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Comment by A_D_E_P_T | Hacker News Reader

The article doesn't make it clear what the crime actually was.

I got curious, so I dug up some more details: https://archive.ph/gvYFE

And the indictment is here: https://www.justice.gov/usao-sdny/press-release/file/1579271...

Long story short, the indicted executives had fly-by-night LLCs that they used to accept payments from Polar Freight clients for preferential service. (Or for access to Polar Freight's shipping services in the first place.) They called this "consulting." Like:

> "Here's your invoice from Polar Freight at $2/kg for that recent air freight shipment. Oh, and you also owe Nightrunner LLC $0.5/kg for Consulting services. Here's a separate invoice for that."

Pretty simple scam, described in those terms.

The kicker is that some poor bastard was indicted for paying the "consulting" fee!

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"Paying the consulting fee" is just another way of saying "bribing people". The vendor got value out of that bribe, which is why they were willing to pay it.

Maybe? There are many companies and consultants that take payment from you and then negotiate across different shippers, mortgage companies, insurance companies, car dealerships, and so on. It's plausible someone could have paid a middleman and not known there were bribes involved.

Presumably the investigators determined that the people paying the "consultants" knew full well what was going on and were complicit in the scam.

But I'm sure their lawyers will try to claim that they were just duped.

> The kicker is that some poor bastard was indicted for paying the "consulting" fee!

I mean the system works best if people on both sides of the equation are punished, right?

Theoretically, what we want is for it to be illegal to solicit or offer a bribe. If we can construct a legal environment in which people can accept or pay bribes but report that in a constructive way, then the negative side gets riskier without making everyone involved co-conspirators.

Practical example: Tuna boats in the Pacific have onboard observers from one of the island nations that own the EEZs that are fished. Observers are paid okay for their countries, but not really a lot of money in the grand scheme of things. It would be a net positive if they could accept a bribe from a crooked boat owner and then report it once on shore. Turn over the money (with maybe keeping a small finders fee) and then that boat’s owner gets penalized across the entire Pacific. Now there’s a very strong incentive not to offer bribes.

Or the bribe is structured in a (recurring) way, such as a regular consulting job so that the observer has something to look forward to.

The IRS in the United States recommends including bribes in income.

And now that observer no longer gets invited on any boats

I don't think the observers get an invitation to be on a boat. It's more like, you have been assigned observer X for this trip. They'll be on the boat if you plan on fishing in our waters.

I think they'd be more worried about the relatively large number of suspicious deaths in that industry increasing: https://www.apo-observers.org/observer-safety/misses/

Or invited once more, to swim with the fishes.

It aligns incentives on both sides to keep the scheme secret.

If you want to keep something secret don't send invoices.

Money changing hands without invoices is significantly sketchier and more difficult to accomplish.

Or to report the scheme instead of participating in it?

This is the real kicker... how do you positively incentivize reporting the scheme instead of participating in it? Generally speaking the upside of participating is quite a bit larger than the upside of reporting. The downside of participating can be made pretty harsh by the government, but there can be negative downsides to reporting as well (e.g. physical harm)

> The kicker is that some poor bastard was indicted for paying the "consulting" fee!

Can you point me to where I can read more about that?

I'm assuming the indicted person knew exactly what he was doing, but it's still terrible to be stuck in a business situation where the only way to get your job done is to go along with something like that.

It's in the article I linked to:

> "Also the owner of Cargo On Demand was himself indicted, for paying the bribes, which seems a bit harsh. He was dealing with a company, and all the senior executives he dealt with told him that he had to pay these fees! He thought they were a resort fee!"

It's also in the indictment. The defendant from Cargo On Demand is Patrick Lau, referred to as "Lau" throughout. As far as I can tell, there's nothing in the indictment to suggest that he was in on the scheme. Also, he had sued Polar in a Civil case a while back, which is probably how all of this had come to light in the first place! It seems bizarre that the Feds charged him.

He's indicted, not convicted. "I'm a sucker and didn't realize what was going on" is absolutely a possible defense; I would assume that the DOJ will lead evidence to show that he knew what was going on and willingly participated, but that's why there's a trial.

Another possibility is the DOJ not intending up take that person to trial, but instead offering to reduce or drop the charges in exchange for testimony.

Yeah, this surprises me a bit. If a company tells me "Pay $X to X company and $Y to Y company to get your cargo delivered", I'm going to do X and Y unless they actually look illegal.

Submitting invoices to two different companies wouldn't ring any obvious bells. If you have a company that calls making bids/examining cargo/whatever a "consulting fee", I'll roll my eyes, file the paperwork and pay the invoice.

I'm assuming the DOJ has emails or somesuch that actually acknowledge the scheme. However, that's probably going to be held for court.

IANAL and not sure of the exact name for this concept, but I believe when there's a practice that is very standardized it can be used as a legal defense that you're just doing what everyone else does.

It's just called "customary practice".

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