Former Facebook and Nike diversity manager gets 5 years in prison for $5M fraud | Hacker News Reader

Former Facebook and Nike diversity manager gets 5 years in prison for $5M fraud

cnbc.com

65 pointsdonsupreme16 comments

I remember a similar case when a Lithuanian dude sent a barrage of fake invoices (for purported hardware purchases) to Google and Facebook. He made off with $123 million before he got caught [1].

A Yale University employee also stole $40 million by ordering computers for supposed research and reselling them through a third party [2].

An Amazon manager similarly stole $10 million with fake invoices [3].

It seems this kind of fraud is inevitable once an organization scales beyond a certain level.

Harvard

1-https://www.zdnet.com/article/lithuanian-man-pleads-guilty-t...

2 - https://www.npr.org/2022/03/29/1089525660/a-former-yale-empl...

3 - https://www.theregister.com/AMP/2023/07/06/amazon_manager_fr...

I'm wondering how anyone at an ivy IT dept, even the central IT shop, gets $40M of budget for a single project and with little oversight.* That's a whole lot of budget.

In other news, I saw ~$120M of Stanford's money frittered away based on sloppy program/project management and lack of oversight (not through malice). The real question is: Is there any material organizational difference when money is wasted through deceit or through incompetency? The optics of the former are worse because a villain to the story got ahead improperly.

* I did work at an ivy IT department where my boss had roughly $2M/y budget without supervision. $40M without internal controls, approvals, or auditing seems bonkers reckless.

Story said the fraud was committed over ten years, so you could imagine a more reasonable $4MM/year. Although, usually these schemes get caught because the perpetrator starts small and keeps amping up the score. Below highlight said that individual purchases were kept below some of the reporting requirements.

   She would break up the fraudulent purchases into orders that were below $10,000 each so that she wouldn't need to get additional approval from school officials.

Bloody hell. Still, that's a lot to miss. The accounting department and internal audit controls absolutely failed. They should also have external auditors audit through transactions every couple of years to flag unusual activity for expanded auditing. Furthermore, it seems like if banks can do reasonable fraud detection then accounting software should include an ability to detect patterns of suspicious transactions for additional scrutiny.

The accounting department and her supervisor also share culpability.

From the USAO press release[0]:

> As she had done at Facebook, Furlow-Smiles circumvented the vendor process at Nike to commit fraud. She linked her Nike corporate card to her PayPal and Venmo accounts. She then paid her associates with PayPal and Venmo, causing fraudulent charges to her Nike card. The associates kicked back portions of the payments to Furlow-Smiles, who submitted fraudulent expense reports to Nike to cover her tracks. The expense reports falsely claimed that the payments were related to the Juneteenth event.

Imagine presenting yourself as a champion of DEI, cloaked in righteousness, while secretly defrauding your company with boundless greed.

[0]: https://www.justice.gov/usao-ndga/pr/former-diversity-progra...

> Imagine presenting yourself as a champion of DEI, cloaked in righteousness, while secretly defrauding your company with boundless greed.

It’s pretty easy to rationalize. These companies are owned and run by rich white billionaires, so you could easily argue that it’s perfectly fair and equitable for a person of color to take whatever they can get from these companies. Call it reparations.

She stole money that was meant to go to "DEI" initiatives.

Are the companies better off or worse off for that fraud?

I think the main problem I’ve noticed with these initiatives is that lack actually discussion in some organizations and just used “virtual” training videos. If it’s actually going to work then you need top level managers having discussions.

Convicts fail to appreciate the most important principle: One should only attempt to profit from the violation ethics or morals on a much larger scale legally without noticeably affecting other powerful people.

+ Wall St., MBB consultants, Boeing, Facebook, Google

- Madoff, SBF, and this dummy

Damn, it is always the ones you'd least expect ('diversity manager')

Who would you expect?

Fraud detection

I once knew a freelancer who made the majority of his money by operating a dozen or so micro saas platforms and then signing up all of his clients for them to complete his contracts, turning his short-term engagements into substantial recurring revenue. Of course all of the companies were in the names of his family members.

He was happy and his clients were happy. Win win.

That also works great in an ethical way, BTW. My consulting clients get rebates on my SaaS offerings. They know that I own both companies and I think many of them see that as an advantage. Because it means I can offer a level of control over the full stack that's impossible with any public cloud. Plus everyone hates the nameless support automated with ZenDesk...

Official Justice post from a few days ago: https://www.justice.gov/usao-ndga/pr/former-diversity-progra...

(https://news.ycombinator.com/item?id=40367856)

According to her lawyer:

> She’s a great mother and a good person.

As total bullshit statements go, that's pretty high ranking.

As "a great mother", what kind of example is she setting, and as "a good person" like WTF? She's just literally been convicted for serious crime and she didn't bother to even try hiding it.

The statement should probably have been something like "For a smart person, my client is a complete moron that should never have done any of this.".

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