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Ex-CEO, ex-CFO of iLearningEngines charged with fraud
- gnabgib 7mo agoiLearningEngines .. hindenburg did some research ILearningEngines: An AI SPAC with Artificial Partners and Artificial Revenue (2 years ago) https://news.ycombinator.com/item?id=41390619 https://news.ycombinator.com/item?id=41390619
- dmix 7mo agoFederal investigations always take forever.
- bandrami 7mo agoIt's a real problem at this point. People still say "nobody went to jail for the GFC" even though over 200 people did in the US; it's just it took a decade and nobody actually paid attention a decade later when they went to jail.
- lupire 7mo agoFall guys. Highest Profile Individuals Convicted Kareem Serageldin (Credit Suisse): Widely recognized as the only high-level Wall Street executive to serve prison time directly related to the GFC.
- deleted 7mo ago[deleted]
- bandrami 7mo agoNo that's still about a decade out of date. TARP jailed IIRC 30 bank CEOs, it's just the cases took until 2017 or so and the meme had already implanted itself in people's brains. DoJ got so tired of people saying this that they put a database of all their convictions up but unfortunately it got DOGEd last year. Many of the TARP convictions (the ones that involved the SEC) can still be found here, though: https://www.sec.gov/enforcement-litigation/litigation-releases https://www.sec.gov/enforcement-litigation/litigation-releas...
- Esophagus4 7mo agoVery cool website. Looking through a few of those examples, holy Jesus there is a lot of fraud out there. Fun read.
- bandrami 7mo agoI'm sad DOGE killed the TARP litigation database because there was some wild stuff on it
- dpkirchner 7mo agoWhat about the fraud that led up to the GFC -- pre-TARP? I think that's what people meme about.
- bandrami 7mo agoThe TARP investigations jailed people for that; that was it's main purpose. Taking the funding window required an audit, and people either lied on the audit (and got busted for that) or admitted to illegal lending or valuation on it (and got busted for that)
- dghlsakjg 7mo agoFor a multi-trillion dollar fuckup involving an entire industry... that seems low.
- chollida1 7mo ago> It's a real problem at this point. People still say "nobody went to jail for the GFC" even though over 200 people did in the US; it's just it took a decade and nobody actually paid attention a decade later when they went to jail. Did over 200 people in the US go to jail for the GFC? I just tried looking and I only see 1 person in the US. Iceland had about 25.
- shoo 7mo agoHindenburg Research is great. They also did the Nikola expose (that bunch of shysters who claimed to have electric truck technology where their truck couldn't even move under its own power so they filmed it rolling down a gentle slope). For anyone wanting to get into the weeds about detecting accounting fraud, the book "Financial Shenanigans" has lots of historical examples of ways company executives have cooked the books to make their public company financial statements appear more appealing to investors than they actually are.
- valianteffort 7mo ago[flagged]
- gnz11 7mo agoI suppose it's a cultural thing for Americans then too, given the current White House occupant? I don't know, maybe every culture just has their share of shitty people.
- mandeepj 7mo ago> given the current White House occupant Just listen to him speak from a podium in a red state while claiming start of a golden age, revenue of $18 trillion from tariffs, and we won in Iran, at least 50% of the crowd starts clapping. Makes me feel either I'm living in an alternate world or they are.
- ellenhp 7mo agoI don't know how much it has to do with the administration and the top-level comment here was flagged so I'm lacking context but American exceptionalism is instilled here from birth so it does not surprise me in the slightest that founders grow up with the idea that they are built different and destined to change the world. Acting out the fantasy via fraud takes a special kind of person. It's not clear to me whether the dishonesty is uniquely American but I somewhat doubt it. The color of the delusion is, however.
- himata4113 7mo agothere's x evil people per million in every country, india just happens to have a lot of people. china tends to keep things within their borders.
- hennell 7mo agoSomeone call the Olympics because this is the largest jump I've ever seen.
- miltava 7mo agoHow many big fraud cases happened in the US over the last decade? I can think of many of them. Would u say that it’s a cultural thing in the US because of that? So ur statement is more about prejudice than anything.
- randycupertino 7mo ago> they defrauded investors and lenders by fabricating "virtually all" of the now-bankrupt company's customer relationships and revenue. > According to the indictment, the defendants used forged sham contracts to make it seem that iLearning's customers were real, and used "round trip" transfers of investor and lender funds -- meaning they sent money to purported customers, who then returned it to iLearning -- to manufacture revenue. > At least 90% of iLearning's $421 million of reported revenue in 2023 was fabricated, the indictment said. > The company went public in April 2024, and its market value on the Nasdaq peaked at $1.5 billion before a prominent short-seller questioned its reported revenue. For the record the short sellers who blew up the fraud were Hindenburg Research. This is the second AI company they've discovered that is a scam, the other being Super Micro with their chip-selling scam: https://www.forbes.com/sites/tylerroush/2026/03/20/super-micro-shares-plunge-25-after-co-founder-charged-in-25-billion-ai-chip-smuggling-plot/ https://www.forbes.com/sites/tylerroush/2026/03/20/super-mic...
- walrus01 7mo agoSupermicro isn't an "AI company", it's a Taiwanese origin x86 server/industrial/embedded hardware manufacturer with roots that go back 30 years.
- ethanwillis 7mo agoUnfortunately, in 2026 even shoe companies are "AI companies"
- onemoresoop 7mo agoHalf a decade ago they were all blockchain companies. Before that I don’t remember, what was the buzzword, big data?
- jordanb 7mo agoExtremely briefly: metaverse. But yeah before that big data and SaaS had quite a run.
- mandeepj 7mo agoUsing the right channels, they can buy a pardon. Let's see how it unfolds.
- da_chicken 7mo agoNo, that seems unlikely. They committed the cardinal sin of stealing from the rich.
- dylan604 7mo agoAlso probably why SBF is yet to be pardoned
- wj 7mo agoHe was a big supporter of the Democratic Party which would not necessarily lead to a pardon with the Republican administration.
- stingraycharles 7mo agoHe supported both parties.
- zzrrt 7mo agoEric Adams is a Democratic politician, whom Trump's DOJ dropped charges for political favors from Adams. For the right bargain they don't even care about the party.
- vkou 7mo agoTrevor Milton received an unconditional pardon for his Nikola fraud last year. Trump has no problem selling pardons to people who stole from the rich. It's a big club, and he's open for business.
- deleted 7mo ago[deleted]
- nickpinkston 7mo agoPlay with fire, and you get burned... These scams are all too frequent today, and putting these guys and others like them in prison would act as a deterrent. We'll see if our system can actually hold any white collar criminals accountable though...
- jandrewrogers 7mo agoA lot of these people do go to prison but know one pays attention long enough to notice. This same scam was common during the dotcom boom in the 1990s. A lot of people went to prison but every generation needs to learn this lesson the hard way apparently.
- bandrami 7mo agoIf they arrest everyone who does a wash transaction to generate the appearance of revenue there aren't going to be many founders left standing in 2026.
- PedroBatista 7mo agoIt appears what really ended their little scam was the $421 million of reported revenue based on complete lies. Because lying to investors about product hasn't been really an issue lately, even Intel ~5 years ago did some presentations that were a complete fantasy back when they were desperate to keep their stock value but could not produce a chip smaller than 14nm. If they prosecute CEOs based on lies to investors other than accounting, almost all AI startups would go down.
- ralph84 7mo agoCEOs can say basically anything when it's talking about the future. They just have to include a safe harbor disclaimer about forward-looking statements.
- deleted 7mo ago[deleted]
- yalogin 7mo agoUnfortunately there is a real chance they get pardoned or just their cars dropped for a small sum of 1-5 million dinner.
- onemoresoop 7mo agoThe unscrupulous in the white house will take your money (for a pardon) no matter what the crime.
- burnt-resistor 7mo agoNo, no, no... money doesn't change hands directly. It's investment in the regime's crypto coin in the proper amount.
- moomoo11 7mo ago[flagged]
- markdown 7mo ago> Why’s it almost always south asians It isn't. It's very rarely south asians.
- ChrisMarshallNY 7mo agoI think most of the stories I’ve read, lately, are about good old-fashioned WASPs. Some, from fairly wealthy backgrounds. But it will generally be reflective of the main demographic; as that affects the sample size. I’ve learned that anyone can become a grifter, but the best ones are attractive and articulate.
- add-sub-mul-div 7mo agoBecause you fixate on the narrative you want to see and ignore the scamming being done by groups you're sympathetic to.
- hank808 7mo agoiLearningEngines? I guess we're all familiar with them and have thoughts and concerns about them. We don't. We're not.
- b3ing 7mo agoPardon coming soon in 2027
- immanuelis 7mo ago[dead]