Financial Crime and Business Scandals | Bloomberg Originals Marathon
07 Apr 2024 (5 months ago)
The $120 Million Coke Can Heist
- Dr. Shannon Yo, a chemical engineer for Coca-Cola, was arrested by the FBI for stealing $120 million worth of trade secrets related to can coatings.
- Yo was part of China's Thousand Talents Program, which encourages ethnic Chinese to return to China and bring foreign technology with them.
- Despite initially denying sharing technology with anyone in China, Yo was caught in lies during interrogation and presented with evidence, including a contract and voicemails, showing her involvement in setting up a lab in China and discussing technology transfer.
- The prosecution focused on Yo's intent to share the stolen information, launch a company in China, and gain personal wealth, rather than whether she had actually shared it with the Chinese government.
- The case highlights China's efforts to incentivize espionage beyond defense technology and national security, extending into various industries and sectors.
Singapore, China and a $2 Billion Money Laundering Scandal
- Singaporean authorities arrested 10 individuals for laundering $2 billion from organized crime, marking the largest money laundering case in the country's history.
- The suspects, linked to China, exploited Singapore's reputation for ease of living and low crime rates to establish businesses and family offices, which are loosely regulated investment management companies.
- The influx of Chinese wealth into Singapore has increased since 2019 due to factors such as President Xi Jinping's policies and pandemic-related restrictions in China.
- Investigations revealed that some suspects were on China's wanted list for illegal online gambling operations and used family offices to remain in Singapore.
- Loopholes in the system allowed the suspects to move their money to Singapore and live lavish lifestyles in highly coveted real estate areas.
- Singapore's government is forming an interministerial committee to investigate vulnerabilities that enabled illicit money to enter the country.
- Questions are being raised about the involvement of financial institutions, including major Western banks, in facilitating the movement of potentially tainted funds.
- Balancing the attraction of wealthy individuals and businesses with implementing safeguards against potential illegality is a significant challenge for Singapore and other financial hubs.
The Mysterious Murder of a Billionaire Canadian Couple
- Barry and Honey Sherman, a wealthy pharmaceutical billionaire couple, were found murdered in their Toronto home on December 15, 2017.
- Their bodies were found in their basement, held up by belts around their necks, suggesting suspicious circumstances.
- Despite their immense wealth, the Shermans lived modest lives and were known for their philanthropy.
- A private investigation commissioned by the Sherman's children revealed forensic evidence indicating a double homicide, contradicting the police's initial theory of a possible murder-suicide.
- New details emerged, including markings on Barry Sherman's wrists indicating his hands had been bound, and additional marks on their necks suggesting strangulation before their bodies were moved.
- The police released a video of a "Walking Man" suspect in 2022, four years after the murders.
- The Sherman children inherited their father's fortune and decided to slow down investments and prepare the business for sale.
- Barry Sherman had made enemies in the pharmaceutical industry and speculated that a rival company might have had him killed.
- Despite extensive investigations, no arrests or prosecutions have been made in the case, and the method of murder, strangulation, was unusual and not what would be expected from a professional hitman.
Intrigue in Copenhagen: A Tale of High-Stakes Corporate Espionage
- Huawei, a Chinese tech giant, engaged in espionage to secure a $200 million contract from TDC, Denmark's largest telecoms firm, by obtaining confidential information about Ericsson's bid.
- TDC launched an investigation and discovered that Dove Goldstein, the head of special projects, had leaked sensitive information to Huawei's executive in Denmark, Jason Lan.
- During the investigation, TDC found evidence of surveillance, including hidden microphones in the boardroom, hacking attacks, and a drone following and photographing TDC executives.
- Despite the investigation and allegations, no criminal charges were filed, and both Goldstein and Ericsson declined to comment.
- Huawei denied any wrongdoing and emphasized its commitment to legal compliance and ethical business conduct, while TDC confirmed that the employees involved no longer work for the company.
How India's Drug Exports May Have a Safety Problem
- Naprod Life Sciences, an Indian drug manufacturer, has been linked to several cases of severe quality issues with its medicines, including a contaminated cancer drug that resulted in the death of a 5-year-old girl named Valerie in Colombia.
- Despite these incidents, Naprod has faced minimal consequences from regulators and continues to sell its medicines globally, particularly in low-income countries.
- Former Naprod employees have raised concerns about the company's quality control practices, alleging negligence and rushed processes.
- Indian regulators have been criticized for failing to adequately oversee the pharmaceutical industry, leading to a lack of oversight and enforcement of quality standards.
- Naprod declined to comment on specific cases but stated it responds appropriately to quality concerns and produces high-quality products.
- Valerie's case remains unresolved within Colombia's bureaucratic system, hindering the investigation into her death.
- A paper test developed by Valerie's team can be used as a field lab kit to test the amount of active ingredient in chemotherapy products, costing only $2 and easily operated by a nurse using a cell phone.
- Despite Valerie's death, Naprod continues to sell its drugs worldwide.
How Deadly Cough Syrup Spread Around the World
- Maiden Pharmaceuticals, an Indian pharmaceutical company, produced cough syrups contaminated with toxic industrial solvents, resulting in the deaths of numerous children in The Gambia and other countries.
- The solvents used, diethylene glycol and ethylene glycol, are cheaper alternatives to the safe propylene glycol and are highly poisonous.
- Despite evidence linking the contaminated syrups to the deaths, Maiden Pharmaceuticals and India's Health Ministry initially denied responsibility and claimed the drugs were not the cause.
- India's pharmaceutical industry is a significant economic success, but criticism of Indian drug companies is often viewed through a nationalist lens, leading to the government defending the industry against allegations.
- Healthcare watchdog groups in India have expressed concerns about the limited resources and staff in drug regulatory bodies, hindering the effective monitoring of the country's numerous drug factories.
- Despite international alerts linking the deaths to Indian-made syrups, the Indian government initially denied any direct causal relationship and dismissed the reports as false.
- Several countries have reported deaths of children after consuming cough syrups made by Indian manufacturers, with the syrups found to be contaminated with poisonous chemicals.
- The Indian drug regulator has implemented stricter rules for syrup exports and taken action against companies producing substandard drugs, but continues to deny that Indian drugs caused the deaths.
- The source of the contaminated chemicals and the individuals responsible for the deaths remain undetermined.
The $24 Million SIM-Swapping Hack
- Michael Turpin, a crypto investor, fell victim to a SIM-swapping hack while attending a crypto conference in Las Vegas.
- Hackers gained access to his crypto wallets and stole $24 million worth of cryptocurrency within 1.5 hours while he was on the phone with AT&T customer service.
- SIM swapping involves tricking or bribing cell phone company employees to reassign a victim's phone number to a new phone, allowing hackers to reset passwords and access sensitive information.
- In 2022, over 1,600 SIM-swapping incidents were reported in the US, resulting in losses exceeding $68 million, as per the FBI.
- The perpetrators of Turpin's hack were a group of young gamers, led by a 15-year-old from New York.
- Turpin pursued legal action against AT&T for $224 million, but his civil case was dismissed, with the court ruling in favor of the telecommunications provider.
- Turpin plans to appeal the decision, as he believes SIM swapping remains a significant and ongoing problem, with smaller but still substantial sums being lost weekly.
- The challenge lies in addressing human vulnerability to manipulation, as even enhanced security measures may not fully protect against SIM-swapping attacks.