a-Lago country club for an event this weekend, according to a permit filed with the town of Palm Beach, which was reported by HuffPost.

………

HuffPost reported that Internal Revenue Service (IRS) filings show that the charity has spent as much as $1,883,160 on fundraising costs for events at Mar-a-Lago and a nearby Trump golf course since 2014. Lara Trump, who is married to Eric Trump, has been a chairwoman for charity events since 2018.

Donald Trump’s Trump Foundation, which was dissolved in 2019, and Eric Trump’s Eric Trump Foundation are known to have used money from donors for events and other expenses at Trump properties. Donald Trump admitted in court documents that he used charity money to buy a portrait of himself.

They really are a repulsive lot, aren’t they?

It’s Called Pleading the Belly, and it is Bullsh%$

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In the latest twist in Theranos founder Elizabeth Holmes efforts to evade justice, she is now trying to delay the trial because she is pregnant.

Tis is not an uncommon legal strategy, it’s called “Pleading the Belly”, which has its own Wikipedia page. 

I rather fear that her privilege is going to win out again.

The alleged Theranos fraudster Elizabeth Holmes is pregnant, according to a new court filing, potentially delaying her trial by several weeks.

Holmes is being charged with fraud for her role at the helm of Theranos, a blood-testing startup that was a rising star in Silicon Valley before it emerged it had misrepresented the effectiveness of its technology.

Lawyers for Holmes asked the judge on 2 March to delay the start of jury selection to 31 August, after her due date.

“The parties have met and conferred, and both parties agree that, in light of this development, it is not feasible to begin the trial on July 13, 2021, as currently scheduled,” said the filing.

There is no reason to delay jury selection.

Absent her being in active labor, pregnancy does not prevent a defendant from participating in jury selection or in the pretrial motions.

Were she not white or rich (her parents come from money), she’d be waiting in jail for the trial to start.

Not Enough Bullets

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Peter Diamandis, a tech entrepreneur who seems to won every single game of bullsh%$ bingo that he has ever played, just topped himself.

He held a conference that doubled ad a Covid-19 superspreader event, and then he tried to convince people to buy his quack cures. 

No charges, of course, because nothing is a crime any more if you are rich:

In late January, tech impresario Peter Diamandis hosted an exclusive, indoor conference for a group of ultra-wealthy patrons in Los Angeles. As MIT Technology Review reported last month, the get-together, where no masks were required, became a covid-19 superspreader event.

Four days later, as staff, speakers, and attendees began testing positive for the virus, an email went out to those who had taken part. It invited them to join an “informational webinar” featuring a doctor who had been at the event—an attempt to put their minds at ease.

Diamandis had held the Abundance 360 Summit, or A360, in violation of a ban on private gatherings during a covid surge. At least 86 people were present, some having flown in from around the world; many had paid $30,000 in assorted fees for the privilege of attending in person. Everyone was tested daily, but the virus took hold nonetheless, and at least 32 people contracted covid either directly or indirectly as a result of the four-day program.

The webinar on January 30 featured Matt Cook, a trained anesthesiologist from the San Francisco Bay Area who had started a medical practice using alternative therapies. A follow-up email sharing the URL to view a recording of the call was accompanied by an order form for products from Fountain Life, a company focused on longevity treatments, of which Diamandis is a cofounder and director.

Between the webinar and the Fountain Life order form, attendees were told about a range of products that were claimed to either treat covid-19 or prevent it outright. What they were not told was that seven of the recommended products were also classified by the US Food and Drug Administration as “covid-19 fraudulent.”

The fraudulent cures included amniotic fluid, the liquid that surrounds a baby in utero and is rich in stem cells, and colloidal silver, a suspension of metal particles often touted as having antimicrobial effects, but which the FDA has said “is not safe or effective for treating any disease or condition.” Cook recommended taking both of them as an inhaled mist using a nebulizer, an electric machine similar to an asthma inhaler.

In a more enlightened time, this guy would be in jail awaiting trial. 

If it were just the rich people who were exposed, I would not be outraged, but you have to figure that a lot of people who caught this were ordinary Joes who were bartending, serving canapes, and generally submitting to the whims of said rich folks.

Why Facebook is Freaking Out Over Apple

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About 7 months ago, I mentioned that a Dutch broadcaster turned off tracking ads, and went with simple contextual ads, and earned more money.

Contextual ads are, for example, you read a story and the ads are based on what you are reading, so if you were looking as sports, you would get ads for beer, and if you were looking at barbecue recipes, you would get ads for beer, and if you were reading a story about a heat wave, you would get ads for beer. 

Tracking ads, on the other hand will look at everything that you have done in the past 18 months, and determine that because you looked at sports, barbecue, and the weather, you get served an add for beer. (all ads lead to beer, but that is another post)

The reason that tracking ads are more popular these days is because they are supposed to get higher response rates..

Certainly, that is what the incumbents, like Facebook and Google want you to think, because if contextual ads work just as well, then pretty much anyone can go into the online ad business, and Google and Facebook can no longer slurp up most of the revenue

This is why Facebook is going nuclear about Apple’s new privacy policies, which will require an explicit opt-in for tracking.

It’s not because they would lose a whole lot of money with this, they would still sell ads, but because this is a massive A/B test on the internet giant’s business model.

If advertisers find that non tracking ads work just as well, or nearly so for less money, they will switch to non-tracking ads.

This is why we have leaked emails in which Mark Zuckerberg states that, “We need to inflict pain,” on Apple.

I’m inclined to believe that Mark Zuckerberg already knows that the ad tech he sells is a lie, and the emperor does not wish to reveal his sartorial choices.

All this is a long way around to seeing that we now have another data-point in addition to the Dutch broadcaster NPO, we also have the New Zealand news site Stuff, which has abandoned Facebook to no effect. (They did so because of Facebook’s irresponsibility both before and after the Christchurch shootings)

The short version, (video below) is that Stuff cut advertising spending on Facebook with, “No traffic impact at all,” and since they stopped posting on Facebook, they have been unable to tease out any impact on traffic.

Video below:

Manchin to Support Haaland for Secretary of the Interior

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After publicly playing Hamlet for a few days, Joe Manchin (DINO-WV) has announced that he will support the nomination of Deb Halland as Secretary of the Interior.

Why her, she participated in protests against the Keystone XL pipeline, which as a VERY pro fossil fuel Senator from a coal state he should find even more unsettling than a few mean Tweets about Republicans made by Neera Tanden.

The idea that only CEO contributes to a company’s growth and not all employees is really pernicious https://t.co/2d9xgU0IHJ

— Neera Tanden (@neeratanden) August 27, 2016

Pretty mild, actually

It turns out that Manchin is probably lying about his reason to oppose Tanden.

It seems that his daughter, Heather Bresch, academic fabulist and CEO of Mylan Pharmaceuticals, was criticized by Tanden for raising her own pay while gouging consumers for the Epipen® anaphylaxis treatment

This would not be the first time that Manchin has used his official position to benefit his daughter. His finger prints are all over an effort to get Bresch an MBA degree that she did not earn. 

So Joe Manchin’s actions here are even more stupid, sordid, and corrupt than I had previously imagined.

Still no sympathy for Ms. Tanden though.  She’s a hack and a psychopath, and she shut down a publication in response to unionization, so am firmly of the belief that she should not be kitchen staff supervisor* at the White House, much less director of the OMB.

*It’s a reference to the comic book Cerebus the Aardvark.