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I'd encourage a bit more skepticism to this article. While this accusation could possibly be true, there are two things to keep in mind, which I am sharing havi

I'd encourage a bit more skepticism to this article. While this accusation could possibly be true, there are two things to keep in mind, which I am sharing having experience as a founder/CEO who has gone from startup to IPO: 1) This is taken from a complaint in a class action lawsuit. Class action lawyers are very similar to patent trolls whereby they can spin almost any story they want. And journalists go for clicks, so they amplify the sensationalism. It doesn't mean this is one of those, but a class action complaint should not just blindly be trusted. 2) There is a strong theme of "of course execs lie cheat steal at every turn" and I also think this narrative should be questioned. Ethics aside, the level of compliance in a public company is insanely high. Execs are already rich. To risk jailtime, which fraud can lead to, you'd need to see something more existential than slightly increasing margins on used van sales. I felt inclined to comment as I've been on the other end of articles like this, and it is astounding the level of mind reading people have done into my intent and actions on things that were factually just not true at all. I also truly would find it very difficult to commit a broad organizational fraud even if I wanted to and my company is only 500 people. If I had to make a prediction, the case is less black and white than it appears, and if there was fraud, it was probably committed at a non-executive level by the person whose P&L was directly tied to these resales. Or, it was done independently by the much smaller leasing company where this was more existential to them. It is highly unlikely to be a Fed Ex executive-level conspiracy. I'm sure there are a few counter examples, such as say the VW emissions scandal, but I would counter these were the exceptions that proved the rule and in general when the C-level was involved was much higher stakes.

zucked 3y ago
Even if you turn out to be flat wrong, I still appreciate the level-headedness to consider how we got to this point and the urging we all slow down a bit before we all march on FedEx headquarters.
- fundad 3y ago
  > before we all march on FedEx headquarters It's a good thing the ownership class doesn't get away with literally everything because that would drive people to vigilante violence.
  - tracker1 3y ago
    I'd be lying if I said I'd never thought about it. Given how many dejected people there are in society, including those who have had military training, I'm surprised there hasn't been more of it at this point.
    - jstarfish 3y ago
      We had a lot more vigilante justice in the 70s. It went away with the rise of tough-on-crime laws in the 80s (vicarious punishment) and eventual counter-domestic terrorism (suppression) in the 90s. Bernie Goetz would be crucified these days. 00s just became mob rule via social mechanisms and manipulation; cliquish behavior is not something you can shoot or detonate, so we're stuck with people taking out their frustrations on children at school and anybody unsuspecting. The dejected are only going after targets they can reach (a tragic, but logical outcome). There was one aspiring vigilante in the last few years who drove across the country to assassinate some scummy judge or something and was immediately caught while doing recon. His mistake was going after someone afforded protection. Everything is political and treated as terrorism. It's too risky to vote from the rooftops these days; there are an increasingly-infinite number of ways to fail.
kevinventullo 3y ago
I understand your defensiveness, but the article did not even imply that the CEO was directly implicated. That said, I think it is still at some level their responsibility if this fraud turns out to be true; “the person whose P&L was directly tied to these resales” still had ever stricter OKR’s they had to answer for, and apparently no double-checking or auditing was done because that person’s boss didn’t want to know. They were rewarded for numbers going up and to the right, as was their boss, as was their boss, up to the CEO. Sorry, I just tire of narratives where when a corporation does something morally wrong, it’s the fault of nebulous capitalist hyper-optimization and no individuals are held accountable.
- koheripbal 3y ago
  We need to make evidence based judgements, not accusation based judgements. I'm tired of the outage-clickbait. I'm here to learn, not to be emotionally manipulated.
  - anigbrowl 3y ago
    There's evidence from one side in the lawsuits, while the defendants have so far declined to submit any for scrutiny. In any case, the title of this submission says that Fedex is 'accused' of fraud rather than having been found guilty of it, so you knew what you were getting before you clicked; you could have just ignored it.
    - singleshot_ 3y ago
      When someone files a complaint against you with a court of appropriate jurisdiction to start a lawsuit, your only sane option is to file an answer. The complaint lists their allegations point by point. The answer either admits or denies each allegation, point by point. It is not surprising that FedEx has declined to submit evidence for scrutiny. It’s not time for that yet. They will be required to do so in discovery and they better hope they can at trial but right now we should not expect to hear anything from them other than “admit, deny, insufficient basis to form a belief and therefore deny.” It’s just too early for an evidence based discussion. This is the nature of the civil action.
anigbrowl 3y ago
astounding the level of mind reading people have done In this case, though, Fedex has just denied the allegations but not proffered any alternative explanation. Nature abhors a vacuum, and human nature abhors an information vacuum. Corporations habitually refuse to share information unless they are forced to do so legally, so they have only themselves to blame for the subsequent distrust by the public.
Frost1x 3y ago
>...if there was fraud, it was probably committed at a non-executive level by the person whose P&L was directly tied to these resales. Or, it was done independently by the much smaller leasing company where this was more existential to them. I think most high-level executives are competent enough to create legal incentives and disincentives to their organization which typically are legal. The "lie, cheat, and steal" narrative is about functional outcomes and not so much about explicit follow through. Executives are in positions they can craft goals and to some degree pass responsibility of details of those goals off to others. I can set unrealistic targets that are only attainable by cutting corners and be sure to make it clear I'll drop people who don't meet those targets or reward people who do. I can leave in-depth questioning about the approach (the potentially dirty details) to create a layer of plausible deniability. It's as if I hire a driver to take me from point A to point B. That distance may be impossible to cover without violating an array of traffic laws. My goal as the passenger though is to traverse the space safely at some price. I don't really care about how it's done, I'll leave that to the driver. I can create pressure on a driver and/or apply selection bias to choosing a driver willing to take on my impossible request. At no point did I say: violate traffic laws, speed, etc. but I know that's what's going to happen to attain my goal. I never incriminate myself by making the goal generalized and as a passenger, I take on no legal risks for my driver violating traffic laws. Suddenly, using a crafted goal, careful selection, and money, I've created a situation for something illegal to happen. Should I be at fault? What if I even added to criteria of transporting me from A to B not to violate traffic laws but I give a wink wink, shove a little more money (incentive) at the problem, or turn the cheek when it occurs so I don't witness it. Am I still not at fault? A caricature of this behavior in my opinion is Donald Trump who operates completely in the grey areas wherever possible, pushing or promoting questionable behavior but avoiding the provable cases where he's responsible. From my interaction with various executives over the years, this strategy isn't unique. It's certainly not everyone but impossible environments and requests are made on the daily. It happens from the highest levels and gets passed down and down.
burkaman 3y ago
> Execs are already rich. To risk jailtime, which fraud can lead to, you'd need to see something more existential than slightly increasing margins on used van sales. This seems incredibly naive. You'd have to be willfully ignorant to think that a) rich people won't break the law to make a tiny bit more money, and b) fraud committed by large corporations often results in jail time. I agree with you that this article isn't worth very much, but that's only because lawsuits in general shouldn't be trusted without corroborating evidence, not because a rich executive would never do this.
- deleted 3y ago
  [deleted]
- hinkley 3y ago
  At some point it’s like an addiction. “No one becomes a billionaire without hurting a lot of people” is still true, though inflation will eventually make us have to change that to “multi-billionaire”.
- ordu 3y ago
  > This seems incredibly naive. I personally see nothing naive in the parent post. It brings arguments based on knowledge how organization works and appeals to a game theory (stakes do not match). I'm not saying the reasoning is necessarily valid, but it is not naive. The only part of the parent comment I do not approve from a methodology standpoint is an appeal to "exception that proves the rule". Exceptions do not prove rules, they disprove them.
  - Negitivefrags 3y ago
    “No parking on Sundays” is an exception that proves the rule. The implied rule is that parking is allowed on Monday through Saturday. I almost never see this phrase used correctly however.
    - burkaman 3y ago
      I don't think there's a single "correct" way to use that phrase, different people understand it differently. The meaning I'm most familiar with is an obscure exception demonstrating that your rule of thumb is usually reliable. For example: "Street parking is always allowed" "Not always! Three years ago there was a marathon that went through this street and you weren't allowed to park here that morning." This exception is so specific and obscure that it "proves" (in a casual conversational sense) that "you can always park here" is a good rule. Not all exceptions prove the rule: if the exception is "except on weekends and holidays and overnight", that's so significant and obvious that it actually disproves the rule.
delfinom 3y ago
>1) This is taken from a complaint in a class action lawsuit. Class action lawyers are very similar to patent trolls whereby they can spin almost any story they want. The complaint has 4 cited individuals and follows up on an already ongoing lawsuit with a used vehicle dealer that filed a lawsuit in 2017 over being scammed as well.
delfinom 3y ago
>1) This is taken from a complaint in a class action lawsuit. Class action lawyers are very similar to patent trolls whereby they can spin almost any story they want. The complaint class action references 4 affected independent individuals as victims. But, this entire thing is in parallel with an already ongoing lawsuit by a used vehicle broker that filed a lawsuit in 2017 over being scammed as well. https://cdllife.com/2021/fedex-battles-lawsuit-over-millions-of-undisclosed-miles-on-resold-trucks/ https://cdllife.com/2021/fedex-battles-lawsuit-over-millions...
dghlsakjg 3y ago
Misrepresenting an odometer reading as true is a federal offense, and it seems clear that this happened in at least one of the cases in the article. I’ve never seen a car title that doesn’t have a field for noting an in accurate odometer. Federal rules also makes the seller sign an acknowledgement that the odometer reading is true, rolled over, or unknown. Maybe there was no conspiracy involved, and the fleet mechanics were just swapping out defective gauge clusters (somehow always swapping in a lower mileage cluster). So the best defense they have is that this was an accident of sloppy record keeping leading to a failure to make legally required disclosures… which is not a great defense.
- hinkley 3y ago
  I am willing to believe that if you shuffle a problem around enough you create a situation where nobody knows the truth and we’ve made it punishingly difficult to go get it. It would be easy in a delivery business for an odometer to roll over one or even twice, and if you assign the new kid to get rid of the old trucks he might assume things. That is not to absolve anyone. The truth can be a liability or an asset, and has to be managed not unlike inventory. But that’s not what happened here: > The lawsuit accuses FedEx of replacing the odometers in many of its vans with new ones that read zero miles, using the vans for a bit longer after that, and then selling them at auction with 100,000 miles or less on the new odometers. That stretches credulity. But also, if you buy a FedEx truck or a police cruiser thinking you got a good deal on a low mileage vehicle, you’re a fucking idiot. Of course they’re going to drive them into the ground before selling them.
  - dghlsakjg 3y ago
    Right, but my point is that the truth is actually pretty easy in this case. There's a federal law that requires you to either swear that you know the odometer reading is accurate, that the odometer has rolled over, or that the true odometer reading is unknown. This disclosure is made on every vehicle sale, and there's a standard form. If you can't swear to the first two, you swear to the last one. I wouldn't assume that a low mileage fleet vehicle is necessarily beat. Maybe it was assigned to a short route (There's a FedEx route on Lopez Island in Washington, half his day is spent on the ferry), maybe it is being phased out early due to a change to electric. There's a lot of reasons FedEx might sell a low mileage vehicle, and if you have a legal document from a major corporation stating that the mileage is accurate, most people would trust that.
MarkMarine 3y ago
A few counter examples. Lol. Asbestos in talcum powder. PFAS exposure and dumping into public water supplies. Monsanto and roundup. Cigarettes health effects. Climate change from burning hydrocarbons. Norfolk southern and the controlled burn in east palistine. I could literally go on and on about the history of execs poisoning people and the planet while knowing full well about it. All to keep the profit margin, but you know this stuff you’re just willfully ignoring it. If you’re an ethical executive, you’re a unicorn.
- fkyoureadthedoc 3y ago
  > but you know this stuff you’re just willfully ignoring it. That sure is what it seems like. C-level solidarity, even managed to blame the peons with just as little evidence as everyone else blaming the execs...
  - salawat 3y ago
    There:s a difference between strategic "say no evil, see no evil,..." Which is rampant in C-level management, and the public having difficulty leveraging legal discovery processes against corporations with far more budget to throw at defanging or maliciously complying with such request, and there "being no evidence". Evil exists. Stop shoving your head in the sand and realize it's an uphill fight.
- playingalong 3y ago
  I agree with your first paragraph. The last sentence is a stretch though. The fact that there were multiple execs who were blatantly unethical doesn't mean most execs are unethical.
  - MarkMarine 3y ago
    Would it be better if I listed every instance of executives choosing to poison people, willfully put them in dangerous working conditions to save some money against the law, releasing products they knew would maim people or kill people… all for marginal increases in share price? It’s a long freaking list. This is the way this system is setup. Executives pursue profit at the expense of everything else. This is the cornerstone of capitalism.
hinkley 3y ago
I don’t think the VW situation is at all unique, just the handling of it. I understood Deiselgate because I’ve worked for managers who just wanted checkboxes checked, and I’ve seen people who reward monetarily or with praise for solving problems but who don’t check for dead bodies before doing so. Too many coworkers who get promoted for making messes others had to clean up. What if the cleaners don’t exist in sufficient numbers? Or get laid off? When you combine a mercenary mind with oversight from a person who doesn’t believe in “if it seems too good to be true, it probably is” that’s when the bad stuff starts to happen. There’s also a machismo school of business that lionizes force of will. Telling employees you want something that seems impossible and expecting them to get it. Nevermind that by far the easiest way to cross an impossible finish line is to cheat your ass off. How many products do we need class action suits on? How many exposes on child or captive labor? How many superfund sites? How many companies going bankrupt ten years later when the truth comes out, before we hold people accountable and call bullshit on the “aw shucks” response to tough questions? Or maybe a Bachelor of Arts from a business school is not enough rigorous education to run a multinational company.
Alupis 3y ago
> VW emissions scandal VW is in the business of selling vehicles, and has a real interest there to push the envelope as much as possible. FedEx is not in the business of selling used vehicles. These vehicle sales likely don't impact their core business in the slightest - making an organization-wide scandal just silly to even think about. Looking online, these types of "vans" sell for anywhere between $5,000 and $30,000 (with 4 digit miles)[1]. Seriously... FedEx isn't going to blink at any of this. These class actions are always brought by bottom-feeding lawyers that use serial-plaintiffs. The reality is the class action bit will be retracted, and the lawyers, err, plaintiff will receive a "go the hell away please" payment. That's the game here... [1] https://www.auctiontime.com/listings/trucks/auction-results/219623617/2000-freightliner-m-line https://www.auctiontime.com/listings/trucks/auction-results/...
- MikeHolman 3y ago
  I'm sure this isn't something at the exec level, but it seems possible someone somewhere in middle management who oversaw used van sales wanted to increase their revenue numbers and thought cheating the odometer would be an easy way to boost their numbers.
  - Alupis 3y ago
    It's not even clear if FedEx has anything to do with this. The other named defendant is "Holman Fleet Leasing", which seems to imply these vehicles were leased to FedEx. If that's the case, then any possible scandal here would be squarely on the company selling the vehicles - not FedEx. FedEx might just be a tacked-on name. You see that quite often with Prop 65 cases. The plaintiff attorneys add anyone even remotely related to the case, just to drive up pressure and chaos, hoping for quicker/larger settlement offers. In this situation, even if FedEx has nothing to do with vehicles sales, they might opt to settle and write a check just to make the bad publicity go away. If you think that sounds like a shakedown, you'd be right.
    - fatfingerd 3y ago
      In a civil case this is the right thing to do. Chances are good that a company as large as FedEx very closely met with leasing providers and discussed how they were going to get those costs down, better than if FedEx didn't lease. The lawyers would be silly not to fish for signs that FedEx knew a bit about why it could get the leasing rates it wanted.
curiousllama 3y ago
I think what you may be missing is the effect of compounding organizational incentives in big, old companies. I wonder - how much experience have you had in large legacy companies? (think "F100 company's subsidiary, based in Dubuque" type company) I once helped fix up a manufacturing co that materially overstated net income by >10% for a decade. And it was just a mix of honest mistakes, miscommunications, some incompetence, and a shockingly small amount of fraud (though not 0). I learned it's really easy for sr execs to run the company badly, one or two junior execs to push the limits, and a everyone else to just be a biiiit lazy - and bam, there's a big fraud. That said 0 stock is up 5% w/w, so this can't be THAT big
sashank_1509 3y ago
Very well said. Let’s bring a few salient points: All of us here work at jobs, possibly in very large corporates. Do we see anything illegal going on? I would reckon that >90% of us have gone through our corporate life without ever being a part of anything close to even illegal, at worst we forward something to legal to be extra sure. So if we think corporations are regularly behaving illegally, we all have simultaneously seemed to have lucked out to be in the one the one ethical and legally compliant organization. If some part of your worldview is that the world is being filled with greedy, selfish and unethical people, constantly trying to screw over others but you are the exception most likely your worldview is completely off (Most people view themselves as the good guy/ hero of their world). In my experience it is very unlikely for anyone in C Suite to ever risk any actual fraud in their dealings (or anyone in the organization really), however lawyers are essentially parasites on society who feed on productive work to make a living while gaslighting rest of society into believing that they’re playing an important role in protecting it.
- ncallaway 3y ago
  > All of us here work at jobs, possibly in very large corporates. Do we see anything illegal going on? I would reckon that >90% of us have gone through our corporate life without ever being a part of anything close to even illegal, at worst we forward something to legal to be extra sure. So if we think corporations are regularly behaving illegally, we all have simultaneously seemed to have lucked out to be in the one the one ethical and legally compliant organization. This line of argument only works if the majority of a company is exposed to illegal behavior. If a large company can commit (or attempt to commit) illegal behavior, while making that behavior only visible to a small fraction of people, then this argument falls apart. For example, how many people were involved and aware of the VW emissions scandal? 200? 400? Out if 200,000 worldwide employees. So >99% of VW employees would have likely reported not having observed illegal behavior. That does not mean that those employees “lucked out” into working for an ethical legally-compliant company. It means the company is smart enough to hide its unethical and disreputable behavior from its employees as much as possible.
johndhi 3y ago
Helpful perspective. As a lawyer who has worked on both sides of class actions, I generally classify these cases in four categories: -Legit cases that describe (or at least ultimately lead to finding) clear and meaningful wrongdoing. There's always some room for arguing one way or the other but ultimately there's some clarity that something meaningfully wrong happened. I think these are probably ~3-5 percent of cases filed. These cases tend to settle relatively early for high dollar figures. -Cases of clear but unimportant wrongdoing. Technically a statute was violated, but no one was really hurt at all. These tend to settle for small $ figures. Perhaps 20% of cases. -Important but unclear wrongdoing (evidence supports either finding; among one million documents, some look really bad, while others look very exculpatory). These stick around for a long time and ultimately earn lawyers a lot but cost the parties, on average, a lot of money to litigate. Perhaps 30% of cases. -Complete/fabricated nonsense and/or fishing expeditions. Cost defendants a fair amount (and brutal for small defendants), but not the end of the world for big defendants. Perhaps 50% of cases.
freejazz 3y ago
>1) This is taken from a complaint in a class action lawsuit. Class action lawyers are very similar to patent trolls whereby they can spin almost any story they want. And journalists go for clicks, so they amplify the sensationalism. It doesn't mean this is one of those, but a class action complaint should not just blindly be trusted. Do you think the rules that apply to patent litigators and class action litigators are different than the rules that apply to other litigators? I really don't understand what you seem to think is going on here, it's a bit naive imo (all the lawyers that I don't like are the bad ones and they lie!) and I didn't even make it to your next part of your post, where you think that business executives are the honest ones! They aren't. They don't have their own personal license and livelihoods at risk most of the time, unlike attorneys.
WheatMillington 3y ago
Fantastic comment and insight, thank you.
esotericimpl 3y ago
[dead]
NoMoreNicksLeft 3y ago
> There is a strong theme of "of course execs lie cheat steal at every turn" and I also think this narrative should be questioned. This narrative is "middle-middle management lies, cheats, and steals at every turn and sometimes on other people's turns too". And while we might question that narrative about execs, we know that it is unfailingly true of middle management. It's not unexpected, that's what happens when perverse incentive is piled on top of perverse incentive. Someone was racing for a bonus. And discovery's going to show that there was some absurd uptick in how many OEM odometers for this model were ordered in the problem years, far in excess of anything that had happened previously.
scrubs 3y ago
"To risk jailtime..." Corporate America unfortunately does not worry about jail time. Instead fines are primarily paid from shareholder cash. I wish jailtime was an impediment. It's not

zucked 3y ago

Even if you turn out to be flat wrong, I still appreciate the level-headedness to consider how we got to this point and the urging we all slow down a bit before we all march on FedEx headquarters.

fundad 3y ago
> before we all march on FedEx headquarters It's a good thing the ownership class doesn't get away with literally everything because that would drive people to vigilante violence.
- tracker1 3y ago
  I'd be lying if I said I'd never thought about it. Given how many dejected people there are in society, including those who have had military training, I'm surprised there hasn't been more of it at this point.
  - jstarfish 3y ago
    We had a lot more vigilante justice in the 70s. It went away with the rise of tough-on-crime laws in the 80s (vicarious punishment) and eventual counter-domestic terrorism (suppression) in the 90s. Bernie Goetz would be crucified these days. 00s just became mob rule via social mechanisms and manipulation; cliquish behavior is not something you can shoot or detonate, so we're stuck with people taking out their frustrations on children at school and anybody unsuspecting. The dejected are only going after targets they can reach (a tragic, but logical outcome). There was one aspiring vigilante in the last few years who drove across the country to assassinate some scummy judge or something and was immediately caught while doing recon. His mistake was going after someone afforded protection. Everything is political and treated as terrorism. It's too risky to vote from the rooftops these days; there are an increasingly-infinite number of ways to fail.

kevinventullo 3y ago

I understand your defensiveness, but the article did not even imply that the CEO was directly implicated. That said, I think it is still at some level their responsibility if this fraud turns out to be true; “the person whose P&L was directly tied to these resales” still had ever stricter OKR’s they had to answer for, and apparently no double-checking or auditing was done because that person’s boss didn’t want to know. They were rewarded for numbers going up and to the right, as was their boss, as was their boss, up to the CEO. Sorry, I just tire of narratives where when a corporation does something morally wrong, it’s the fault of nebulous capitalist hyper-optimization and no individuals are held accountable.

koheripbal 3y ago
We need to make evidence based judgements, not accusation based judgements. I'm tired of the outage-clickbait. I'm here to learn, not to be emotionally manipulated.
- anigbrowl 3y ago
  There's evidence from one side in the lawsuits, while the defendants have so far declined to submit any for scrutiny. In any case, the title of this submission says that Fedex is 'accused' of fraud rather than having been found guilty of it, so you knew what you were getting before you clicked; you could have just ignored it.
  - singleshot_ 3y ago
    When someone files a complaint against you with a court of appropriate jurisdiction to start a lawsuit, your only sane option is to file an answer. The complaint lists their allegations point by point. The answer either admits or denies each allegation, point by point. It is not surprising that FedEx has declined to submit evidence for scrutiny. It’s not time for that yet. They will be required to do so in discovery and they better hope they can at trial but right now we should not expect to hear anything from them other than “admit, deny, insufficient basis to form a belief and therefore deny.” It’s just too early for an evidence based discussion. This is the nature of the civil action.

anigbrowl 3y ago

astounding the level of mind reading people have done In this case, though, Fedex has just denied the allegations but not proffered any alternative explanation. Nature abhors a vacuum, and human nature abhors an information vacuum. Corporations habitually refuse to share information unless they are forced to do so legally, so they have only themselves to blame for the subsequent distrust by the public.

Frost1x 3y ago

>...if there was fraud, it was probably committed at a non-executive level by the person whose P&L was directly tied to these resales. Or, it was done independently by the much smaller leasing company where this was more existential to them. I think most high-level executives are competent enough to create legal incentives and disincentives to their organization which typically are legal. The "lie, cheat, and steal" narrative is about functional outcomes and not so much about explicit follow through. Executives are in positions they can craft goals and to some degree pass responsibility of details of those goals off to others. I can set unrealistic targets that are only attainable by cutting corners and be sure to make it clear I'll drop people who don't meet those targets or reward people who do. I can leave in-depth questioning about the approach (the potentially dirty details) to create a layer of plausible deniability. It's as if I hire a driver to take me from point A to point B. That distance may be impossible to cover without violating an array of traffic laws. My goal as the passenger though is to traverse the space safely at some price. I don't really care about how it's done, I'll leave that to the driver. I can create pressure on a driver and/or apply selection bias to choosing a driver willing to take on my impossible request. At no point did I say: violate traffic laws, speed, etc. but I know that's what's going to happen to attain my goal. I never incriminate myself by making the goal generalized and as a passenger, I take on no legal risks for my driver violating traffic laws. Suddenly, using a crafted goal, careful selection, and money, I've created a situation for something illegal to happen. Should I be at fault? What if I even added to criteria of transporting me from A to B not to violate traffic laws but I give a wink wink, shove a little more money (incentive) at the problem, or turn the cheek when it occurs so I don't witness it. Am I still not at fault? A caricature of this behavior in my opinion is Donald Trump who operates completely in the grey areas wherever possible, pushing or promoting questionable behavior but avoiding the provable cases where he's responsible. From my interaction with various executives over the years, this strategy isn't unique. It's certainly not everyone but impossible environments and requests are made on the daily. It happens from the highest levels and gets passed down and down.

burkaman 3y ago

> Execs are already rich. To risk jailtime, which fraud can lead to, you'd need to see something more existential than slightly increasing margins on used van sales. This seems incredibly naive. You'd have to be willfully ignorant to think that a) rich people won't break the law to make a tiny bit more money, and b) fraud committed by large corporations often results in jail time. I agree with you that this article isn't worth very much, but that's only because lawsuits in general shouldn't be trusted without corroborating evidence, not because a rich executive would never do this.

deleted 3y ago
[deleted]
hinkley 3y ago
At some point it’s like an addiction. “No one becomes a billionaire without hurting a lot of people” is still true, though inflation will eventually make us have to change that to “multi-billionaire”.
ordu 3y ago
> This seems incredibly naive. I personally see nothing naive in the parent post. It brings arguments based on knowledge how organization works and appeals to a game theory (stakes do not match). I'm not saying the reasoning is necessarily valid, but it is not naive. The only part of the parent comment I do not approve from a methodology standpoint is an appeal to "exception that proves the rule". Exceptions do not prove rules, they disprove them.
- Negitivefrags 3y ago
  “No parking on Sundays” is an exception that proves the rule. The implied rule is that parking is allowed on Monday through Saturday. I almost never see this phrase used correctly however.
  - burkaman 3y ago
    I don't think there's a single "correct" way to use that phrase, different people understand it differently. The meaning I'm most familiar with is an obscure exception demonstrating that your rule of thumb is usually reliable. For example: "Street parking is always allowed" "Not always! Three years ago there was a marathon that went through this street and you weren't allowed to park here that morning." This exception is so specific and obscure that it "proves" (in a casual conversational sense) that "you can always park here" is a good rule. Not all exceptions prove the rule: if the exception is "except on weekends and holidays and overnight", that's so significant and obvious that it actually disproves the rule.

delfinom 3y ago

>1) This is taken from a complaint in a class action lawsuit. Class action lawyers are very similar to patent trolls whereby they can spin almost any story they want. The complaint has 4 cited individuals and follows up on an already ongoing lawsuit with a used vehicle dealer that filed a lawsuit in 2017 over being scammed as well.

delfinom 3y ago

>1) This is taken from a complaint in a class action lawsuit. Class action lawyers are very similar to patent trolls whereby they can spin almost any story they want. The complaint class action references 4 affected independent individuals as victims. But, this entire thing is in parallel with an already ongoing lawsuit by a used vehicle broker that filed a lawsuit in 2017 over being scammed as well. https://cdllife.com/2021/fedex-battles-lawsuit-over-millions-of-undisclosed-miles-on-resold-trucks/ https://cdllife.com/2021/fedex-battles-lawsuit-over-millions...

dghlsakjg 3y ago

Misrepresenting an odometer reading as true is a federal offense, and it seems clear that this happened in at least one of the cases in the article. I’ve never seen a car title that doesn’t have a field for noting an in accurate odometer. Federal rules also makes the seller sign an acknowledgement that the odometer reading is true, rolled over, or unknown. Maybe there was no conspiracy involved, and the fleet mechanics were just swapping out defective gauge clusters (somehow always swapping in a lower mileage cluster). So the best defense they have is that this was an accident of sloppy record keeping leading to a failure to make legally required disclosures… which is not a great defense.

hinkley 3y ago
I am willing to believe that if you shuffle a problem around enough you create a situation where nobody knows the truth and we’ve made it punishingly difficult to go get it. It would be easy in a delivery business for an odometer to roll over one or even twice, and if you assign the new kid to get rid of the old trucks he might assume things. That is not to absolve anyone. The truth can be a liability or an asset, and has to be managed not unlike inventory. But that’s not what happened here: > The lawsuit accuses FedEx of replacing the odometers in many of its vans with new ones that read zero miles, using the vans for a bit longer after that, and then selling them at auction with 100,000 miles or less on the new odometers. That stretches credulity. But also, if you buy a FedEx truck or a police cruiser thinking you got a good deal on a low mileage vehicle, you’re a fucking idiot. Of course they’re going to drive them into the ground before selling them.
- dghlsakjg 3y ago
  Right, but my point is that the truth is actually pretty easy in this case. There's a federal law that requires you to either swear that you know the odometer reading is accurate, that the odometer has rolled over, or that the true odometer reading is unknown. This disclosure is made on every vehicle sale, and there's a standard form. If you can't swear to the first two, you swear to the last one. I wouldn't assume that a low mileage fleet vehicle is necessarily beat. Maybe it was assigned to a short route (There's a FedEx route on Lopez Island in Washington, half his day is spent on the ferry), maybe it is being phased out early due to a change to electric. There's a lot of reasons FedEx might sell a low mileage vehicle, and if you have a legal document from a major corporation stating that the mileage is accurate, most people would trust that.

MarkMarine 3y ago

A few counter examples. Lol. Asbestos in talcum powder. PFAS exposure and dumping into public water supplies. Monsanto and roundup. Cigarettes health effects. Climate change from burning hydrocarbons. Norfolk southern and the controlled burn in east palistine. I could literally go on and on about the history of execs poisoning people and the planet while knowing full well about it. All to keep the profit margin, but you know this stuff you’re just willfully ignoring it. If you’re an ethical executive, you’re a unicorn.

fkyoureadthedoc 3y ago
> but you know this stuff you’re just willfully ignoring it. That sure is what it seems like. C-level solidarity, even managed to blame the peons with just as little evidence as everyone else blaming the execs...
- salawat 3y ago
  There:s a difference between strategic "say no evil, see no evil,..." Which is rampant in C-level management, and the public having difficulty leveraging legal discovery processes against corporations with far more budget to throw at defanging or maliciously complying with such request, and there "being no evidence". Evil exists. Stop shoving your head in the sand and realize it's an uphill fight.
playingalong 3y ago
I agree with your first paragraph. The last sentence is a stretch though. The fact that there were multiple execs who were blatantly unethical doesn't mean most execs are unethical.
- MarkMarine 3y ago
  Would it be better if I listed every instance of executives choosing to poison people, willfully put them in dangerous working conditions to save some money against the law, releasing products they knew would maim people or kill people… all for marginal increases in share price? It’s a long freaking list. This is the way this system is setup. Executives pursue profit at the expense of everything else. This is the cornerstone of capitalism.

hinkley 3y ago

I don’t think the VW situation is at all unique, just the handling of it. I understood Deiselgate because I’ve worked for managers who just wanted checkboxes checked, and I’ve seen people who reward monetarily or with praise for solving problems but who don’t check for dead bodies before doing so. Too many coworkers who get promoted for making messes others had to clean up. What if the cleaners don’t exist in sufficient numbers? Or get laid off? When you combine a mercenary mind with oversight from a person who doesn’t believe in “if it seems too good to be true, it probably is” that’s when the bad stuff starts to happen. There’s also a machismo school of business that lionizes force of will. Telling employees you want something that seems impossible and expecting them to get it. Nevermind that by far the easiest way to cross an impossible finish line is to cheat your ass off. How many products do we need class action suits on? How many exposes on child or captive labor? How many superfund sites? How many companies going bankrupt ten years later when the truth comes out, before we hold people accountable and call bullshit on the “aw shucks” response to tough questions? Or maybe a Bachelor of Arts from a business school is not enough rigorous education to run a multinational company.

Alupis 3y ago

> VW emissions scandal VW is in the business of selling vehicles, and has a real interest there to push the envelope as much as possible. FedEx is not in the business of selling used vehicles. These vehicle sales likely don't impact their core business in the slightest - making an organization-wide scandal just silly to even think about. Looking online, these types of "vans" sell for anywhere between $5,000 and $30,000 (with 4 digit miles)[1]. Seriously... FedEx isn't going to blink at any of this. These class actions are always brought by bottom-feeding lawyers that use serial-plaintiffs. The reality is the class action bit will be retracted, and the lawyers, err, plaintiff will receive a "go the hell away please" payment. That's the game here... [1] https://www.auctiontime.com/listings/trucks/auction-results/219623617/2000-freightliner-m-line https://www.auctiontime.com/listings/trucks/auction-results/...

MikeHolman 3y ago
I'm sure this isn't something at the exec level, but it seems possible someone somewhere in middle management who oversaw used van sales wanted to increase their revenue numbers and thought cheating the odometer would be an easy way to boost their numbers.
- Alupis 3y ago
  It's not even clear if FedEx has anything to do with this. The other named defendant is "Holman Fleet Leasing", which seems to imply these vehicles were leased to FedEx. If that's the case, then any possible scandal here would be squarely on the company selling the vehicles - not FedEx. FedEx might just be a tacked-on name. You see that quite often with Prop 65 cases. The plaintiff attorneys add anyone even remotely related to the case, just to drive up pressure and chaos, hoping for quicker/larger settlement offers. In this situation, even if FedEx has nothing to do with vehicles sales, they might opt to settle and write a check just to make the bad publicity go away. If you think that sounds like a shakedown, you'd be right.
  - fatfingerd 3y ago
    In a civil case this is the right thing to do. Chances are good that a company as large as FedEx very closely met with leasing providers and discussed how they were going to get those costs down, better than if FedEx didn't lease. The lawyers would be silly not to fish for signs that FedEx knew a bit about why it could get the leasing rates it wanted.

curiousllama 3y ago

I think what you may be missing is the effect of compounding organizational incentives in big, old companies. I wonder - how much experience have you had in large legacy companies? (think "F100 company's subsidiary, based in Dubuque" type company) I once helped fix up a manufacturing co that materially overstated net income by >10% for a decade. And it was just a mix of honest mistakes, miscommunications, some incompetence, and a shockingly small amount of fraud (though not 0). I learned it's really easy for sr execs to run the company badly, one or two junior execs to push the limits, and a everyone else to just be a biiiit lazy - and bam, there's a big fraud. That said 0 stock is up 5% w/w, so this can't be THAT big

sashank_1509 3y ago

Very well said. Let’s bring a few salient points: All of us here work at jobs, possibly in very large corporates. Do we see anything illegal going on? I would reckon that >90% of us have gone through our corporate life without ever being a part of anything close to even illegal, at worst we forward something to legal to be extra sure. So if we think corporations are regularly behaving illegally, we all have simultaneously seemed to have lucked out to be in the one the one ethical and legally compliant organization. If some part of your worldview is that the world is being filled with greedy, selfish and unethical people, constantly trying to screw over others but you are the exception most likely your worldview is completely off (Most people view themselves as the good guy/ hero of their world). In my experience it is very unlikely for anyone in C Suite to ever risk any actual fraud in their dealings (or anyone in the organization really), however lawyers are essentially parasites on society who feed on productive work to make a living while gaslighting rest of society into believing that they’re playing an important role in protecting it.

ncallaway 3y ago
> All of us here work at jobs, possibly in very large corporates. Do we see anything illegal going on? I would reckon that >90% of us have gone through our corporate life without ever being a part of anything close to even illegal, at worst we forward something to legal to be extra sure. So if we think corporations are regularly behaving illegally, we all have simultaneously seemed to have lucked out to be in the one the one ethical and legally compliant organization. This line of argument only works if the majority of a company is exposed to illegal behavior. If a large company can commit (or attempt to commit) illegal behavior, while making that behavior only visible to a small fraction of people, then this argument falls apart. For example, how many people were involved and aware of the VW emissions scandal? 200? 400? Out if 200,000 worldwide employees. So >99% of VW employees would have likely reported not having observed illegal behavior. That does not mean that those employees “lucked out” into working for an ethical legally-compliant company. It means the company is smart enough to hide its unethical and disreputable behavior from its employees as much as possible.

johndhi 3y ago

Helpful perspective. As a lawyer who has worked on both sides of class actions, I generally classify these cases in four categories: -Legit cases that describe (or at least ultimately lead to finding) clear and meaningful wrongdoing. There's always some room for arguing one way or the other but ultimately there's some clarity that something meaningfully wrong happened. I think these are probably ~3-5 percent of cases filed. These cases tend to settle relatively early for high dollar figures. -Cases of clear but unimportant wrongdoing. Technically a statute was violated, but no one was really hurt at all. These tend to settle for small $ figures. Perhaps 20% of cases. -Important but unclear wrongdoing (evidence supports either finding; among one million documents, some look really bad, while others look very exculpatory). These stick around for a long time and ultimately earn lawyers a lot but cost the parties, on average, a lot of money to litigate. Perhaps 30% of cases. -Complete/fabricated nonsense and/or fishing expeditions. Cost defendants a fair amount (and brutal for small defendants), but not the end of the world for big defendants. Perhaps 50% of cases.

freejazz 3y ago

>1) This is taken from a complaint in a class action lawsuit. Class action lawyers are very similar to patent trolls whereby they can spin almost any story they want. And journalists go for clicks, so they amplify the sensationalism. It doesn't mean this is one of those, but a class action complaint should not just blindly be trusted. Do you think the rules that apply to patent litigators and class action litigators are different than the rules that apply to other litigators? I really don't understand what you seem to think is going on here, it's a bit naive imo (all the lawyers that I don't like are the bad ones and they lie!) and I didn't even make it to your next part of your post, where you think that business executives are the honest ones! They aren't. They don't have their own personal license and livelihoods at risk most of the time, unlike attorneys.

WheatMillington 3y ago

Fantastic comment and insight, thank you.

esotericimpl 3y ago

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NoMoreNicksLeft 3y ago

> There is a strong theme of "of course execs lie cheat steal at every turn" and I also think this narrative should be questioned. This narrative is "middle-middle management lies, cheats, and steals at every turn and sometimes on other people's turns too". And while we might question that narrative about execs, we know that it is unfailingly true of middle management. It's not unexpected, that's what happens when perverse incentive is piled on top of perverse incentive. Someone was racing for a bonus. And discovery's going to show that there was some absurd uptick in how many OEM odometers for this model were ordered in the problem years, far in excess of anything that had happened previously.

scrubs 3y ago

"To risk jailtime..." Corporate America unfortunately does not worry about jail time. Instead fines are primarily paid from shareholder cash. I wish jailtime was an impediment. It's not