Tip of the Iceberg

Fake Masks, Robocalls, Mass Layoffs, Insider Trading, Influencers, Smash and Grab, Quackery, and the Mafia.

The Mask Counterfeiters

For the time being, it appears I am going to be writing about coronavirus-related fraud and scams. As I predicted last week, they are proliferating at an alarming rate, which makes sense because a global pandemic amplifies the fear instinct that drives successful scams, and because much of our enforcement and oversight apparatus is either working from home or not working at all right now. Let’s see what we’ve got happening this week!

In The Independent, a story on mask fraud. Law enforcement in Turkey busted a counterfeit mask operation:

Turkish police on Tuesday seized 1 million masks and arrested five people in a raid on a sweatshop making unauthorised medical supplies in Istanbul.

“They use Photoshop or whatever and make their own certificates,” said one industry insider who purchases protective masks for the electronics industry. “They are even enlisting box manufacturers to make fake boxes with logos on them like they were selling fake Nike T-shirts. Because nobody’s buying T-shirts any more, they start to manufacture masks.”

I’ve written about replica sneakers a couple of times, and while I may personally feel that counterfeiting overpriced luxury goods is something of a victim-less crime, making fake surgical masks is most definitely not that. The sheer scale of these operations and how quickly they have been able to spin up is astonishing:

The extent of the rogue production is unknown, and industry sources say it encompasses factories in China, India and Turkey that have been panicked over the collapse of the textile industry in the wake of the global coronavirus pandemic. Just one factory in Turkey produces 450,000 masks a day, said an industry insider, and there are likely dozens of such outfits in the country. Turkey now has the capacity to produce an estimated 50 million masks a day, said one well-placed industry source.

I was not aware that Turkey had a medical products industry, but apparently they have been supplying significant chunks of the world with these materials, and the sudden uptick in demand could prove a boon to their economy. However, since Turkey is…Turkey, they have decided it makes more sense to simply seize the masks and force producers to sell them to the government:

Interior minister Suleyman Soylu was quoted by local media as saying police had already raided depots of medical mask producers on Sunday to demand they sign contracts to sell their wares to the Ministry of Health. […] Experts predict more and more governments will eventually invoke emergency laws to seize control of medical supplies.

Countries using emergency laws to seize medical supplies could be good? I am all in favor of taking drastic measures where the health and safety of citizens is concerned, but it’s hard to be optimistic that authoritarian regimes doing these sorts of things will work out well for those involved.

An Interpol announcement linked in the article gives us a clue what else we have to look forward to with a flair for understatement:

The seizure of more than 34,000 counterfeit and substandard masks, “corona spray”, “coronavirus packages” or “coronavirus medicine” reveals only the tip of the iceberg regarding this new trend in counterfeiting.

It is easy to forget that the United States is not the center of the universe, and that all over the world billions of people are living in fear of the virus. Fake penis pills may have been a mild annoyance in our old world, but people ingesting fake COVID medication thinking it will protect them could potentially harm so many people, it makes me crazy.

The Robocallers

Last week the FTC put nine VoIP providers on notice to stop “assisting and facilitating” illegal robocalls related to the coronavirus. They named (and shamed?) the companies, to force them to clean up their acts. It is an unusual step for an enforcement agency to tip their hand like this, but given that investigations can take months or years, the FTC may be trying to do what it can without bringing charges.

An article in Fast Company talks about how bad the coronavirus robocalls have already become:

The phone-spam-blocking app YouMail recently told The Washington Post’s Tony Romm that a million coronavirus robocalls have been going out daily for the past few weeks.

This is just a messaging pivot for robocall scammers. Were it not for coronavirus, they would be dialing people as the IRS, trying to steal their recently-filed tax returns. Instead, they’ve set their sights on the perfect target for this sort of scam - people who are terrified of a virus they cannot see. As Jim Bakker and Alex Jones are selling them colloidal silver or toothpaste as a cure, robocallers are convincing the vulnerable to part with money or personal information.

The recently-passed CARES Act only makes matters worse, because people are uncertain when or how they will get their relief check. The BBB has already issued a warning about scams targeting people under the guise of helping them get money from the government as part of the bailout.

The DoJ and FCC do have more tools at their disposal to go after illegal robocallers, following the passage of the TRACED Act late last year. However, like the FTC, enforcement during a pandemic may be difficult. Here’s hoping the three different government agencies who can do something about people being taken advantage of during a scary time can combine efforts and get something done.

The Shitty Bosses

There are way too many stories about companies laying off their employees in awful ways, I could not write about them all if I did a daily newsletter. This week, let’s look at one in particular, because it’s a scooter company called Bird, which is a company that, if not for the pandemic, I’d likely be writing about for other reasons. They’ve burned through astronomical amounts of cash for two years now, betting that people will want to take their cheap electric scooters around cities for short trips. They’re the primary reason you may have seen scooters clogging sidewalks and rivers, since Bird took an Uber-style approach and tried to blanket the market with its service, relying on miserable gig workers to keep the wheels on, so to speak. Anyhow, last Friday Bird had a morning conference call and, well, I’ll just let the story speak for itself:

Thinking there were technical difficulties, some employees logged-off and were never able to return to the meeting. Then, after five minutes of dead air that seemed like an eternity, a robotic-sounding, disembodied voice came on the line.

The woman began by acknowledging "this is a suboptimal way to deliver this message." Then she cut to the chase: "COVID-19 has also had a massive impact on our business, one that has forced our leadership team and our board of directors to make extremely difficult and painful decisions. One of those decisions is to eliminate a number of roles at the company. Unfortunately your role is impacted by this decision."

The meeting was scheduled to last half an hour but ended up going for only two minutes.

They did this with four hundred people on the line! Holy shit! The company’s founded trotted out an embarrassingly weak defense:

We did NOT let employees go via a pre-recording. It was via a live zoom mtg (not ideal either) b/c we're all WFH during COVID. Video was turned off which we thought was more humane. In retrospect, we should've made 1on1 calls to the 100s impacted over the course of a few days.

Uh, yeah! You should have! It’s not like you have anything better to do - your company makes scooters and no one is riding them right now! Apparently Bird engineers had time to write scripts to instantly lock their employees out when they were surprise-fired:

A month earlier, someone in Bird's IT department had been tasked by his superiors to write a script that would allow the company to instantly shut down all of a user's accounts – computer, email, Slack – with the click of a single button, according to an employee. He was told the script would be used for general off-boarding rather than the mass layoff that he ended up being included in. Last Friday, the script seems to have been activated early.

Some employees, who had the day off or were working a later shift, did not understand why their computers were restarting and why they could not log back in. Others tried in vain to join the webinar and got a message saying it was full, likely because Bird's webinar license didn't accommodate enough attendees. Some employees did not realize what was going on until they saw a brief TechCrunch article posted at 11:26 a.m.

I am not an HR professional but folks, do not do things like this. The paranoia of start-up founders is eclipsed only by their hubris. What is someone going to do with their files at your scooter company? Leak to the press that you’re not actually making any money? I’d say that there may be consequences for the company, but everything is such a mess it’s hard to know. A PR disaster barely makes the news.

The Senators

Remember Richard Burr? Two long weeks ago he was accused of insider trading on confidential briefings he had received on coronavirus weeks before the government admitted the seriousness of the situation. He sold a bunch of stock, and saved himself at least $250,000 in potential losses, according to the Wall Street Journal.

Well, he’s claiming he did all of that based on public information, which seems unlikely, because he was also caught on tape telling his rich donors that coronavirus was going to be as bad as the Spanish flu.

Anyhow, I’m not expecting much to come of it but he’s now under investigation by the Department of Justice, so that’s cool I guess.

Another Senator, Kelly Loeffler, was also on committees that received classified briefings, and she’s married to the fucking head of the New York Stock Exchange, but she claims her trades were done via investment managers, so she didn’t insider trade. Seems like nothing to me:

Loeffler, who sits on the Senate Health Committee, first began selling stocks on January 24 — the same day that committee held a private all-members session on Covid-19 — and continued making trades in late February and early March.

Yeah, sure. Okay.

The Influencers

The Instagram account “bestmemes” decided to just go for it last weekend and posted some photoshopped images of Barack Obama and Donald Trump as part of a coronavirus PayPal scam:

Over the weekend, @bestmemes, a massive Instagram meme account that boasts nearly 14 million followers, posted images of fraudulent tweets from President Donald Trump and Barack Obama. The images directed their followers to a scam campaign promising a PayPal payment that mirrors the stimulus payments the government is giving to Americans.

Whether it was taken over by hackers or simply the victim of some really poor decision-making on the part of the account’s owners, it did get the attention of Facebook, who took it down on Monday. More like worst memes, am I right?

The Art Thieves

Is art a scam? It’s a question I ask a lot. Not the art itself, but the art market, which is essentially a giant money laundering machine for the wealthy. And, like most things the wealthy do, inflating the value of art and hoarding it for themselves means that an increasing number of great works are now out of the public view, and no one can enjoy them. Many of them sit in high security warehouses around the world because they are no longer art, they are an asset of some rich person.

Anyhow, some enterprising thieves decided to take advantage of the pandemic shutdown and steal a van Gogh:

The Singer Laren museum east of Amsterdam said “The Parsonage Garden at Nuenen in Spring 1884” by the Dutch master was taken in the early hours of Monday. By early afternoon, all that could be seen from the outside of the museum was a large white panel covering a smashed door in the building’s glass facade.

It was not a particularly sophisticated burglary, they smashed a window and grabbed the small painting. Which begs the question - why just the one painting? Are van Goghs easy to fence in Holland? Was this theft made on behalf of some rich scumbag who really liked the work? The museum has dealt with thieves in the past:

In 2007, thieves stole seven works from its sculpture garden, including a bronze cast of “The Thinker” by Auguste Rodin. The famous sculpture was recovered a few days later, missing a leg.

I wonder what a bronze Rodin leg goes for on the black market?

The Quacks

If you’ve been watching the news, you may have seen reports of people talking about how a drug called hydroxychloroquine can be used to treat COVID-19. By “people” I mean the president and Fox News anchors and a certain former mayor of New York City. It may surprise to you that, given the veracity of the sources, that this claim is bullshit. How did this happen?

The New York Times explains that a doctor in New York, Vladimir Zelenko, took to the Internet with claims that he had treated patients in his small community with the antimalarial and had seen “100 percent” of them survive with no need for hospitalization or a ventilator:

“I’m seeing tremendous positive results,” he said in a March 21 video, which was addressed to President Trump and eventually posted to YouTube and Facebook.

If there’s one thing our president loves, it’s people telling him good news while thanking him for…really anything, I guess. So, then, the predictable happened:

Sean Hannity, the Fox News host, quickly promoted Dr. Zelenko’s claims on his TV and radio shows. Mark Meadows, the incoming White House chief of staff, called Dr. Zelenko to ask about his treatment plan. And Rudolph W. Giuliani, Mr. Trump’s personal lawyer, praised him in a podcast interview this week for “thinking of solutions, just like the president.”

Back before we lived in Plague World, it was easy to dismiss these theories, because they were mostly confined to a small subset of the public, and had less of a direct impact on the lives of millions of people. Unfortunately, because our government is currently being run by people who are unbothered by science, dangerous theories spread like…a highly deadly airborne virus, I guess.

The reality is that we won’t know whether the drugs work until we spend some time testing them, which is how we develop medical treatments. In the mean time, the misinformation has already killed at least one person, a man who overdosed on a version of the drug after a Trump press conference.

What can we do about scams when they are being broadcast by the leader of a country? Social media networks took down posts by Brazil’s president about the drug, but they’ve refused to do the same for Trump. The doctor in charge of the coronavirus response is getting death threats. Nothing is free from partisan rancor, and we’re at a point where one side is willing to peddle quackery to score political points. It’s not great!

The…Mafia??

The New York Post is “breaking” stories on the organized crime beat:

The wholesale cancellation of major sports in the face of the contagion has wiped out tens of millions of dollars in illegal gambling income, a “historic” blow to the Mafia, law enforcement sources told The Post.

Okay, so this piece is a bit of a joke, because first off - never trust what law enforcement sources say. Especially in the New York Post! Police have a long history of using the media to launder their pro-cop propaganda, so take all “law enforcement sources say” articles with a big grain of salt. That said, the article reads like the authors watched half a season of The Sporanos and drew their own conclusions:

Other mob mainstays have also been hard hit. The extortion of restaurants has fallen, with eateries ordered closed except for takeout and delivery, and construction rackets had been bringing in the bucks until Gov. Andrew Cuomo halted all non-essential projects on Friday, sources said.

Are mob shakedowns really even a thing anymore? A cursory Google search tells me that people still do get arrested for it, though the only alleged mobster who’s been pinched recently is from Philly, not New York. Another article talks about Yelp extorting restaurant owners, which, yeah I buy it. A few more links down, though, we hit the jackpot:

An actor, hired for his intimidating looks in all-black and sunglasses, and two others face 20 years in prison for extortion for posing as mob enforcers to shake down the former owner of a Brooklyn pizzeria, according to federal court documents.

Now we’re talkin! Fake mobsters? Real estate fraud? Good stuff! What else we got?

“Construction’s a very big deal because it has a lot of branches,” one law enforcement source said, noting that goodfellas don’t just profit off jobs themselves but related ventures like trucking and the ports.

And with fewer businesses open and generating garbage, private carting companies, historically a popular mob enterprise, are also feeling the pinch, sources said.

Goodfellas reference, fantastic. Anyhow, this article is generating garbage and so is the New York Post, but they may have hit on the one area criminals may take a hit, which is sports gambling. With gambling still illegal in most states, it’s happening somewhere. Is that organized crime? The Mafia? I don’t think the New York Post has any more of an idea about it than we do, based on the quality of their reporting.

Short Cons

MI Headlines - “On Tuesday March 24th, 2020, a Cease and Desist letter was sent to two related Rockford-based businesses for marketing to consumers the “Coronavirus Defender Patch,” where the companies falsely claim will help protect people from contracting the coronavirus disease 2019”

CBC - “Prime Minister Justin Trudeau is touting the benefits of an expanded financial package to help Canadians cope with the impact of COVID-19 — while warning them about a "text scam" that's trying to exploit the government program.”

Bloomberg - “A Brooklyn man was arrested for coughing on FBI agents who came to investigate whether he was selling medical supplies, including N95 masks, at inflated prices in what appears to be one of the first cases related to alleged profiteering from the coronavirus pandemic.”

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