6 ms·

CEO of Kubient sentenced for fraud

167 points by pseudolus 2y ago

micromacrofoot 2y ago
it's always the ones you most expect
cm2187 2y ago
For once it's not crypto.
- Zopieux 2y ago
  It isn't news that AI is the newest tech grift (and just as power hungry). Sure, some few legitimate and cool uses. So much if it isn't though, and we're just getting started.
neverokay 2y ago
[flagged]
- BoredPositron 2y ago
  Steve Eisman (short holder against cdos) said the following in 2008: >> We live in an era of fraud in America. Not just in banking, but in government, education, religion, food, even baseball... What bothers me ins't that fraud is not nice. Or that fraud is mean. For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. Eventually you get caught, things go south. When the hell did we forget all that? I thought we were better than this, I really did. He was right and it got even worse, there should have been no bailout. It set a dangerous precedent that is still haunting us, effectively granting those responsible impunity.
  - neverokay 2y ago
    Kind of makes you think, that all those ancient texts about greed, corruption, temptation, lust, and so on, was all real. Truly real, those things are here at scale and always have been. Just echoing your post, but, some things need to be echoed for eternity.
  - paulpauper 2y ago
    Eventually you get caught, things go south. When the hell did we forget all that Court records are public. People have been charged and arrested, like this story and many others. FTX founder got 25 years. To say fraud is being unpunished is unsupported by the evidence. This was true in the early 2000s when Enron and WorldCom execs were charged and got long sentences. As bad as fraud is here, it's likely worse compared in other countries when controlling for demographics. I think only China is harder on fraud, in which death penalty is used.
    - BoredPositron 2y ago
      Your examples are the ones that stole the money from the wrong guys. If you just go for the middle or lower class nothing will happen to you. Look at the Sacklers... for a more recent example. Purdue settled for $24 million, admitting no liability, sealing the deposition.
      - ChrisMarshallNY 2y ago
        > for a more recent example. Purdue settled for $24 million, admitting no liability, sealing the deposition I'm not sure that's "the Big One," though. The Sacklers keep trying to make bigger and bigger settlement offers, on the condition they are shielded from civil action, and the settlements keep getting nuked.
        BoredPositron 2y ago
        You are right I wasn't up to date but it's still peanuts standing against the $35bn [1] in profits from oxy. They basically settled to pay 15 years of interest on it with 0 jail time for executives. These settlements are also always the same they NEVER exceed or even match the fraudulent profits. If I steal $100 from you and I’ll pay $24 back in $2 installments over a year you wouldn’t call it justice you probably would call it fraud. >> On January 23, 2025, the Sackler family and Purdue settled the lawsuit they faced, in a $7.4bn deal with states and individuals. The Family agreed to pay $6.5bn over 15 years, while Purdue agreed on $900mn in settlements. [2] [1] https://www.newyorker.com/magazine/2017/10/30/the-family-that-built-an-empire-of-pain https://www.newyorker.com/magazine/2017/10/30/the-family-tha... [2] https://ft.pressreader.com/1389/20250124/281663965680298 https://ft.pressreader.com/1389/20250124/281663965680298
  - everdrive 2y ago
    > For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. A statement like this can only come from someone who has never heard of Ea Nasir.
    - teddyh 2y ago
      That’s “Ea-nāṣir”.
  - autoexec 2y ago
    > For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. Eventually you get caught, things go south. When the hell did we forget all that? The problem is that for far too many people fraud and short sighted thinking have been working out great. Really great. Fraud and short sighted thinking have been making people money hand over fist. It's turned people into billionaires. Occasionally one of them gets a slap on the wrist, on extremely rare occasions one of them will end up behind bars, true, but the more money you make the less likely that becomes. Eventually you get people who are literal serial killers but are basically untouchable because even while they commit crimes repeatedly, publicly, admittedly, they are rich enough to be above the law. The "eventually you get caught" argument no longer holds up. The "things go south" argument is still true, but things don't go south for the people making a fortune committing crimes. They go south for the rest of us. The solutions to fraud and corruption haven't changed. It takes transparency and accountability. Until we have those things consistently both corporations and assholes will continue to do whatever makes them the most money regardless of what laws they break or who gets hurt.
    - LadyCailin 2y ago
      I think people have forgotten they massively outnumber the billionaires by a gigantic margin, in large part, because the billionaires have convinced them that one day, if they work hard enough, they too can be billionaires, and they are just temporarily embarrassed billionaires, rather than doomed to always be stuck to the bottom of the billionaire’s shoes.
  - Terr_ 2y ago
    > What bothers me [isn't] that fraud is not nice. Or that fraud is mean. What bothers me is that fraud stopped being taboo. People started to revel in it, to brag, and--to the detriment of America--promote and vote-for braggarts of fraud. > When the hell did we forget all that? It started to become venerated as a sign of power: "Look at me, I blatantly did X and evaded the expected consequences, therefore I must be doing something worth allying with." A kind of self-reinforcing bubble, like "too big to fail", except "too smart/crooked to get punished".
- Aurornis 2y ago
  You can find similar proclamations from people of every era going back as far as people have been writing their thoughts down.
- no_wizard 2y ago
  Edit: for the sake of discussion can we unflag the parent? There are some legit interesting conversations that will be missed due to the parent comment being flagged I had a nice chat not that long ago with someone who founded a very successful software business and has worked in tech since the 1980s. They said something that really stuck with. He said that the problem he has seen with today’s entrepreneurs is that in order to get ahead anymore, everyone got comfortable with breaking the rules At first it was rhetorical, like tearing down old business culture or norms. However at some point that morphed - he said somewhere around 2014 or so he notice a big shift in attitudes from investors in down, in that breaking the rules went from simply the rhetorical to the literal. This was the beginning of what he feels is widespread rule breaking turned into breaking the law, eschewing civil norms in the name of profit and generally the shift from “let’s solve interesting problems and help people” to “let’s make as much money as possible before anyone looks too closely at this” became the norm not the exception. He feels that in today’s world of business breaking the law to get ahead is now an accepted strategy and as a result it is harder than ever to run an honest business that gets ahead fair and square. I always think about this conversation when I think about issues related to tech and society
  - neverokay 2y ago
    Do you think leaders should have moral training? And if so, how would such training be provided? Ytcombinator itself maybe deficient in providing moral guidance, but this just one anecdote. What does it say about our mentors and community leaders when they stay out of the moral and simply stay in the technical and business? Mark Zuckerberg had to turn around and beg forgiveness from the parents of social media users in Congress. This needed to be broadcast globally, and witnessed, because that event shows the full power of the entire history of what this all was, that by the end of it we had to beg forgiveness. I do believe we’ve crossed a threshold and these topics are now in the forefront. The moral question.
    - bboygravity 2y ago
      Maybe just enforce law would be a good start I would think.
    - 2y ago
- ohgr 2y ago
  What recent batch? It’s always been like this. It’s documented going back a few thousand years. Also let’s not attribute any of this to anything other than the will of man. Very very stupid asshole man mostly.
  - deleted 2y ago
    [deleted]
  - healsdata 2y ago
    People have this frustrating tendency to see any spike in bad behavior as the worse that it has ever been. I recently saw someone say that anti-Semitism has never been worse and they were getting tons of folks agreeing. I'm sure there's a name for this sort of myopia in psychology.
- mkagenius 2y ago
  Those who do immoral stuff don't do reflecting and all
paulpauper 2y ago
This is not unheard of for the fraud-fighters to be fraudsters themselves even after reforming, in which the redemption arc becomes just another scam. Barry Minkow Frank Abagnale
- Gigachad 2y ago
  [flagged]
  - watwut 2y ago
    He never reformed. He was fraudster , now he got political power and continues as before.
  - tim333 2y ago
    I was thinking it would be ironic and not totally implausible if DOGE pledging to find fraud ends up done for fraud.
  - Muromec 2y ago
    [flagged]
Aurornis 2y ago
> Revenues for the first quarter of 2020 were shown as $1.38 million, a huge jump from $177,635 in Q1 2019, thanks to "two enterprise customers" that "successfully beta tested KAI." TL;DR: Their revenue was the result of round-tripping spending through a partner company who agreed to “spend” the same amount of money back into Kubient. They created fake reports to show to auditors to cover up the synthetic revenue. They generated fake revenue with the help of another company and then IPO-ed months later. Truly a sign of the times in that era of SPACs and other ridiculous market offerings.
- bhaney 2y ago
  When countries do this it's "real GDP growth"
  - stogot 2y ago
    GDP is a different and often bad measure.
- anonymousiam 2y ago
  Sounds a lot like most cryptocurrency exchanges.
nextts 2y ago
Small enough to fail and jail.
rvz 2y ago
A new candidate for the running for being the Theranos of AI has just been found.
aaplok 2y ago
> Paul Roberts is due to serve one year and one day in prison. What's the point of the extra day? Is there some kind of special procedure for people who get strictly more than a year?
- minikomi 2y ago
  Perhaps he committed fraud on a leap year
- twright0 2y ago
  According to sixty seconds of googling[0], the extra day makes them eligible for sentence reduction for good behavior. [0]: https://kmlawfirm.com/2022/06/23/whats-the-deal-with-a-year-and-a-day-sentences-or-why-defendants-welcome-the-extra-day/ https://kmlawfirm.com/2022/06/23/whats-the-deal-with-a-year-...
- deleted 2y ago
  [deleted]
- seabass-labrax 2y ago
  Crimes can be either misdemeanors or felonies in the USA, and they are automatically considered to be the latter if the prison sentence is over a year in length. Therefore he might have been sentenced to the extra day to ensure that his criminal record includes a felony. This would prevent him from getting a job in finance, for instance, even after having served his sentence. PS. I am not American, let alone an American lawyer, so don't take my word for it!
  - hn_throwaway_99 2y ago
    This is incorrect. In the federal system, while felonies are punishable by imprisonment over a year and misdemeanors by imprisonment up to a year, the important word is punishable - whether the crime is a felony or a misdemeanor is simply inherent to the charge, and if you are convicted, the nature of the crime doesn't change based on the imposed sentence. E.g. if you are convicted of a felony but receive a prison sentence of a year or less, you're still a felon - the charge doesn't just turn into a misdemeanor because you received a shorter sentence.
globalise83 2y ago
[flagged]
moralestapia 2y ago
"CEO of AI ad-tech firm pledging “world free of fraud” sentenced for fraud" Classic of the genre.

167 points by pseudolus 2y ago

micromacrofoot 2y ago

it's always the ones you most expect

cm2187 2y ago

For once it's not crypto.

Zopieux 2y ago
It isn't news that AI is the newest tech grift (and just as power hungry). Sure, some few legitimate and cool uses. So much if it isn't though, and we're just getting started.

neverokay 2y ago

[flagged]

BoredPositron 2y ago
Steve Eisman (short holder against cdos) said the following in 2008: >> We live in an era of fraud in America. Not just in banking, but in government, education, religion, food, even baseball... What bothers me ins't that fraud is not nice. Or that fraud is mean. For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. Eventually you get caught, things go south. When the hell did we forget all that? I thought we were better than this, I really did. He was right and it got even worse, there should have been no bailout. It set a dangerous precedent that is still haunting us, effectively granting those responsible impunity.
- neverokay 2y ago
  Kind of makes you think, that all those ancient texts about greed, corruption, temptation, lust, and so on, was all real. Truly real, those things are here at scale and always have been. Just echoing your post, but, some things need to be echoed for eternity.
- paulpauper 2y ago
  Eventually you get caught, things go south. When the hell did we forget all that Court records are public. People have been charged and arrested, like this story and many others. FTX founder got 25 years. To say fraud is being unpunished is unsupported by the evidence. This was true in the early 2000s when Enron and WorldCom execs were charged and got long sentences. As bad as fraud is here, it's likely worse compared in other countries when controlling for demographics. I think only China is harder on fraud, in which death penalty is used.
  - BoredPositron 2y ago
    Your examples are the ones that stole the money from the wrong guys. If you just go for the middle or lower class nothing will happen to you. Look at the Sacklers... for a more recent example. Purdue settled for $24 million, admitting no liability, sealing the deposition.
    - ChrisMarshallNY 2y ago
      > for a more recent example. Purdue settled for $24 million, admitting no liability, sealing the deposition I'm not sure that's "the Big One," though. The Sacklers keep trying to make bigger and bigger settlement offers, on the condition they are shielded from civil action, and the settlements keep getting nuked.
      - BoredPositron 2y ago
        You are right I wasn't up to date but it's still peanuts standing against the $35bn [1] in profits from oxy. They basically settled to pay 15 years of interest on it with 0 jail time for executives. These settlements are also always the same they NEVER exceed or even match the fraudulent profits. If I steal $100 from you and I’ll pay $24 back in $2 installments over a year you wouldn’t call it justice you probably would call it fraud. >> On January 23, 2025, the Sackler family and Purdue settled the lawsuit they faced, in a $7.4bn deal with states and individuals. The Family agreed to pay $6.5bn over 15 years, while Purdue agreed on $900mn in settlements. [2] [1] https://www.newyorker.com/magazine/2017/10/30/the-family-that-built-an-empire-of-pain https://www.newyorker.com/magazine/2017/10/30/the-family-tha... [2] https://ft.pressreader.com/1389/20250124/281663965680298 https://ft.pressreader.com/1389/20250124/281663965680298
- everdrive 2y ago
  > For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. A statement like this can only come from someone who has never heard of Ea Nasir.
  - teddyh 2y ago
    That’s “Ea-nāṣir”.
- autoexec 2y ago
  > For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. Eventually you get caught, things go south. When the hell did we forget all that? The problem is that for far too many people fraud and short sighted thinking have been working out great. Really great. Fraud and short sighted thinking have been making people money hand over fist. It's turned people into billionaires. Occasionally one of them gets a slap on the wrist, on extremely rare occasions one of them will end up behind bars, true, but the more money you make the less likely that becomes. Eventually you get people who are literal serial killers but are basically untouchable because even while they commit crimes repeatedly, publicly, admittedly, they are rich enough to be above the law. The "eventually you get caught" argument no longer holds up. The "things go south" argument is still true, but things don't go south for the people making a fortune committing crimes. They go south for the rest of us. The solutions to fraud and corruption haven't changed. It takes transparency and accountability. Until we have those things consistently both corporations and assholes will continue to do whatever makes them the most money regardless of what laws they break or who gets hurt.
  - LadyCailin 2y ago
    I think people have forgotten they massively outnumber the billionaires by a gigantic margin, in large part, because the billionaires have convinced them that one day, if they work hard enough, they too can be billionaires, and they are just temporarily embarrassed billionaires, rather than doomed to always be stuck to the bottom of the billionaire’s shoes.
- Terr_ 2y ago
  > What bothers me [isn't] that fraud is not nice. Or that fraud is mean. What bothers me is that fraud stopped being taboo. People started to revel in it, to brag, and--to the detriment of America--promote and vote-for braggarts of fraud. > When the hell did we forget all that? It started to become venerated as a sign of power: "Look at me, I blatantly did X and evaded the expected consequences, therefore I must be doing something worth allying with." A kind of self-reinforcing bubble, like "too big to fail", except "too smart/crooked to get punished".
Aurornis 2y ago
You can find similar proclamations from people of every era going back as far as people have been writing their thoughts down.
no_wizard 2y ago
Edit: for the sake of discussion can we unflag the parent? There are some legit interesting conversations that will be missed due to the parent comment being flagged I had a nice chat not that long ago with someone who founded a very successful software business and has worked in tech since the 1980s. They said something that really stuck with. He said that the problem he has seen with today’s entrepreneurs is that in order to get ahead anymore, everyone got comfortable with breaking the rules At first it was rhetorical, like tearing down old business culture or norms. However at some point that morphed - he said somewhere around 2014 or so he notice a big shift in attitudes from investors in down, in that breaking the rules went from simply the rhetorical to the literal. This was the beginning of what he feels is widespread rule breaking turned into breaking the law, eschewing civil norms in the name of profit and generally the shift from “let’s solve interesting problems and help people” to “let’s make as much money as possible before anyone looks too closely at this” became the norm not the exception. He feels that in today’s world of business breaking the law to get ahead is now an accepted strategy and as a result it is harder than ever to run an honest business that gets ahead fair and square. I always think about this conversation when I think about issues related to tech and society
- neverokay 2y ago
  Do you think leaders should have moral training? And if so, how would such training be provided? Ytcombinator itself maybe deficient in providing moral guidance, but this just one anecdote. What does it say about our mentors and community leaders when they stay out of the moral and simply stay in the technical and business? Mark Zuckerberg had to turn around and beg forgiveness from the parents of social media users in Congress. This needed to be broadcast globally, and witnessed, because that event shows the full power of the entire history of what this all was, that by the end of it we had to beg forgiveness. I do believe we’ve crossed a threshold and these topics are now in the forefront. The moral question.
  - bboygravity 2y ago
    Maybe just enforce law would be a good start I would think.
  - 2y ago
ohgr 2y ago
What recent batch? It’s always been like this. It’s documented going back a few thousand years. Also let’s not attribute any of this to anything other than the will of man. Very very stupid asshole man mostly.
- deleted 2y ago
  [deleted]
- healsdata 2y ago
  People have this frustrating tendency to see any spike in bad behavior as the worse that it has ever been. I recently saw someone say that anti-Semitism has never been worse and they were getting tons of folks agreeing. I'm sure there's a name for this sort of myopia in psychology.
mkagenius 2y ago
Those who do immoral stuff don't do reflecting and all

paulpauper 2y ago

This is not unheard of for the fraud-fighters to be fraudsters themselves even after reforming, in which the redemption arc becomes just another scam. Barry Minkow Frank Abagnale

Gigachad 2y ago
[flagged]
- watwut 2y ago
  He never reformed. He was fraudster , now he got political power and continues as before.
- tim333 2y ago
  I was thinking it would be ironic and not totally implausible if DOGE pledging to find fraud ends up done for fraud.
- Muromec 2y ago
  [flagged]

Aurornis 2y ago

> Revenues for the first quarter of 2020 were shown as $1.38 million, a huge jump from $177,635 in Q1 2019, thanks to "two enterprise customers" that "successfully beta tested KAI." TL;DR: Their revenue was the result of round-tripping spending through a partner company who agreed to “spend” the same amount of money back into Kubient. They created fake reports to show to auditors to cover up the synthetic revenue. They generated fake revenue with the help of another company and then IPO-ed months later. Truly a sign of the times in that era of SPACs and other ridiculous market offerings.

bhaney 2y ago
When countries do this it's "real GDP growth"
- stogot 2y ago
  GDP is a different and often bad measure.
anonymousiam 2y ago
Sounds a lot like most cryptocurrency exchanges.

nextts 2y ago

Small enough to fail and jail.

rvz 2y ago

A new candidate for the running for being the Theranos of AI has just been found.

aaplok 2y ago

> Paul Roberts is due to serve one year and one day in prison. What's the point of the extra day? Is there some kind of special procedure for people who get strictly more than a year?

minikomi 2y ago
Perhaps he committed fraud on a leap year
twright0 2y ago
According to sixty seconds of googling[0], the extra day makes them eligible for sentence reduction for good behavior. [0]: https://kmlawfirm.com/2022/06/23/whats-the-deal-with-a-year-and-a-day-sentences-or-why-defendants-welcome-the-extra-day/ https://kmlawfirm.com/2022/06/23/whats-the-deal-with-a-year-...
deleted 2y ago
[deleted]
seabass-labrax 2y ago
Crimes can be either misdemeanors or felonies in the USA, and they are automatically considered to be the latter if the prison sentence is over a year in length. Therefore he might have been sentenced to the extra day to ensure that his criminal record includes a felony. This would prevent him from getting a job in finance, for instance, even after having served his sentence. PS. I am not American, let alone an American lawyer, so don't take my word for it!
- hn_throwaway_99 2y ago
  This is incorrect. In the federal system, while felonies are punishable by imprisonment over a year and misdemeanors by imprisonment up to a year, the important word is punishable - whether the crime is a felony or a misdemeanor is simply inherent to the charge, and if you are convicted, the nature of the crime doesn't change based on the imposed sentence. E.g. if you are convicted of a felony but receive a prison sentence of a year or less, you're still a felon - the charge doesn't just turn into a misdemeanor because you received a shorter sentence.

globalise83 2y ago

[flagged]

moralestapia 2y ago

"CEO of AI ad-tech firm pledging “world free of fraud” sentenced for fraud" Classic of the genre.