Posts with «society & culture» label

US prosecutors are reportedly investigating FTX founder Sam Bankman-Fried for fraud

US federal prosecutors could be building a fraud case against FTX founder and former CEO Sam Bankman-Fried. Bloomberg reports Justice Department officials met with the crypto exchange’s bankruptcy team this week to discuss documents investigators aim to obtain from the company.

The meeting included prosecutors from the Southern District of New York, Assistant US Attorney Roos, agents from the Federal Bureau of Investigation, and lawyers from FTX. Roos, notably, was involved in the prosecution of Nikola founder Trevor Milton, who was convicted of misleading investors earlier this year. According to Bloomberg, potential charges were not discussed at the meeting that occurred this week.

The Justice Department is “closely” examining whether FTX improperly transferred hundreds of millions of dollars around the time the company declared bankruptcy on November 11th. It’s also probing whether the exchange broke the law when it moved funds to sister company Alameda Research.

In his recent New York Times interview, Bankman-Fried denied knowingly misusing customer funds. “Clearly, I made a lot of mistakes. There are things I would give anything to be able to do over again,” he said. “I did not ever try to commit fraud on anyone.” He will testify before the House Committee on Financial Services next week, a panel that will also include testimony from FTX’s current CEO, John J. Ray III. Ray has accused Bankman-Fried of making “erratic and misleading public statements” about FTX.

Former Theranos COO Sunny Balwani sentenced to 12 years and 11 months in prison

Ramesh “Sunny” Balwani, Theranos’ former chief operating officer, has been sentenced to nearly 13 years in prison. Balwani was found guilty of all charges in a trial earlier this year that charged him with defrauding the blood testing startup’s patients and investors.

Of note, his sentence is slightly longer than the 11-year and three month sentence given to Elizabeth Holmes, the former CEO of Theranos. Ahead of his sentencing, Balwani’s legal team had asked for probation or house arrest, The Wall Street Journal reported. A probation officer had recommended a nine-year sentence, while prosecutors wanted 15 years in prison.

Balwani will also have to pay restitution, though the amount hasn't yet been set. He is due to surrender March 15th.

Unlike Holmes, who was not convicted on seven out of 11 total fraud charges in her trial, Balwani was convicted of defrauding Theranos patients in addition to the company’s wealthy investors. As COO, Balwani oversaw the operations of the company’s troubled laboratory, and prosecutors argued that he had detailed knowledge of problems with its blood tests and the risk they posed to patients.

Though Balwani never rose to the same level of fame as his former partner during his time at Theranos, his relationship with Holmes has played heavily into the intrigue surrounding the company’s downfall. Holmes and Balwani’s relationship featured prominently in The Dropout, a Hulu miniseries about Theranos, and text messages between the two were read aloud in both trials. 

When Holmes took the stand in her own defense, she said Balwani had been abusive, and had misled her about issues in the company’s lab. 

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NLRB says Apple violated federal law with anti-union meetings in Atlanta

Apple violated federal law by holding mandatory "captive audience" meetings and making coercive statements with anti-union messaging, the National Labor Relations Board's (NLRB) Atlanta regional director has concluded. The workers at Apple's Cumberland Mall store filed for a union election with the NLRB earlier this year in a bid to join the Communications Workers of America (CWA). In May, however, they withdrew their petition, and the CWA submitted an Unfair Labor Practice complaint on their behalf. 

The CWA said in its complaint at the time that Apple had "conducted mandatory 'captive audience' meetings with bargaining unit employees regarding the upcoming election." In a newer statement sent to Bloomberg, the organization said that holding meetings like that is "not only union-busting, but an example of psychological warfare." As the news organization notes, the NLRB had previously allowed companies to require employees to attend mandatory meetings prior to union elections. But Jennifer Abruzzo, the labor board's current general counsel, sees them as coercive and in violation of the law. 

The NLRB said that it will issue a complaint if the tech giant doesn't settle. While the labor board's regional director has sided with the workers and with CWA, it's still up in the air whether Apple will be required to change its policies or suffer any sort of punishment. Complaints issued by regional directors will have to go through the board's judges, and companies could approach the NLRB's board members in Washington to appeal rulings they hand down. The case could go to federal court after that. 

Apple is facing another complaint by the NLRB, which found enough merit in a report also filed by the CWA on behalf of the company's World Trade Center workers in NYC. For that particular case, Apple was accused of surveilling staff, limiting their access to pro-union fliers and forcing them to listen to anti-union speeches. If Apple doesn't settle, a judge will hear the case on December 13th. 

Judge dismisses indictment against Huawei exec Meng Wanzhou

More than four years after her arrest, the drawn-out legal saga of Huawei Chief Financial Officer Meng Wanzhou came to a formal end this week. On Friday, US District Judge Ann Donnelly dismissed an indictment against Meng, according to Reuters. On behalf of the US, Canadian authorities arrested Meng in 2018 for allegedly violating American sanctions against Iran. Meng, who is also the daughter of Huawei founder and CEO Ren Zhengfei, spent the next three years fighting attempts to extradite her to the US, where she faced up to 30 years in prison for bank and wire fraud charges. Donnelly dismissed the indictment “with prejudice,” meaning the Justice Department can’t bring the same charges against Meng again.

Before entering into an agreement with US prosecutors last year, Meng spent three years under house arrest. The detainment strained relationships between the United States and China and led to an international incident. China apprehended two Canadians, Michael Spavor and Michael Kovrig, within days of Meng’s arrest. They were later released after Meng entered into a deferred prosecution agreement with the Justice Department. As part of the agreement, she acknowledged having made false statements about Huawei’s business in Iran. Meng flew home to China the day Donnelly approved the pact.

Huawei and its subsidiaries are still facing charges in the US. Most notably, the Justice Department recently announced charges against two Chinese spies who had allegedly tried to interfere in a criminal investigation into the company. Earlier this week, the FCC also banned telecom and video surveillance equipment from Huawei, among a handful of other Chinese companies. Meng currently serves as the company's rotating chairperson and deputy chairwoman, as well as CFO. 

Crypto cammer faces 18 months in prison over $22 million SIM attack

A young man is facing time behind bars for his role in a high-profile crypto scam. Bloombergreports a federal judge has sentenced 25-year-old Nicholas Truglia to 18 months in prison for allegedly taking part in a scheme that stole $22 million in cryptocurrency from blockchain adviser Michael Terpin in 2018. The perpetrators are said to have asked Truglia to convert Triggers tokens stolen from Terpin into Bitcoin after breaching the consultant's phone.

Truglia has been described as a member of a larger criminal group that relied heavily on SIM swapping, or transferring victim phone numbers to SIM cards under attackers' control, to rob crypto industry personalities. Terpin accused a New York State teen of leading the group following a private investigation and successfully recouped some of his losses. The teen pointed to Truglia and two other people as accomplices.

Truglia is the only person in the group subject to criminal charges, and is already facing civil penalties near $80 million for his alleged involvement. The relatively light sentence appears to have been influenced by Truglia's autism, which defense attorney Jeffrey Udell claimed made it harder to understand the real-world consequences of the theft.

This is far from the largest crypto heist in recent memory. State-backed hackers and online gangs have been linked to thefts worth hundreds of millions of dollars from the blockchain. The length of the sentence is unlikely to deter others, for that matter. However, the sentencing theoretically sends a message that aiding crypto thieves is still a serious crime.

How Theranos founder Elizabeth Holmes was sentenced to 11 years in prison

More than seven years after the first Wall Street Journal story about problems with Theranos’ blood tests, its founder, Elizabeth Holmes, was sentenced to over a decade in prison for defrauding the company’s investors. She had been found guilty on four counts of fraud during a months-long trial where her lawyers argued that she was an inexperienced entrepreneur who hadn’t intended to mislead anyone.

Holmes’ story is, by now, well known. She founded Theranos as a college dropout, raising hundreds of millions of dollars from high-profile investors and courting former high-ranking government officials for her board. Since then, the rapid rise and downfall of Holmes and Theranos has taken on a life of its own, with major podcasts, books and a recent Hulu miniseries.

But Holmes herself has been almost completely silent. Her trial, where she testified in her own defense, and her sentencing are the only times she has spoken publicly about what went wrong at Theranos and how she feels all these years later. Watch the video above for the full story.

Protests break out at a major iPhone factory in China

Foxconn's largest iPhone factory in Zhengzhou, China has been hit by worker protests including violent confrontations, Bloomberg has reported. Videos show hundreds of workers marching and confronting a manager, along with several instances of violence. Employees are reportedly upset over COVID restrictions and bonuses, while a video seen by Engadget Chinese suggests a food shortage might have triggered the protests.

One clip shows workers shouting "Defend our rights! Defend our rights!" while confronting police, while another shows a group of employees surrounding a manager in a conference room. In the latter, one person says "I'm really scared about this place, we all could be COVID positive," while another adds "you are sending us to death." 

Other videos show white-suited individuals attacking someone with sticks, and workers surrounding and rocking an occupied police vehicle. In several clips, workers complained that they were never sure about receiving meals and about inadequate COVID protections. News agencies including Reuters have not yet verified the authenticity of some of the videos, though.

With continued COVID-19 outbreaks, Foxconn has implemented strict "closed loop" quarantine rules, forcing staff to work and live on-site, isolated from the outside world. "It's now evident that closed-loop production in Foxconn only helps in preventing COVID from spreading to the city, but does nothing (if not make it even worse) for the workers in the factory," a Hong Kong advocacy group told Reuters. Thousands of workers may have fled the factory campus, according to other employees, forcing Foxconn to offer bonuses and higher salaries to retain staff. 

Last month, Foxconn drastically reduced iPhone production at the same plant over COVID concerns, forcing Apple to announce that iPhone 14 Pro and iPhone 14 Pro Max shipments would be delayed. The company's Zhengzhou plant is the world's largest iPhone factory with 200,000 workers, responsible for 70 percent of production of the devices. 

Elizabeth Holmes sentenced to 11 years in prison on fraud charges

Elizabeth Holmes, the former CEO and founder of Theranos, has been sentenced to just over 11 years in prison for defrauding the investors of her blood testing startup. The sentence comes almost a year after Holmes was found guilty on four counts of fraud following a months-long trial.

Prosecutors had pushed for a 15-year sentence, while Holmes’ attorneys argued she should get no more than 18 months of house arrest. Her probation officer had recommended nine years, according to The New York Times.

Throughout the trial, Holmes’ lawyers tried to portray the Theranos founder as a young and inexperienced entrepreneur who hadn’t intended to deceive investors or the public. During her testimony, Holmes blamed many of Theranos’ problems on others at the company, including her former partner Ramesh “Sunny” Balwani.

She also testified that Balwani was abusive during their romantic relationship, and that he had misled her about what was happening in Theranos’ lab. Balwani, who as COO also oversaw day-to-day operations of the company’s lab, was found guilty on 12 counts of fraud in a separate trial earlier this year. His sentencing is due in December.

Even at her sentencing, Holmes proved she still has influential allies to defend her. Several Silicon Valley investors, including early Theranos backer Tim Draper, wrote letters of support urging the judge for a lighter sentence. New Jersey Senator Cory Booker also wrote in her support, asking the judge for “a fair and just sentence.”

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Feds charge Russians linked to the 'world's largest' pirated e-book library

US law enforcement isn't just interested in shutting down video pirates. The feds have charged two Russian nationals, Anton Napolsky and Valeriia Ermakova, for allegedly running the pirate e-book repository Z-Library. The site was billed as the "world's largest library" and held over 11 million titles, many of which were bootleg versions stripped of copyright protections.

The pair was arrested in Cordoba, Argentina at the US' request on November 3rd. The American government disabled and seized the public Z-Library site at the same time. Napolsky and Ermakova each face charges of copyright infringement, money laundering and wire fraud.

As TorrentFreakexplains, it's not clear how central Ermakova and Napolsky were to Z-Library. While the indictments only cover activity starting in January 2018, FBI Assistant Director-in-Charge Michael Driscoll said the two had been running a pirate site for "over a decade." Z-Library is still accessible on the dark web and responding to email.

The pirate bookshelf's social media presence contributed to its undoing. Ars Technicanotes The Authors Guild complained to the Office of the United States Trade Representative after a "#zlibrary" hashtag started trending on TikTok, with over 19 million views. Students and other users were touting Z-Library as a way to get textbooks and other course material for free.

As with many pirate site shutdowns, this isn't likely to be a permanent blow. The Authors Guild pointed to alternatives like Libgen when it filed its complaint, and Z-Library itself is carrying on in a limited form. It's a high-profile victory for the anti-piracy camp, however, and suggests that other digital book pirates could face similar legal action.

SpaceX employees who were fired after criticizing Elon Musk file NLRB complaint

Eight former SpaceX employees said they were illegally fired for penning a letter criticizing Elon Musk have filed an unfair labor practice complaint against the company, according to The New York Times. If you'll recall, The Times reported back in June that SpaceX fired employees involved in writing an open letter condemning Elon Musk's "harmful Twitter behavior." In particular, they were referencing how the CEO made crude jokes on Twitter about a sexual misconduct accusation against him by a flight attendant for the company's corporate jet. SpaceX paid $250,000 to settle with the flight attendant, who claimed that Musk offered to buy her a horse in exchange for sex acts. 

Apparently, nine workers lost their jobs over the letter, and the charges were filed with the National Labor Relations Board (NLRB) for eight of them. "Elon's behavior in the public sphere is a frequent source of distraction and embarrassment for us," part of the letter read. The people who penned the letter also included proposals on how to make the company better and how to strengthen its sexual harassment policies, including the suggestion that SpaceX should disclose any other harassment claims against Musk.

SpaceX executives were reportedly sympathetic in the beginning and seemed like they were receptive to the ideas the workers included in the proposals. However, they quickly changed their tune. SpaceX president and COO Gwynne Shotwell told employees in a letter back then that some employees involved in writing the letter had indeed been terminated. "The letter, solicitations and general process made employees feel uncomfortable, intimidated and bullied, and/or angry because the letter pressured them to sign onto something that did not reflect their views," she added. 

The legal experts The Times consulted said the workers are most likely protected under the National Labor Relations Act, which gives them the right to self-organize and band together for collective bargaining or other "mutual aid or protection." Wilma Liebman, the former NLRB chairperson under Barack Obama, told the publication that SpaceX could argue that the workers penned the letter only to criticize Musk, which isn't protected by the law. However, she said that the board would probably disagree and would see Musk's tweets as an act that creates a hostile work environment.