Man Who Bribed Son into Penn Guilty in $1.3B Health Fraud | Hacker News Reader

Man Who Bribed Son into Penn Guilty in $1.3B Health Fraud

bloomberg.com

125 pointsjonwachob91111 comments

One of the things that struck me the most as I read about the college bribery scandal is that many if not all the parents involved acted as if bribing people, falsifying records, doctoring photographs, etc. were things that "everyone else was doing to get ahead in the admissions game" and therefore they could justify and rationalize it as necessary. At a minimum, they can at least claim they did it for their children.

I don't know how anyone could ever justify and rationalize stealing money from the elderly and taxpayers. It seems so wrong; indefensible, really. Jeez...

Projection is something the good and bad do. There really is a battle of dark and light you see in mythology and centers on people's psychological need to project their actions as the norm.

Fraud is wrong. Rationalizing it away as a fashion isn’t justifiable. Both types of fraud you point to are no different for me.

Why?

One of the US attorneys wasting our federal tax dollars prosecuting the parents even pointed it out: they bribed the college the wrong way, by not buying them a building like they were supposed to. "We're not talking about donating a building...we're talking about fraud."

So the injured parties here are the universities, and their complaint is they got cut out on the bribe dollars. Which is fine and all, but I don't understand at all why that's our problem. That's the universities' problems, and they should feel free to sue their employees for not sharing bribes appropriately.

Health care fraud actually hurts people and steals from the federal government, so there's two good reasons to spend our resources prosecuting it.

I believe the problem was the personal donation for the fraud was structured as a tax deductible non-profit donation.

Universities get substantial federal funding, including Pell and research grants. Such investments are put at risk if the universities fill themselves with unqualified applicants.

Has any university ever lost federal funding because of admitting too many unqualified applicants? I doubt this is a major risk.

Where is the claim that a university has ever been found to have admitted “too many unqualified applicants”?

And what makes the unqualified applications requiring building purchases for admission ok, and the unqualified applicants requiring cash payments to coaches not ok under your rubric?

Should be patently obvious that there’s a cap on how many people can donate the kind of money that funds a building — nevermind that such donations are public. There is no cap for a secretive system of bribery and arbitrage.

Because donating money directly to the school benefits other students who use the dorms, the building, the research facilities. Straight up bribing the coaches just enriches the coaches.

I don’t think you know what the word bribe means. Payment in exchange for a product or service (e.g. admission to a college) is not a bribe. When I go to the store and buy a soda I am not bribing the store. A bribe is when you pay an agent of an organization to misappropriate the resources of or otherwise defraud their employer. Like paying a cop to not arrest you, or paying a college coach to pretend you’re a recruited athlete.

So the injured parties here are the universities

And the legitimate applicants who were rejected.

Of course it's not justifiable. The question is, parents were rationalizing school bribery, was this man rationalizing medicare bribery?

If the chieftains do it and get away with its mkay.

They did it "to" their children. Looks more like a robbery than a gift. What message are you sending your son when you tell him "most people get here because they earn it, but don't worry, I'll pay for you to get in."

Digression but when the system is so intentionally opaque (and IMO this isn’t a bad thing) it’s difficult to even say the people that weren’t bribed into Penn “earned it”.

The difference between a Penn reject and a Berkeley accept or vice versa isn’t likely to be terribly big if at all notable.

Hmm, hadn’t seen that (“many ...parents involved acted as if ... were things everyone else was doing...”).

In the few stories I’ve seen, the parents have not committed.

Sources?

Con artists and criminals think everyone is corrupt.

If you know someone who thinks everyone is corrupt, or self serving, well... that’s one way people rationalize their own unethical behavior.

The meaner you are, the more assholes you meet.

When someone says “liberals are just virtue signaling” they probably are a horrible person because they don’t believe humans can behave ethically/altruistically.

>They probably are a horrible person

Or they observe a commonality in human nature, that signaling virtue is a real phenomenon in the competition of a certain species of social apes. And that espousing such views doesnt guarantee their feasibility nor does it mean that the signaler has actually arrived at an ethical understanding of the subject.

EX: Used to be vegan. Saw how monstrous the self-righteous were. Realized that promoting the development of "good", intelligent, ethical, and free people was far more helpful than being an individual in a society of millions of individuals. And maybe a society of such people would be far more conscientious, especially in regards to the treatment of animals, than what we have now.

Also that psychopathic/sociopathic actors could negate my puny individual protest and competing for social rank over them would probably be more helpful than being an "individual" in the liberal sense

Wait so you stopped being vegan to ... protest the fact that some vegans are self-righteous? Do you also drive a V8 to protest the fact that some people with Teslas are smug?

It was more of a realization that those people placed far too much importance on their individual "purity", and their distance from the "impure" masses than effecting any systematic change.

When you think of the entire chain of supply and logistics involved in running the modern world, you are inexorably meshed with the world of evil and the "impure". As I said, it does far more good for ethical entities to take rein of this thrashing beast than to posture purity. You might even have to be cunning, brutal, and cold to ward off those who simply don't give a damn. Especially the psychopathic and sociopathic agents.

This is all a ton of pontification without arriving at any sort if logical conclusion. You used to be vegan but stopped because you didn't feel like you could enact change with your diet? Weak .

Of course. It'd be dumb to think you have any direct effect when you're inmeshed in an "impure" network.

The world doesn't exist to provide a nice solution set where you can have the conveniences of modern living without the massive externalities of war (to secure and maintain logistical routes) and pollution. To be quite honest, I think the world is inherently a tragedy to those who seek to do only "good".

Helping potential moral agents, aka your "neighbors" (physical or spiritual), with better leverage in the social ape rat race has more impact. You strive to throw off the worse leaders of men and install the better leaders of men.

I was going to go on but forgive me for balking out of a lengthy explanation that isn't structured yet. It's been a while since someone has challenged my stance like that and my intuitons need more editing, so to speak.

So... You used to be vegan but you stopped because of how 'monstrous the self righteous were'? So billions of animals raped and slaughtered every year for taste but but na fk that, some vegans are uppity...?

So it seems to me you are projecting after all. There's nothing wrong with 'virtue signalling' whether we do it by nature or not. It's ALWAYS brought up in the context of trying to shame white men for being supportive towards women and minorities.

>When someone says “liberals are just virtue signaling” they probably are a horrible person because they don’t believe humans can behave ethically/altruistically.

Pot meet kettle.

> ..."everyone else was doing to get ahead in the admissions game" ...

Reminds me of this: https://www.reddit.com/r/india/comments/6rbpr9/why_is_lying_...

This is stunning in its scope and made me wonder in what other developed country is it even possible for a citizen to defraud its government of over 1 billion dollars?

The skilled nursing system in this country is broken, with no meaningful oversight other than an annual inspection which everyone knows is coming. Lengths of stay are unnecessarily long and the quality of care is unbelievably sub par. Despite all of this, fraud at this level is pretty astounding, and should serve as a wake up call for the government to more aggressively monitor all facilities, or outsource monitoring from the States to private agencies.

Skilled therapy is changing though. PDPM doesn’t reimburse through the amount of therapy provided. It reimburses by the need of the patient. I believe nursing is included in that budget

that was what the RUGs were supposed to do, but it was easily gamed and I don’t see why this wouldn’t be either. The only advantage it offers, IMO, is that it allows patients with a greater variety of needs (like more nursing skill and less or no therapy) to receive care. For example, the end stage cancer patient who can’t withstand much therapy but isn’t ready to accept hospice.

You can run a company that has to pay $1.7 billion in fines for defrauding medicare and still be governor of Florida and (as of last January) a sitting US Senator: https://www.politifact.com/florida/statements/2014/mar/03/fl...

Indeed,

The phrase "Robber barons" from 19th century was hardly overstated. America is once again reaching a stage where a large enough fraud and criminality offers an exit strategy into the ruling class.

Why do wealthy people need to even buy admission for their children into elite schools? Don't they have enough independent wealth to support not only themselves, but their children, as well?

With that kind of money, their children really don't need to cultivate careers... and even if they wanted to, surely they could do it the old fashioned way? And if they fail, parents can bail them out?

Or is it primarily driven by greed, and the parents want the kids to make a lot of money, so the family has even greater wealth?

I think they do it for the prestige/status. This is generally what people want wealth for anyway, above a certain life-sustaining amount.

What is the point of prestige/status if it isn't even real? It's like they're sending their kids to Stanford for the Instagram likes they'll get.

What is surprising about seeking status (or more importantly avoiding status loss) in the eyes of your peers?

It's funny how the 20-somethings of the well-off seemingly have the skills and experience to take on key leadership roles, that their peers somehow would have to take decades to ascend to.

It's "status" but anybody can look at say, Ivanka Trump for example, and see right through it.

> anybody

The people that matter can't, that's their target.

By which I mean, other socialites.

Huh, the prestige is most definitely real. The status is real. If your kids go to Harvard or Stanford, people will assume they're smart and you're a good parent.

But it's pretty fragile. You can imagine after this scandal some prestigious employer, say Goldmans or McKinsey declaring that they want to see on everyone's applications whether they are a legacy, small sport scholar, or child of a rich donor.

In fact that might benefit society an awful lot.

After the revelations, I don't know if the prestige is as strong. It's still there, but you could wonder how many of these people bought their way in, or earned the privilege.

Don't forget it starts way before college. For 18 years before college they're shelling out major money (easily $50k/yr or higher) for elite private schools.

Getting them into college is just the natural extension of this 18 year spending spree.

It seems like, to obviously generalize, a need to look successful. "My son is a successful partner at a firm after graduating Harvard," instead of having to say, "oh, he is unemployed but it's because I'm wealthy."

Besides the education part though, the other thing I've seen with wealthy families is appointing kids to high positions in a family business, or saying they are "in real estate." I'm not sure why they just wouldn't do that instead of bribing colleges, but maybe if their kid is set on doing something the family will "make sure they can."

Some families even surreptiously won't want to let their kids learn or step out on their own, they want to be involved in everything even after they are adults. The kids in that case must allow that to happen, but probably not too hard to "give up" if you get to drive a luxury car and live in a classy apartment building regardless of employment.

In my view, paying for education in the absence of a career motivation is consumption spending. I don't see why there has to be a utilitarian, or even a "status" motive. I'd pay for my kids to be educated as a gift to them. Granted, I come from a culture that values education as an end unto itself.

It's a kind of fig leaf over your inherited position.

Look, I may have gotten all this for free, but I'm smart enough to deserve it. I might even have done it myself.

It starts way before college. For 18 years before college they're shelling out major money (easily $50k/yr or higher) for elite private schools.

Getting them into college is just the natural extension of this 18 year spending spree.

Kids of billionaires are invited to apply to HYP. Multi millioniares (say, someone who has $20M) are afraid whether they can retain that wealth for another five generations; so, that's why they are focused on giving their kids connections and networks that elite schools offer.

If someone has billions, he doesn't need to worry about the side doors. Just pay $10M to get admitted to HYP.

The fundamental problem here is that what we call ”education” is largely a way to place people into a hiearchy of worth, NOT a way of transmiting knowledge or further peoples understanding of the world.

Rich people see the reality of this and of course want to help their kids ensure a comfortable place in this hierarchy, while the hoi poloi still think’s about getting an education and working hard lol

Maybe we should ask ourselves why/how these people ended up with so much economic power in the first place?

"In the revised indictment of Esformes, prosecutors said he illicitly gave the coach (Penn basketball coach) $74,000 in the form of cash, a recruiting trip to Miami and a ride on a private jet in 2013 and 2014." https://www.bloomberg.com/news/articles/2018-10-05/celtics-a...

Seems more affordable than I thought, considering in the other scandals people were dropping $500k+.

> Esformes made off with at least $37 million for himself from 1998 to 2016, according to prosecutors, using the money to finance a lavish lifestyle of fancy cars and a $360,000 watch.

18 years this went on?? This is what surprised me the most.

There’s little motivation for law enforcement to search for white collar crime, and little support for prosecuting it.

Look at the indictments produced by the Mueller investigation. Politics aside, some of those people were doing real shady shit for years, and they would have gotten away with it cleanly had they not gotten entangled with the campaign.

Counter-argument: none of the shady shit they'd done had enough of an effect to interest law enforcement, right until they got control of the Presidency.

It seems to make sense to me now. All the fear mongering over immigrants and drugs flooding across the border when an American company (Purdue Pharma) engineered the worst actual drug epidemic in generations makes me wonder about the effectiveness of spending literally billions on the "War on Drugs" while not addressing the real issues.

I don’t think that’s a counter argument, just a specific example of what I said in my first paragraph.

What you say in your first paragraph:

> There’s little motivation for law enforcement to search for white collar crime, and little support for prosecuting it.

How is what I said a specific example of this?

Law enforcement wasn’t interested in their shady shit before, because they weren’t motivated to look for it, and if they had found it, it probably wouldn’t have been prosecuted anyway.

The IRS audits low/middle income folks overwhelmingly more than rich folks.

https://www.vox.com/future-perfect/2019/4/3/18292741/irs-tax...

I doubt it’s because of either the magnitude or harm caused, more like the ease of prosecution.

law enforcement doesn't search for unreported crimes period. Some white collar crimes are reported such as when someone uses your credit card or steals your identity. Crimes such as bribery are not reported, they merely stumble across it. The reality scandal is tip of the iceberg, there's so much bribery and corruption going on in life that never get reported.

Law enforcement searches for unreported crimes all the time! They just only do it for crimes they are motivated to find and which they know will get prosecuted, like traffic or drug offenses.

It is well known that colleges often give special consideration to children of alumni, largely for the purpose of encouraging and sustaining financial contributions. They usually justify it by noting that it brings money into the school and allows them to offer better financial aid.

I think they would do well to simply state some students are admitted based on whether they bring something worthwhile to the college, including but not limited to: academic achievement, artistic accomplishment, athletic prowess, background diversity, gender balance, interest diversity, and financial contribution/desirability, but if students graduate from the school then they have probably proven that they are at least minimally qualified to attend.

It has never been a level playing field, and there are always qualified students who are rejected for reasons completely beyond their control. One bit of consolation for those rejected from all of their elite schools is that it may be easier to excel at a non-elite college, improving your chances for admission to an elite graduate program. And seriously, who really wants to pay $50K+ a year to a college/country club only to be saddled with crippling student loan debt after graduation, debt that even bankruptcy cannot expunge?

What I never understood about the college admissions scandal is why those rich parents were SO worried about their kids getting into some good college. They were rich! These kids would be 100% fine (actually more than fine) even if they didn't go to ANY college at all, and just stayed home and played video games all day!

The second thing I didn't get is why they would spend so much money on USC, which is not even a top school.

why they would spend so much money on USC, which is not even a top school

It might not be "a top school" by whatever criteria you're using, but it's a very good school. Depending on what major you're interested in, it's very much elite.

E.g. here's the title of a recent article it took me 10 seconds of googling to find: USC Film School Turns 90: Famous Alums Gather to Share Memories of a Hollywood Incubator[1]

Some other factoids:[2]

   Admission Standards  Elite
   Acceptance Rate      16%
   generally admitting students who score in the top 7 percent.

[1] https://www.hollywoodreporter.com/features/30-usc-film-schoo... [2] https://www.collegesimply.com/colleges/california/university...

> Acceptance Rate 16%

As the scandal proves, that was way too much. Either that, or they were kicking out deserving poor people to make room for the bribed kids.

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