The co-founder of Silicon Valley-based software testing startup HeadSpin was sentenced Friday to 18 months in prison and a $1 million fine, reports SFGate — for defrauding investors. Lachwani pleaded guilty to two counts of wire fraud and a count of securities fraud in April 2023, after federal prosecutors accused him of, for years, lying to investors about HeadSpin's finances to raise more money. HeadSpin, founded in 2015, grew to a $1.1 billion valuation by 2020 with over $115 million in funding from investors including Google Ventures and Iconiq Capital... He had personally altered invoices, lied to the company accountant and sent slide decks with fraudulent information to investors, [according to the government's 2021 criminal complaint]... Breyer, per the New York Times, rejected Lachwani's lawyer's argument that because HeadSpin investors didn't end up losing money, he should receive a light sentence. The judge, who often oversees tech industry cases, reportedly said: "If you win, there are no serious consequences — that simply can't be the law." Still, the sentencing was far lighter than it could have been. The government's prosecuting attorneys had asked for a five-year prison term. The New York Times reported in December that HeadSpin's financial statements had "often arrived months late, if at all, investors said in legal declarations," while the company's financial department "consisted of one external accountant who worked mostly from home using QuickBooks." And the comnpany also had no human resources department or organizational chart... After Manish Lachwani founded the Silicon Valley software start-up HeadSpin in 2015, he inflated the company's revenue numbers by nearly fourfold and falsely claimed that firms including Apple and American Express were customers. He showed a profit where there were losses. He used HeadSpin's cash to make risky trades on tech stocks. And he created fake invoices to cover it all up. What was especially breathtaking was how easily Mr. Lachwani, now 48, pulled all that off... [HeadSpin] had no chief financial officer, had no human resources department and was never audited. Mr. Lachwani used that lack of oversight to paint a rosier picture of HeadSpin's growth. Even though its main investors knew the start-up's financials were not accurate, according to Mr. Lachwani's lawyers, they chose to invest anyway, eventually propelling HeadSpin to a $1.1 billion valuation in 2020. When the investors pushed Mr. Lachwani to add a chief financial officer and share more details about the company's finances, he simply brushed them off. These details emerged this month in filings in U.S. District Court for the Northern District of California after Mr. Lachwani had pleaded guilty to three counts of fraud in April... The absence of controls at HeadSpin is part of an increasingly noticeable pattern at Silicon Valley start-ups that have run into trouble. Over the past decade, investors in tech start-ups were so eager to back hot companies that many often overlooked reckless behavior and gave up key controls like board seats, all in the service of fast growth and disruption. Then when founders took the ethos of "fake it till you make it" too far, their investors were often unaware or helpless... Now, amid a start-up shakeout, more frauds have started coming to light. The founder of the college aid company Frank has been charged, the internet connectivity start-up Cloudbrink has been sued, and the social media app IRL has been investigated and sued. Last month, Mike Rothenberg, a Silicon Valley investor, was found guilty on 21 counts of fraud and money laundering. On Monday, Trevor Milton, founder of the electric vehicle company Nikola, was sentenced to four years in prison for lying about Nikola's technological capabilities. The Times points out that similarly, FTX only had a three-person board "with barely any influence over the company, tracked its finances on QuickBooks and used a small, little-known accounting firm." And that Theranos had no financial audits for six years.

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Crypto entrepreneur Sam Bankman-Fried was sentenced Thursday to 25 years [non-paywalled link] in prison for a massive fraud that unraveled with the collapse of FTX, once one of the world's most popular platforms for exchanging digital currency. From a report: Bankman-Fried, 32, was convicted in November of fraud and conspiracy -- a dramatic fall from a crest of success. U.S. District Judge Lewis A. Kaplan imposed the sentence in the same Manhattan courtroom where, four months ago, Bankman-Fried testified that his intention had been to revolutionize the emerging cryptocurrency market with his innovative and altruistic ideas, not to steal. Kaplan said the sentence reflected "that there is a risk that this man will be in position to do something very bad in the future. And it's not a trivial risk at all." He added that it was "for the purpose of disabling him to the extent that can appropriately be done for a significant period of time." Prior to sentencing, Bankman-Fried had said, "My useful life is probably over. It's been over for a while now, from before my arrest."

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An anonymous reader quotes a report from Techdirt: Nigeria doesn't exactly have a stellar reputation when it comes to respecting the speech rights of its own citizens, nor the rights of platforms that its citizens use. But I will admit that even with that reputation in place, I'm a bit at a loss as to why the country decided to arrest and charge a woman for violating those same laws because she wrote an unkind review of a can of tomato puree on Facebook: "A Nigerian woman who wrote an online review of a can of tomato puree is facing imprisonment after its manufacturer accused her of making a 'malicious allegation' that damaged its business. Chioma Okoli, a 39-year-old entrepreneur from Lagos, is being prosecuted and sued in civil court for allegedly breaching the country's cybercrime laws, in a case that has gripped the West African nation and sparked protests by locals who believe she is being persecuted for exercising her right to free speech." By now you're wondering what actually happened here. Well, Okoli got on Facebook after having tried a can of Nagiko Tomato Mix, made by local Nigerian company Erisco Foods. Her initial post essentially complained about it being too sugary. So pretty standard fair for a review-type post on Facebook. When she started getting some mixed replies, some of them told her to stop trying to ruin the company and just buy something else, with one such message supposedly coming from a relative of the company's ownership. To that, she replied: "Okoli responded: 'Help me advise your brother to stop ki***ing people with his product, yesterday was my first time of using and it's pure sugar.'" By the way, you can see all of this laid out by Erisco Foods itself on its own Facebook page. The company also claims that she exchanged messages with others talking about how she wanted to trash the product online so that nobody would buy it and that sort of thing. Whatever the truth about that situation is, this all stems from a poor review of a product posted online, which is the kind of speech countries with free speech laws typically protect. In Okoli's case, she was arrested shortly after those posts. [...] Okoli is pregnant and was placed in a cell during her arrest that had water leaking into it, by her account. She was also forced to apologize to Erisco Foods as part of her bond release, which she then publicly stated was done under duress and refused to apologize once out of holding. Okoli is also countersuing both Erisco Foods and the police, arguing for a violation of her speech rights.

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A SWAT team in St. Louis County mistakenly raided the home of Brittany Shamily and her family, based on the inaccurate tracking of stolen AirPods by the "FindMy" app. The family is suing for damages stemming from embarrassment, unreasonable use of force, loss of liberty, and other factors. The Riverfront Times reports: Around 6:30 p.m. on May 26, Brittany Shamily was at home with her children, including an infant, when police used a battering ram to bust in her front door. "What the hell is going on?" she screamed, terrified for herself and her family. "I got a three-month-old baby!" Body camera footage from the scene shows Shamily come to the front door, her hands up, her face a mix of fright and utter confusion at the heavily armed folly making its way from her front porch into her foyer. "Oh my god," she says. The SWAT team was looking for guns and other material related to a carjacking that had occurred that morning. Their search didn't turn up any of that -- though it has led to a lawsuit, filed Friday, that may lead to a better public understanding of how county police decide whether to deploy a SWAT team or serve a search warrant in a less menacing manner. Because in this case, the police clearly made the wrong call. The carjacking that led to the raid happened about 12 hours prior, 16 miles away, in south county. Around 6 a.m., two brothers were leaving the Waffle House on Telegraph Road near Jefferson Barracks when a group of six people pulled up outside the restaurant and carjacked them. Two of the carjackers took off in the brothers' Dodge Charger while the other four fled the scene in their own vehicles. St. Louis County Police were summoned to the scene. As part of their investigation, a friend of the carjacked brothers told police that his AirPods were in the stolen car and that he could track them using the "FindMy" application, a feature that lets users locate one Apple device using another. Police did just that and, according to the lawsuit, the app showed the AirPods to be at Shamily's house. There was just one problem. "FindMy is not that accurate," says the family's lawyer, Bevis Schock. "I actually went to my house with my co-counsel and played around with it for an hour. It's just not that good." Yet based on the "FindMy" result, an officer signed an application for a search warrant saying he had reason to believe that "firearms, ammunition, holsters" and other "firearm-related material" were inside. That evening, police showed up in full combat gear carrying a battering ram. [...] While the family was detained outside, the SWAT team "ransacked" their house, the lawsuit says. One SWAT team member punched a basketball-sized hole in the drywall. Another broke through a drop ceiling. They turned over drawers and left what had been an orderly house in disarray. After this had gone on for more than half an hour, the AirPods were located -- on the street outside the family's home. Unfortunately, this isn't the first time something like this has happened. In January 2022, SWAT teams in Denver raided an elderly woman's home after the "FindMy" app falsely pinged her home as the location of a stolen iPhone. The woman was recently awarded $3.76 million in compensation and damages.

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Sam Bankman-Fried should spend between 40 and 50 years in prison after being convicted for stealing $8 billion from customers of his now-bankrupt FTX cryptocurrency exchange, prosecutors said on Friday. From a report: "His life in recent years has been one of unmatched greed and hubris; of ambition and rationalization; and courting risk and gambling repeatedly with other people's money," federal prosecutors in Manhattan wrote. "And even now Bankman-Fried refuses to admit what he did was wrong." A jury found Bankman-Fried, 32, guilty in November on seven counts of fraud and conspiracy. Lawyers for the former billionaire told U.S. District Judge Lewis Kaplan that a 5-1/4 to 6-1/2 year prison term would be appropriate. They said FTX clients would get most of their money back, and that Bankman-Fried did not set out to steal. Kaplan is scheduled to sentence Bankman-Fried on March 28 in Manhattan federal court. Bankman-Fried plans to appeal his conviction and sentence.

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An anonymous reader quotes a report from BleepingComputer: FBI's Internet Crime Complaint Center (IC3) has released its 2023 Internet Crime Report (PDF), which recorded a 22% increase in reported losses compared to 2022, amounting to a record of $12.5 billion. The number of relevant complaints submitted to the FBI in 2023 reached 880,000, 10% higher than the previous year, with the age group topping the report being people over 60, which shows how vulnerable older adults are to cybercrime. Both figures continue a worrying trend seen by the agency since 2019, where complaints and losses rise yearly. For 2023, the types of crimes that increased were tech support scams and extortion, whereas phishing, personal data breach, and non-payment/non-delivery scams slightly waned.

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Linwei Ding, a former Google software engineer, has been indicted for stealing trade secrets related to AI to benefit two Chinese companies. He faces up to 10 years in prison and a $250,000 fine on each criminal count. Reuters reports: Ding's indictment was unveiled a little over a year after the Biden administration created an interagency Disruptive Technology Strike Force to help stop advanced technology being acquired by countries such as China and Russia, or potentially threaten national security. "The Justice Department just will not tolerate the theft of our trade secrets and intelligence," U.S. Attorney General Merrick Garland said at a conference in San Francisco. According to the indictment, Ding stole detailed information about the hardware infrastructure and software platform that lets Google's supercomputing data centers train large AI models through machine learning. The stolen information included details about chips and systems, and software that helps power a supercomputer "capable of executing at the cutting edge of machine learning and AI technology," the indictment said. Google designed some of the allegedly stolen chip blueprints to gain an edge over cloud computing rivals Amazon.com and Microsoft, which design their own, and reduce its reliance on chips from Nvidia. Hired by Google in 2019, Ding allegedly began his thefts three years later, while he was being courted to become chief technology officer for an early-stage Chinese tech company, and by May 2023 had uploaded more than 500 confidential files. The indictment said Ding founded his own technology company that month, and circulated a document to a chat group that said "We have experience with Google's ten-thousand-card computational power platform; we just need to replicate and upgrade it." Google became suspicious of Ding in December 2023 and took away his laptop on Jan. 4, 2024, the day before Ding planned to resign. A Google spokesperson said: "We have strict safeguards to prevent the theft of our confidential commercial information and trade secrets. After an investigation, we found that this employee stole numerous documents, and we quickly referred the case to law enforcement."

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In a first-of-its-kind prosecution, a California man was arrested and charged Monday with allegedly smuggling potent, greenhouse gases from Mexico. From a report: Michael Hart, a 58-year-old man from San Diego, pleaded not guilty to smuggling hydrofluorocarbons, or HFCs -- commonly used in air conditioning and refrigeration -- and selling them for profit, in a federal court hearing Monday. According to the indictment, Hart allegedly purchased the HFCs in Mexico and smuggled them into the US in the back of his truck, concealed under a tarp and tools. He is then alleged to have sold them for a profit on sites including Facebook Marketplace and OfferUp. [...] Hart has pleaded not guilty to 13 charges including conspiracy, importation contrary to law and sale of merchandise imported contrary to law. The charges carry potential prison sentences ranging from five to 20 years. HFCs, which are also used in building insulation, fire extinguishing systems and aerosols, are banned from import into the US without permission from the Environmental Protection Agency. These greenhouse gases are short-lived in the atmosphere," but powerful -- some are thousands of times more potent than carbon dioxide in the near-term. "The illegal smuggling of hydrofluorocarbons, a highly potent greenhouse gas, undermines international efforts to combat climate change," said David M. Uhlmann, the assistant administrator for the EPA's Office of Enforcement and Compliance Assurance. "Anyone who seeks to profit from illegal actions that worsen climate change must be held accountable," he added. "Today is a significant milestone for our country," said US Attorney Tara McGrath in a statement. "This is the first time the Department of Justice is prosecuting someone for illegally importing greenhouse gases, and it will not be the last."

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According to the San Francisco police department, police have made the first arrest in relation to several recent vehicle arsons, including the crowd attack of a Waymo robotaxi last month in Chinatown. The San Francisco Standard reports: Police say officers arrested a man meeting the description of a person suspected of lighting several vehicles on fire. That man was arrested on Feb. 27 near Union Square. The department did not share the suspect's name because it said the case is open and remains under investigation. Nor did the department comment on which other vehicle fires the suspect may have been suspected of starting. Several Teslas were set alight in the weeks after the Waymo arson. The suspect was also found to have had methamphetamine on them.

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In 1970 an Oregon man discovered a body with "clear signs of foul play". NPR reports that "The identity of the young woman remained a mystery — until Thursday." State authorities identified the woman as Sandra Young, a teenager from Portland who went missing between 1968 and 1969. Her identity was discovered through advanced DNA technology, which has helped solve stubborn cold cases in recent years. The case's breakthrough came last year in January, when a person uploaded their DNA to the genealogy database GEDMatch and the tool immediately determined that the DNA donor was a distant family member of Young.... From there, a genetic genealogist working with local law enforcement helped track down other possible relatives and encouraged them to provide their DNA. That work eventually led to Young's sister and other family members, who confirmed that Young went missing around the same time. Thanks to Slashdot reader Tony Isaac for sharing the news.

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In 1970 an Oregon man discovered a body with "clear signs of foul play". NPR reports that "The identity of the young woman remained a mystery — until Thursday." State authorities identified the woman as Sandra Young, a teenager from Portland who went missing between 1968 and 1969. Her identity was discovered through advanced DNA technology, which has helped solve stubborn cold cases in recent years. The case's breakthrough came last year in January, when a person uploaded their DNA to the genealogy database GEDMatch and the tool immediately determined that the DNA donor was a distant family member of Young.... From there, a genetic genealogist working with local law enforcement helped track down other possible relatives and encouraged them to provide their DNA. That work eventually led to Young's sister and other family members, who confirmed that Young went missing around the same time. Thanks to Slashdot reader Tony Isaac for sharing the news.

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"A ransomware gang once thought to have been crippled by law enforcement has snarled prescription processing for millions of Americans over the past week..." reports the Washington Post. "The hackers stole data about patients, encrypted company files and demanded money to unlock them, prompting the company to shut down most of its network as it worked to recover." Insurance giant UnitedHealthcare Group said the hackers struck its Change Health business unit, which routes prescription claims from pharmacies to companies that determine whether patients are covered by insurance and what they should pay... Change Health and a rival, CoverMyMeds, are the two biggest players in the so-called switch business, charging pharmacies a small fee for funneling claims to insurers. "When one of them goes down, obviously it's a major problem," said Patrick Berryman, a senior vice president at the National Community Pharmacists Association... UnitedHealth estimated that more than 90 percent of the nation's 70,000-plus pharmacies have had to alter how they process electronic claims as a result of the Change Health outage. But it said only a small number of patients have been unable to get their prescriptions at some price. At CVS, which operates one of the largest pharmacy networks in the nation, a spokesperson said there are "a small number of cases in which our pharmacies are not able to process insurance claims" as a result of the outage. It said workarounds were allowing it to fill prescriptions, however... For pharmacies that were not able to quickly route claims to a different company, the Change Health outage left pharmacists to try to manually calculate a patient's co-pay or offer them the cash price. Compounding the impact, thousands of organizations cut off Change Health from their systems to ensure the hackers did not infect their networks as well... The attack on Change Health has left many pharmacies in a cash-flow bind, as they face bills from the companies that deliver the medication without knowing when they will be reimbursed by insurers. Some pharmacies are requiring customers to pay full price for their prescriptions when they cannot tell if they are covered by insurance. In some cases, that means people are paying more than $1,000 out of pocket, according to social media posts. The situation has been "extremely disruptive," said Erin Fox, associate chief pharmacy officer at University of Utah Health. "At our system, our retail pharmacies were providing three-day gratis emergency supplies for patients who could not afford to pay the cash price," Fox said by email. "In some cases, like for inhalers, we had to send product out at risk, not knowing if we will ever get paid, but we need to take care of the patients." Axis Pharmacy Northwest near Seattle is "going out on a limb and dispensing product with absolutely no inkling if we'll get paid or not," said Richard Molitor, the pharmacist in charge. UPDATE: CNN reports Change Healthcare has now announced "plans for a temporary loan program to get money flowing to health care providers affected by the outage." It's a stop-gap measure meant to give some financial relief to health care providers, which analysts say are losing millions of dollars per day because of the outage. Some US officials and health care executives told CNN it may be weeks before Change Healthcare returns to normal operations. "Once standard payment operations resume, the funds will simply need to be repaid," the company said in a statement. Change Healthcare has been under pressure from senior US officials to get their systems back online. Officials from the White House and multiple federal agencies, including the department of Health and Human Services, have been concerned by the broad financial and health impact of the hack and have been pressing for ways to get Change Healthcare back online, sources told CNN... In a message on its website Friday afternoon, Change Healthcare also said that it was launching a new version of its online prescribing service following the cyberattack. Thanks to Slashdot reader CaptainDork for sharing the news.

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