Quotulatiousness

November 26, 2014

It’s funny, but it’s no joke – the Pentagon’s Encyclopedia of Ethical Failure

Filed under: Government, Humour, Military, USA — Tags: , , , — Nicholas @ 00:02

No shit, this really exists:

Ethically, it’s been a rough couple of years for the military.

In July 2013, an Air Force major general went on an epic five-day bender while on a diplomatic mission in Russia. That November, Navy officials launched an investigation into misconduct involving top officers and a Malaysian contractor named Fat Leonard.

The Special Inspector General for Afghanistan Reconstruction has released report after report detailing corruption and waste by contractors and military officials.

Individually, the cases are all bad news. The good news is that authorities often catch and punish government cheats, thieves and frauds. Penalties for ripping off the American taxpayer range from huge fines to hard time in prison.

And when the trial ends and punishment begins, many military ethics cases wind up in the Pentagon’s Encyclopedia of Ethical Failure.

That’s right, the military maintains a database of the federal government’s worst ethics violators. Unlike many government documents, the encyclopedia is clear, easy to read … and actually quite funny. Many of the stories are as amusing as they are aggravating.

It might be the most light-hearted official report anyone’s ever written about criminals.

H/T to John Turner for the link.

August 9, 2014

Faking fine old wines for fun and profit

Filed under: Wine — Tags: , — Nicholas @ 00:02

A couple of years ago, I posted an item about a wine collector who got into the business of “creating” expensive old wines. BBC News talks about how this worked and how he was caught:

Rudy Kurniawan was sentenced to 10 years in jail for committing wine fraud. But just how easy is it to fake a fancy bottle of Burgundy?

Wine fraud was a problem in classical Rome and it continues to be one now. Some estimate that over 5% of wine consigned and sold at auction is fake.

But even though it is a very big problem, it is a very difficult thing to do.

“There is a distinctive taste in aged wine,” says wine chemist Andrew Waterhouse, of the University of California, Davis.

That taste?

“Canned asparagus,” he says.

Old wines — mostly those from the Burgundy and Bordeaux regions of France — have lost the majority of their tannins, giving them a softer taste reminiscent of the spring vegetable.

Bu taste is only one part of the equation. “It is the experience of drinking something that’s quite rare that’s appealing,” explains Prof Waterhouse.

A few key ingredients to the fraud: corks, capsules, and soaked-off labels from the authentic wines, plus good but not expensive wine to use either to rejuvenate the older wine or to pass off as the real thing to a less-discriminating buyer.

And that’s exactly what Mr Kurniawan was doing in his kitchen in Arcadia, California — essentially creating a “better” vintage by mixing old, good-but-not-great wines with some newer, vibrant pinot noirs.

Give it a shake, put it in an old bottle, smack on a vintage label — say, one from 1985 instead of 1982 — and voila.

“He could take a $200 bottle and turn it into over a $1,000 bottle,” says Mr Troy.

Unless you are used regularly drinking fine vintages — which at thousands of dollars a bottle, is not that many people — the taste would not raise alarm bells.

“By blending the fruitiness of a new wine with the aged character of the old wine he would approximate in some manner a very, very good aged Burgundy,” explains Prof Waterhouse.

July 17, 2014

Peer review fraud – the tip of the iceberg?

Filed under: Media, Science — Tags: , , , , — Nicholas @ 08:18

Robert Tracinski points out that the recent discovery of a “peer review and citation ring” for mere monetary gain illustrates that when much is at stake, the temptation to pervert the system can become overwhelming:

The Journal of Vibration and Control — not as titillating as it sounds; it’s an engineering journal devoted to how to control dangerous vibrations in machines and structures — just retracted 60 published papers because “a ‘peer review and citation ring’ was apparently rigging the review process to get articles published.”

The motive here is ordinary corruption. Employment and prestige in academia is usually based on the number of papers a professor has published in peer-reviewed journals. It’s a very rough gauge of whether a scientist is doing important research, and it’s the kind of criterion that appeals to administrators who don’t want to stick their noses out by using their own judgment. But it is obviously open to manipulation. In this case, a scientist in Taiwan led a ring that created fake online reviewers to lend their approval to each others’ articles and pump up their career prospects.

But if this is what happens when the motive is individual corruption, imagine how much greater the incentive is when there is also a wider ideological motive. Imagine what happens when a group of academics are promoting a scientific theory that not only advances their individual careers in the universities, but which is also a source of billions of dollars in government funding, a key claim for an entire ideological world view, an entrenched dogma for one side of the national political debate, and a quasi-religious item of faith whose advocates believe they are literally saving the world?

May 5, 2014

“[M]ost Canadian law societies report members to police. The [LSUC] does not.”

Filed under: Cancon, Law — Tags: , , , , — Nicholas @ 08:17

The Toronto Star‘s Kenyon Wallace, Rachel Mendleson and Dale Brazao investigate the Law Society of Upper Canada (LSUC) and find it does not report members for criminal activity to the police:

They treat client trust accounts as their personal piggy banks, facilitate multi-million-dollar frauds and drain retirement savings of the elderly.

While most lawyers caught stealing from their clients are reprimanded, suspended or disbarred by the profession’s regulator, the vast majority avoid criminal charges, a Star investigation reveals.

The Star found that more than 230 lawyers sanctioned for criminal-like activity by the Law Society of Upper Canada in the last decade, stole, defrauded or diverted some $61 million held in trust funds for clients.

Fewer than one in five were charged criminally. Most avoided jail.

“I truly believe there are two laws — a set of rules and regulations for lawyers and a different set for everyone else,” said Richard Bikowski, who was fleeced out of $87,500 by now-disbarred Toronto lawyer Lawrence Burns.

Unlike the law societies in most other provinces, the Law Society of Upper Canada does not, as a rule, report suspected criminal acts by its members to police, no matter how much money lawyers steal.

[…]

Of the more than 1,000 discipline decisions made by the law society in the last 10 years, the Star identified 236 cases in which lawyers were sanctioned for offences that were characterized by our analysis as criminal, including theft, fraud, breach of trust, forgery and perjury.

The Star could find criminal charges for only 41 of these lawyers. In more than half of cases where criminal charges were laid, the law society sanction came after. Of those bad lawyers sentenced criminally, the punishments were generally lenient, ranging from house arrest to community service. The Star found that only 12 went to jail.

Why do so many lawyers who steal from their clients avoid criminal justice?

A big reason is that the law society in practice does not report alleged criminal offences by its members to police.

February 26, 2014

MtGox Bitcoin “owners” didn’t actually own their Bitcoins

Filed under: Business, Economics — Tags: , , — Nicholas @ 09:09

I haven’t been following the Bitcoin situation too closely — although if I’d had extra money lying around over the last year or two, I might have dabbled — but it’s hard to figure out what really happened from the media reports. At Samizdata, Bruce Hoult explains the details:

What has happened is that people who bought Bitcoins on MtGox thought they owned them. They did not, according to the Bitcoin system. MtGox did. MtGox kept their own records of who ‘owned’ what. And MtGox were incompetent.

Which should have been apparent from the start: MtGox learns Bitcoin

The proper way to use Bitcoin is to keep your wallet of Bitcoins on your own computer. And back it up. Several times. Print it on paper if you want — it will likely fit on one side of A4 in not very small print. Keep it secret. Keep it safe. It is a bearer certificates. If you lose your wallet or forget the password then those Bitcoins are gone out of circulation forever.

That is not what happened with MtGox. They gave Bitcoins that people thought they owned (but did not) to other unauthorised people. It is theft. Just like a bank robbery. Those Bitcoins still exist, just in other hands.

This has absolutely no effect on people who keep their Bitcoins on their own computer (or phone). There are the same number in circulation as before. Bitcoins still can’t be counterfeited or inflated.

If you want/need to use a place similar to MtGox to turn normal money into Bitcoins then DO NOT LEAVE THEM IN YOUR ONLINE WALLET THERE. Make yourself an identity and wallet on your own computer and make a payment from your account on the Bitcoin exchange to your own identity. Then you are perfectly safe.

Well, you are if you do your backups diligently.

Or, if you want to turn normal cash into Bitcoins, find someone who has Bitcoins and wants cash, agree a price, have them do a transfer of Bitcoins from their wallet to yours (using the actual Bitcoin system, not an exchange), and hand them the cash.

July 18, 2013

Chinese museum woes – “80 of the museum’s 40,000 objects had been confirmed as authentic”

Filed under: China, History — Tags: , , , , — Nicholas @ 09:22

Tom Phillips on the sudden closure of the Jibaozhai Museum:

The museum’s public humiliation began earlier this month when Ma Boyong, a Chinese writer, noticed a series of inexplicable discrepancies during a visit and posted his findings online.

Among the most striking errors were artifacts engraved with writing purportedly showing that they dated back more than 4,000 years to the times of China’s Yellow Emperor. However, according to a report in the Shanghai Daily the writing appeared in simplified Chinese characters, which only came into widespread use in the 20th century.

The collection also contained a “Tang Dynasty” five-colour porcelain vase despite the fact that this technique was only invented hundreds of years later, during the Ming Dynasty.

Museum staff tried to play down the scandal.

Wei Yingjun, the museum’s chief consultant, conceded the museum did not have the proper provincial authorizations to operate but said he was “quite positive” that at least 80 of the museum’s 40,000 objects had been confirmed as authentic.

“I’m positive that we do have authentic items in the museum. There might be fake items too but we would need [to carry out] identification and verification [to confirm that],” he told The Daily Telegraph.

Mr Wei said that objects of “dubious” origin had been “marked very clearly” so as not to mislead visitors and vowed to sue Mr Ma, the whistle-blowing writer, for blackening the museum’s name.

June 30, 2013

“It’s very difficult to regulate greed”

Filed under: Business, Cancon, China, Law, Wine — Tags: , , , — Nicholas @ 11:30

Icewine is what originally put Canadian wine on the international map. Icewine is an expensive thing to produce, and therefore has drawn a lot of cheaters into the market:

Canada is tightening the rules for producing its popular icewine, a sweet dessert wine that is only made in cold climates, to crack down on fraudsters who sell mislabeled bottles that don’t make the grade.

In regulations published this week, the Canadian government said any bottle labeled and sold as icewine must be made only from grapes that have frozen on the vine.

[. . .]

Because the frozen grapes only yield a tiny amounts of sweet liquid, the dessert wine has a high cost and a high price. Grapes are left on the vine until the temperature falls to -8C (18F) over a prolonged period, and usually harvested overnight.

“It’s liquid gold,” said Paszkowski.

In China, where icewine has become hugely popular, a thriving counterfeit industry is flooding the market with wines that don’t live up to the label, he said.

“It’s very difficult to regulate greed,” said Paszkowski. “We’ve identified counterfeit icewines even in five-star restaurants and hotels.”

H/T to Elizabeth for the link.

June 24, 2013

Irish bank bailouts based on lies and deception

Filed under: Europe, Government — Tags: , , , — Nicholas @ 09:39

In the (Irish) Independent, Paul Williams explains what the bankers did to force the Irish government to bail them out:

TAPE RECORDINGS from inside doomed Anglo Irish Bank reveal for the first time how the bank’s top executives lied to the Government about the true extent of losses at the institution.

The astonishing tapes show senior manager John Bowe, who had been involved in negotiations with the Central Bank, laughing and joking as he tells another senior manager, Peter Fitzgerald, how Anglo was luring the State into giving it billions of euro.

Mr Fitzgerald had not been involved in the negotiations with the Central Bank and has confirmed he was unaware of any strategy or intention to mislead the authorities. Mr Bowe, in a statement last night, categorically denied that he had misled the Central Bank.

The audio recordings are from the bank’s own internal telephone system and date from the heart of the financial crisis that brought the State to its knees in September 2008.

Anglo itself was within days of complete meltdown — and in the years ahead would eat up €30bn of taxpayer money. Mr Bowe speaks about how the State had been asked for €7bn to bail out Anglo — but Anglo’s negotiators knew all along this was not enough to save the bank.

The plan was that once the State began the flow of money, it would be unable to stop.

May 2, 2013

Fraudster who sold fake bomb detectors to Iraq jailed for ten years

Filed under: Britain, Law, Middle East, Technology — Tags: , , , — Nicholas @ 08:54

Under the circumstances, a ten year sentence is pretty lenient:

Fraudster James McCormick has been jailed for 10 years for selling fake bomb detectors.

McCormick, 57, of Langport, Somerset perpetrated a “callous confidence trick”, said the Old Bailey judge.

He is thought to have made £50m from sales of more than 7,000 of the fake devices to countries, including Iraq.

The fraud “promoted a false sense of security” and contributed to death and injury, the judge said. He also described the profit as “outrageous”.

Police earlier said the ADE-651 devices, modelled on a novelty golf ball finder, are still in use at some checkpoints.

Sentencing McCormick, Judge Richard Hone said: “You are the driving force and sole director behind [the fraud].”

He added: “The device was useless, the profit outrageous, and your culpability as a fraudster has to be considered to be of the highest order.”

One invoice showed sales of £38m over three years to Iraq, the judge said.

The bogus devices were also sold in other countries, including Georgia, Romania, Niger, Thailand and Saudi Arabia.

April 23, 2013

Seller of fake bomb detectors found guilty of fraud

Filed under: Britain, Law, Middle East, Technology — Tags: , , , , — Nicholas @ 11:01

Back in 2010, I said “There should be a special hell for this scam artist” who mocked up bomb detector kits and sold them for thousands of dollars in Iraq and other areas with a real need for protection against IEDs. It’s taken more than three years, but he’s finally been found guilty:

A Somerset-based businessman has been convicted of three counts of fraud over the sale of bogus bomb detectors after his operation was exposed in a BBC Newsnight investigation in 2010.

This was a scam of global dimensions. James McCormick marketed his fake bomb detectors around the world, selling them in Georgia, Romania, Niger, Thailand, Saudi Arabia and beyond.

But his main market was Iraq, where lives depended on bomb detection and where the bogus devices were, and still are, used at virtually every checkpoint in the capital.

Between 2008 and 2009 alone, more than 1,000 Iraqis were killed in explosions in Baghdad.

ADE-651 fake bomb detector

How the device was meant to work:

  1. A small amount of the substance the user wished to detect — such as explosives — was put in a Kilner jar along with a sticker that was intended to absorb the “vapours” of the substance
  2. The sticker was then placed on a credit-card sized card, which was read by a card reader and inserted into the device
  3. The user would then hold the device, which had no working electronics, and the swivelling antenna was meant to indicate the location of the sought substance

In other words, a magical dowsing stick that depended on the user to “detect” whatever the device was supposedly seeking. This wasn’t a case of a device that didn’t do what it was designed to do: it was a deliberate fraud with just enough “technological” mumbo-jumbo to appear to be a solution to a real problem:

The court heard that McCormick began his business by buying a batch of novelty “golf ball detectors” from the USA for less than $20 each. In fact they were simply radio aerials, attached by a hinge to a handle. He put the labels of his company, ATSC, on them and sold them as bomb detectors for $5,000 each.

He then made a more advanced-looking version which he was to sell for up to $55,000. The ADE-651 came with cards which he claimed were “programmed” to detect everything from explosives to ivory and even $100 bills. Police say the only genuine part of the kit — and the most expensive — was the carrying case.

To their credit, the police moved to investigate the same day the BBC’s original story broke. Strategy Page explained why the scam had been so easy to sell. Later it was reported that British civil servants and military personnel had been implicated in the fraud.

March 4, 2013

Hollywood accounting tricks … bring your own popcorn for this one

Filed under: Business, Law, Media, USA — Tags: , — Nicholas @ 13:01

At Techdirt, Mike Masnick is looking forward to some amusing courtroom antics as this case comes up:

We’ve discussed a few times the concept of Hollywood Accounting, which covers the various tricks of the trade pulled by the big studios to basically keep all the money for themselves, and guarantees that the movie is never, ever seen as “profitable,” as that would mean they would need to share some of the profits. It appears that we may be about to see significantly more dirty laundry revealing some of that Hollywood Accounting in detail. And this time, it’s extra special because it involves two companies who were corporate siblings for much of the time in dispute, as both were owned by Vivendi. However, StudioCanal is now suing Universal, claiming that Universal pulled accounting tricks to deny giving StudioCanal many, many millions of dollars that were owed.

December 17, 2012

QotD: Argentina’s little white interest rate lie

Filed under: Americas, Economics, Quotations — Tags: , , , , , — Nicholas @ 09:49

No one gives a toss that Argentina is lying about its inflation rate. Well, except maybe the economists they’ve fined and ruined for calculating the real one. We’ve all put up with Cuba lying about everything for 60 years after all.

Except, except … Argentina has issued index linked bonds as part of the 2001/2 debt restructuring. The interest paid depends on what the inflation rate is. If the government deliberately undercounts inflation then they get away with rooking the holders of those bonds.

That’s what this is about. That’s why anyone cares. It’s not simply that they’re liars it’s that they’re thieves.

Tim Worstall, “I wish people would get it right about Argentina”, Tim Worstall, 2012-12-17

November 21, 2012

Piltdown Man

Filed under: Britain, History, Science — Tags: , , — Nicholas @ 09:33

History Today tweeted that today is the anniversary of the exposure of the Piltdown Man hoax in 1953:

Once cited as the ‘missing link’ between man and beast and definitive proof of the theory of evolution, the Piltdown Man was exposed as a hoax in 1953. Eoanthropus Dawsoni was ‘excavated’ in 1912 by amateur archaeologist Charles Dawson from a shallow gravel pit in Piltdown, Sussex. Great excitement greeted his find, as at the time fewer than five human fossils had been discovered and most of those were incomplete, their dates uncertain and — almost worst of all at a time of intense imperial rivalry — they were foreign. France and Belgium had long boasted Neanderthal skeletons. Germany had Heidelburg Man. Now here, at last, was the first great British palaeoanthropological find. The Piltdown Man, as he was immediately dubbed, was the ‘first Englishman’ and he caused a world sensation.

[. . .]

As time passed and more evidence was disinterred, Piltdown Man became more and more of an anomaly, marginalised in evolutionary theory but remaining on the syllabus. Students were writing dissertations on Piltdown in the 1950s. Then in 1953, following a lecture on Piltdown at the British Museum, South African born Doctor Joseph S. Weiner had an epiphany on the train home to Oxford: Piltdown had to be a fraud.

With his friend and colleague Geoffrey Ainsworth Harrison, who is now the Professor of Biological Anthropology at Oxford, Weiner set about collecting as much evidence as he could before approaching the Head of the Anatomy Department at Oxford, Professor Wilfrid Edward Le Gros Clark. Using the latest scientific techniques, including fluorine measurement and radiocarbon dating, the team proved that the mandible of Eoanthropus Dawsoni had been deliberately stained with potassium bichromate and the teeth filed down. The jaw was later shown to have come from an orangutan.

November 2, 2012

California tax collectors discover exciting new technique: double billing

Filed under: Bureaucracy, Government, USA — Tags: , , — Nicholas @ 08:04

Let’s say you’re an honest, upstanding citizen who pays your taxes on time and in full. Let us also say you happen to live in California. What would you do when you got a bill from a different agency of the state government, saying you still owed an amount of money that you paid in your state taxes (and have the documentation to prove it)? David Friedman ponders whether this new approach to state fund-raising is fraud or mere incompetence:

I recently received a bill from the California Board of Equalization (BOE) demanding that I pay them about three hundred dollars in use tax. That puzzled me, since I had already paid the use tax with my California state income tax return—my reporting it on that return is the only reason the BOE knew that I owed it. Just to be sure, I went online and checked my account with the Franchise Tax Board, the body that collects California income tax—it showed me owing nothing.

So I called the number for the BOE. The woman I spoke with told me that they had not received the money from the FTB and that if I did not want them to bill me for it I should call the FTB and have them take care of the matter. I called the number she gave me, got an FTB phone tree with no option of talking to a human being and no reference to use tax.

[. . .]

It is possible, of course, that I am misinterpreting incompetence as dishonesty—that at some stage in the process someone made a mistake, which will now be corrected. One reason I doubt that is that what the letter I received said was:

    “According to information provided to us by the Franchise Tax Board (FTB), you reported a use tax liability on your state income tax return. However, FTB advised the funds were not available to be transferred to the State Board of Equalization (BOE), which is ultimately responsible for the collection of use tax.”

    “If the use tax was remitted with your FTB return, the use tax was either redirected to a FTB liability or refunded by FTB. Accordingly, the BOE is sending this letter to inform you that the use tax remains due (see enclosed billing notice)”

They do not say that I did not pay the money to the FTB, merely that the FTB did not pay it to them. And the final bit, which I missed in the initial draft of this post and have just added, makes it clear that if I paid the money but the FTB didn’t pass it on, they want me to pay it again.

October 26, 2012

QotD: Supporting the “undeserving” poor

Filed under: Government, Liberty, Quotations — Tags: , , — Nicholas @ 08:26

Two of the great and correct insights of libertarianism are that the state has very limited knowledge, and that its interventions often lead to people gaming the system. This is true of welfare spending as of anything else. The government doesn’t have the knowhow to distinguish well between the deserving and undeserving poor. And its efforts to do so are not only expensive — in terms of paying bureaucrats and corporate scroungers and fraudsters — but also bear heavily upon the honest and naive deserving poor whilst the undeserving, who know how to game the system, get off.

Chris Dillow, “Support the undeserving poor”, Stumbling and Mumbling, 2012-10-25

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