By Colin Sholes

Guest writers continue through this week while Walt is on honeymoon! Today’s guest writer is Colin Sholes, who writes the excellent newsletter A Scammer Darkly.

It’s Not A Lie If You Believe It

A New York man scammed $1.3 million from friends, neighbors and investors by suckering them into a bogus real estate scheme, operating under various names including one that should have caught the attention of Seinfeld fans. He “held himself out as the owner … of Vandelay Contracting Corp.,” according to the government, the namesake of a company George Costanza once fabricated in a lower-stakes plot. Thomas Sfraga, the man behind Vandelay, pleaded guilty to federal wire fraud.

Dan Mangan, CNBC

Fake It When You Take It

Workers are tampering with company drug tests at unprecedented rates, according to one of the nation’s largest testing labs. The number of positive drug tests remained at a two-decade high for the third year in a row (though it’s down fully half since the freewheeling ‘90s), and the rate of invalid tests has skyrocketed. Six thousand urine tests were “substituted” and another 25,000 were invalid due to being mixed with additives or other substances meant to cloak the presence of drugs. In states where recreational marijuana is legal, the positive rate was twice as high as states where it remains illegal.

Joseph De Avila, The Wall Street Journal

Inadvisable

The IRS is considering whether it should tighten restrictions on “donor-advised funds,” a popular way for the ultra wealthy to “donate” to “charity” by putting money or large amounts of stock into funds with few requirements to readily disburse it. The largest, Silicon Valley Community Foundation, has $10.1 billion in net assets from some of America’s most notable tech oligarchs, who can immediately write off the tax benefits, even if the fund has not yet paid out. There is also little oversight for how DAFs distribute their money, creating concerns that wealthy donors can use funds as pass-throughs to steer their wealth to pet causes.

Stephanie Beasley, AP

All the Mills Unfit to Print

Scientific publisher Wiley has announced it is closing down 19 of its journals due to large-scale research fraud. In two years, it received 11,300 compromised papers, many submitted by “paper mills” that churn out citations in fabricated works, often to boost the profile of authors. Costs for a fake paper range from $50 to $8,500 for more prestigious outlets. While the practice has been going on for more than a decade, AI has supercharged the number of fake paper submissions, endangering the $30 billion academic publishing industry and the ability of researchers to find credible citations for their work.

Nidhi Subbaraman, The Wall Street Journal

Days Late and Dollars Short

Despite a surprising Supreme Court victory last week, the Consumer Financial Protection Bureau still faces an uphill battle to do its job. It faces an intransigent Fifth Circuit, a court with a seething contempt for both regulatory agencies and American consumers. Rather than lifting injunctions and stays immediately after the ruling, the Fifth has slow-walked a bank industry lawsuit against the CFPB’s attempts to cap credit card fees. Each day the rule doesn’t go into effect costs consumers $27 million in unnecessary late fees.

David Dayen, The American Prospect

Who Shot Ya

A reasonable person might believe it is a core function of policing to keep guns out of the hands of criminals. And yet, despite soaring budgets that take up increasingly large portions of municipal funds, police departments around the country have been selling old service weapons out the back door for a little extra scratch. Over a 16-year period ending in 2022, the ATF identified more than 52,000 guns formerly used by various police agencies that were recovered at crime scenes. The ATF only released the data under court order; it had attempted to keep secret the fact that police departments indirectly supply more than 3,000 weapons to criminals each year.

Joe Holden, CBS News

The Hive Mind

The lowest-paid tech workers are the ones responsible for keeping platforms and chatbots free of offensive content. Last week, 97 African workers who do AI training and content moderation for companies like OpenAI, Meta and Google published an open letter to President Biden in advance of a visit from Kenya’s president. For pay that hovers around $2 an hour, workers are subjected to some of the most vile sewage the internet produces, eight hours a day, with few breaks and little mental health support. The workers and their unions are demanding better conditions and asking the U.S. to hold its tech companies accountable for the behavior of their overseas contractors.

Caroline Haskins, WIRED

Follow Colin at A Scammer Darkly.

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