Nothing is Real, Except Santa
Nothing is Real, Except Santa
Counterfeit Sneakers, Generous Strangers, and Bank Fraud
Forbidden Kicks
I should say right up front that I am not a sneaker enthusiast. I own a few pairs. Nothing crazy. The most I’ve spent on sneakers was around $200, and they were leather. Some of my friends are very into sneakers. Sneakers are a big deal. There are dozens of popular blogs dedicated to new sneaker styles. There are Instagram accounts tracking which sneakers preachers are wearing to their sermons.
A few years ago, I lived near two sneaker stores in Philly. I’d be on my way to get coffee or breakfast and notice lines of young men outside the stores, some of them with sleeping bags and camping chairs. They were always waiting for “drops”, or new sneaker releases. As sneakers become harder to get, releasing exclusive lines with small manufacturing runs, the drop has become more and more contentious, with fights breaking out over places in these lines. In 2015 shoe companies started turning to online releases to make things easier, and cut back on the negative press. This was their solution rather than, I don’t know, releasing more sneakers.
Scarcity is a concept in social psychology which, briefly, is summarized thus:
Simply put, humans place a higher value on an object that is scarce, and a lower value on those that are in abundance.
[…]
One [element] is social proof. This is a contributing factor to the effectiveness of scarcity, because if a product is sold out, or inventory is extremely low, humans interpret that to mean the product must be good since everyone else appears to be buying it.
What shoe companies have done to boost sales is create scarcity and social proof, which is why people were beating each other up to get a $120 pair of Nike Retro Boosts in 2015. Now, rather than fisticuffs, they’re just using bots:
The All in One Bot (aka AIO Bot) software, for instance, costs $399 and works for Mac and PC. When users buy the AIO Bot, they program it by entering personal details, like shipping/billing address and credit card info, to get it ready for an online launch on Nike.com, FinishLine.com or FootLocker.com, to mention a few sites. Then, on release date, as soon as the sale goes live, the AIO Bot monitors these sites and can automatically buy whatever product you've pointed to within seconds.
$399! For! A! Sneaker! Bot! Though, according to the Internet, you can resell a $160 pair of sneakers for $1600 if you win the algorithm race, so maybe it’s worth it to gain an edge? I don’t know. It is stressing me out just reading about what people go through to buy sneakers.
I bring all of this up because I had intended to write about this story, which details how a Chinese counterfeit sneaker operation used forged shipping invoices to get tens of millions of dollars’ worth of knockoffs into the US. However, like many stories I want to write about, I got sucked into the far bigger scam that is the legal sneaker market. What the fuck!
Since I’ve now been radicalized against Big Sneaker, I decided to read about how counterfeit sneakers are made in the first place, before some clever Chinese person routes them to a warehouse in Newark instead of their intended destination.
In the old days (pre-2010, according to the New York Times) counterfeiters would obtain samples or blueprints from the factories themselves, and were sometimes able to turn around fakes before the shoes even released. Companies have since cracked down on this, and now the, let’s call them shoe artists, are forced to buy a new pair at retail and duplicate it. Some, like Lin from Puitan who features in the NYT piece, create copies that are nearly indistinguishable from the originals:
While looking the shoes over myself, I noticed the label on the inside of the tongue read “Made in Vietnam.” That was all part of the subterfuge, Lin said, adding that there are “different levels of counterfeit. Some are low quality and don’t look anything like the originals. But some are high quality and look just like the real ones. The only way to tell the difference between the real ones and ours is by the smell of the glue.”
There are global enforcement bodies trying to stem the tide, but they face an uphill battle, since many of the countries of origin for the fakes - primarily China - simply don’t care about intellectual property laws:
Can such efforts make a difference? “You’re not going to arrest your way out of this,” Bob Barchiesi, president of the International Anticounterfeiting Coalition, told me in a despairing tone this past spring. As long as there is a demand, he insisted, there will be supply.
Scarcity! The shoe brands create limited supply to keep prices high and drive demand for their shoes, and for those who are unable or unwilling to buy the real thing, the counterfeit market exists. To me, the real question is - does this thriving market of fakes really harm the shoe brands? The answer, according to the piece, is….no:
A senior employee at a major athletic-footwear company, speaking on condition of anonymity, reflected on counterfeiting as a simple fact of industrial life: “Does it cut into our business? Probably not. Is it frustrating? . . . Of course. But we put it as a form of flattery, I guess.”
Shoe companies are the scammers. I knew it!
Good Santa
For a long time, since we invented wealth inequality, giving away money has been considered a good thing. We’ve come up with many words to describe it; philanthropy, gifting, endowments, charity. I won’t go into my many opinions about how the wealthy now use giving to avoid taxes and polish their images, because instead I want to talk about the way the money is handed out.
Most charities and non-profits have some strategy for handing out money. Grants, scholarships, whatever. They can do whatever they want, within the law.
Some people take a different approach. In 2017 Nikki Minaj decided to pay off the student loans of some of her Twitter followers. This was, I think, good. Student loans are a huge scam!
During Christmas time last year, two other people attempted to be charitable. The first was rapper Blueface, who drove to Skid Row in LA and started throwing money to homeless people. This was…not great, I don’t think. He caught a lot of backlash for it, because it was frankly quite demeaning! It also almost led to a riot, which is understandable.
The other Santa, however, decided to make it snow in an entirely different manner, by robbing a bank:
An eyewitness told KKTV that the man, […] left the bank, threw money into the air, shouted the holiday wishes, then went to a nearby Starbucks where he sat down and waited to be arrested.
To quote Robert DeNiro in Heat, it’s the bank’s money. He didn’t steal from a person. Victim-less crime! The robber had no weapon, and the only person ever at any risk was himself, because we know cops - and, no doubt, bank security guards - love to shoot people.
The passers by who happened to be outside and were, therefore, the beneficiaries of his generosity are claiming they gave the money back to the bank, which, I dunno man:
The amount of money stolen remains undisclosed, but Jeffocat told reporters that thousands of dollars remain missing.
Witnesses say people walking down the street picked up money and returned it to the bank.
It was Colorado in December, I’m sure it was windy! Maybe some of it just blew away! Also, since our Santa was likely doing this to get himself three hots and a cot, I think the story had a happy ending, like a Hallmark movie.
Banksters
Wells Fargo is the scammiest big bank in America. I say this based not on any personal bias, but the sheer volume of crimes they commit. They’ve had so many that Yahoo has put together a list of them. They include:
Creating 1.5 million fake bank accounts for their customers
Opening 500,000 credit cards for customers, without their permission
Repossessing cars from military members on active duty and overcharging them on their loans
Lying about the real number of fake accounts, which was more like 3.5 million
Overcharging small retail businesses for credit card services
You see what I’m saying? This is really bad shit! I even left a few of them out!
When the account scandal broke, Wells fired some mid-level managers. Pretty much everyone knew this was bullshit, because people all the way up to the CEO were regularly touting the fabricated sales numbers. At best, the bank was run so poorly that millions of fake accounts slipped under the radar. At worst, the CEO and his entire leadership team were complicit in a massive fraud that potentially ruined the lives of its customers:
The bank admits it charged at least 570,000 customers for auto insurance they did not need. Wells Fargo says an internal review found about 20,000 customers may have defaulted on their car loans for related reasons.
[…]
Wells Fargo says it wrongly fined mortgage clients. Wells Fargo admits that 110,000 mortgage holders were fined for missing a deadline — even though the delays were the company's fault.
[…]
Wells Fargo says it wrongly fined mortgage clients. Wells Fargo admits that 110,000 mortgage holders were fined for missing a deadline — even though the delays were the company's fault.
This was all in the same year! In response, the bank has paid hundreds of millions of dollars in fines, and punished a few of its executives. It clawed back around $100 mil from three top execs, including former CEO John Stumpf. However, a lot of his personal wealth came from his stock in Wells Fargo which went up while he was overseeing all the frauds and crime. He’s still rich, because of course he is.
Last week it came out that people might actually face criminal charges for this whole mess, three years later. The wheels of justice move slowly:
Multiple former high-level Wells Fargo executives are under criminal investigation in connection with the bank’s fake-accounts scandal and could be indicted as soon as this month.
[…]
The probe could yield some of the most high-profile criminal charges against U.S. bankers since the financial crisis, though sources noted that the situation remains fluid and is subject to change.
I’d argue there weren’t high-profile criminal charges brought against anyone during the financial crisis either, but perhaps doing massive bank fraud rises to the level of a chargeable offense these days. One can hope!
It sounds like Carrie Tolstedt, the head of Community banking, may be the one in the crosshairs. I think she qualifies as “high level” since she had a cool $67 million in stock grants clawed back after she was fired in 2016, in the midst of the scandal. The board of Wells is claiming she misled them, though there were multiple audits and other signs that things were not right with the bank.
Robbing banks for a few grand will land you in prison for a long time, but until recently - maybe! - robbing tens or hundreds of thousands of customers if you work for the bank didn’t carry any sort of penalty. Who are the real thieves again?
Ghosn Ride the Whip
Noted bellicose dipshit Carlos Ghosn is back in the news again which I am acutely aware of, because my phone has decided I am a fan of his and sends me updates twice a day. I am not going to spill more ink on his ridiculous press conference, but it seemed chill:
The best headline about it I was able to find is “Carlos Ghosn Likens Arrest in Japan to Pearl Harbor Attack in Furious Press Conference” which, whatever, man. I’m tired. Stop pinging me.
Short Cons
ProPublica - “The scheme they’re all trying to kill is what’s called a “syndicated conservation easement,” which the IRS calls “abusive” and says has resulted in bogus deductions for the rich that have cost the U.S. Treasury billions in revenues.”
Military.com - “"A number of fraudulent text messages informing individuals they have been selected for a military draft have circulated throughout the country this week," according to a message on the command's website marked "FRAUD ALERT!!"“
News.com.au - ““There are currently a wide range of appeals raising funds for people and animals affected by the bushfires. Unfortunately, some of these are scams,” the statement reads.”
WSJ - “Mr. Ghosn has said he arranged his exit from Japan by himself. But this account suggests he enlisted a larger cast of characters.”
Tips and New Year’s Resolutions to scammerdarkly@gmail.com