Tag Archives: scams

Morning Ethics Warm-Up, 6/19/2018: Double Standards And Greed

Time for a Good Morning song!

1. Life on Facebook. A lawyer friend who should know better posted a comment that began, “You wouldn’t think that posting something like ‘Taking children away from their parents and sticking them in cages is wrong’ would be controversial, but in almost every case where one of my friends has said something like this, at least one of his/her friends feels the need to argue about it…” Later he compared the statement “Taking children away from their parents and sticking them in cages is wrong” to “Torturing kittens is wrong.” I told him that as a lawyer, he should be objecting to and explaining the transparent deceit of “Taking children away from their parents and sticking them in cages is wrong”—a half-truth designed to stifle argument, not attacking those who are correctly pointing out the emotionalism and dishonesty of that tactic.

I should count up the number of lawyers whose comments on Facebook on this issue are pure “Think of the children!” with no substantive legal and policy analysis whatsoever. My friend also made the typical suggestion that only Trump voters—you know: morons—would argue with “Taking children away from their parents and sticking them in cages is wrong” as a fair and conclusive verdict on the current policy.

2. Theranos.  Elizabeth Holmes, founder and CEO of Theranos, as well as Ramesh Balwani, the company’s former president ( and Holme’s love interest, were indicted yesterday on charges of conspiracy and wire fraud. The Theranos debacle is a classic corporate fraud story on par with Enron, if not as wide-reaching.

I missed it. This is embarrassing for an ethics blog, and for someone who thinks he scours various news sources thoroughly enough to catch the major ethics stories. I blame Donald Trump, but I also blame the various news sources in 2015 that chose to report fake news, trivial news, future news and theoretical news rather than give a major corporate scandal the attention it deserved. If I missed the story, and I’m looking for it, what chance do normal people with sensible occupations have?

The civil fraud charges in the case were filed in March by the Securities and Exchange Commission, though the scandal had broken earlier, when the Wall Street Journal published its 2015 exposé.  Holmes and Balwani allegedly raised millions of dollars using false statements about how well the company’s  blood-testing device worked, while using  a contract with the Department of Defense and a partnership between Theranos and the pharmacy chain Walgreens to con pharmacies, doctors and the public. The apparent scam created a Business of Cards that, at its peak, had more than 800 employees and a paper valuation of $9 billion.

There is a book out about the Theranos scandal by the reporter who broke the story… Continue reading

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Filed under Arts & Entertainment, Business & Commercial, Childhood and children, Citizenship, Ethics Train Wrecks, Etiquette and manners, Facebook, Government & Politics, Health and Medicine, Journalism & Media, Law & Law Enforcement, Popular Culture

From The Ethics Alarms “Irony” Files: “The Association For Honest Attorneys” Has No Attorney Members…

The ABA Journal reports that the U.S. Tax Court ruled against The Association for Honest Attorneys (Known as A.H.A! ) this month, denying  tax-exempt status for the organization. Why? Well,  it hasn’t had any lawyer members since its founding in 2003, and no lawyer could be found to represent the group in its tax dispute. The group’s founder, Joan Farr, spent association money at grocery stores, department stores and home-improvement stores.

 

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Filed under Ethics Alarms Award Nominee, Ethics Dunces, Humor and Satire, Law & Law Enforcement, Professions

Morning Ethics Warm-Up, 2/7/2018: Something In This Post Is Guaranteed To Send You Screaming Into The Streets

Good Morning!

1 Oh no! Not my permanent record! My wife gave a small contribution to Mitt  Romney’s campaign, and has been hounded by RNC robocalls and mailings ever since. GOP fundraising started getting really slimy under the indefensible Michael Steele’s leadership, and continued to use unethical methods after Steele went on to job at a bait shop or something. Last week my wife got an envelope in the mail with a block red DELINQUENCY NOTICE! printed on it. A lie, straight up: there was no delinquency, just a my wife’s decision that she would rather burn a C-note than give it to the fools and knaves running the Republican Party. She registered an official complaint with the RNC, and received this response from Dana Klein, NRCC Deputy Finance Director:

“My job as the Deputy Finance Director is to communicate with supporters to let them know the status of their NRCC Sustaining Membership. Unfortunately, I have bad news for you. As of right now, you have a delinquency mark on your record for your failure to renew your membership. But, I have some good news. You can remove this delinquency mark if you renew by the FEC deadline on Wednesday.”

Both my wife and I were professional fundraisers for many years. This is deceptive and coercive fundraising, and anyone who voluntarily supports an organization that uses such tactics is a victim or an idiot.

Or, I suppose, a Republican.

2. Another one…This is another one of the statements that I am pledged to expose every time I read or hear it: a Maryland legislator, enthusing over the likelihood that a ballot initiative will result in legalizing pot in the state, ran off the usual invalid, disingenuous and foolish rationalizations for supporting measure. (Don’t worry, pot-lovers: I’m resigned to this happening, not just in Maryland, but nation wide. As with the state lotteries, our elected officials will trade the public health and welfare for easy revenue every time. Minorities and the poor will be the most hurt, and the brie and pot set couldn’t care less.) Only one of his familiar bad arguments triggered my mandatory response pledge: ” to legalize a drug that is less harmful than alcohol.”

This is the bottom of the rationalization barrel, “it’s not the worst thing.” Alcohol is a scourge of society, killing thousands upon thousands every year, ruining families and lives, wrecking businesses, costing the economy millions of dollars. Just yesterday there was a report that fetal alcohol syndrome was far more common that previously believed. There is no question, none, that U.S. society would be healthier and safer without this poison accepted in the culture: unfortunately, it was too deeply embedded before serious efforts were made to remove it. Now pot advocates want to inflict another damaging recreational drug on society, using the argument that it’s not as terrible as the ones we’re already stuck with. Stipulated: it’s not as harmful as alcohol. It’s not as harmful as Russian Roulette or eating Tidepods either. I have a bias against taking seriously advocates who use arguments like this; it means they re either liars, and know their logic is absurd, or idiots, and don’t.

3. Riddle me this: What do you get when you cross casting ethics, weak and lazy school administrators, political-correctness bullies-in-training with “The Hunchback of Notre Dame”?

Answer: a cancelled high school musical, and per se racism supported by the school.

New York’s Ithaca High School was beginning production of the Disney film-based musical “The Hunchback of Notre Dame” but made the unforgivable error, in the eyes of student activists,  of casting of a white student as a Romani heroine Esmeralda, played in the classic film by that gypsy wench, Maureen O’Hara, and in the Disney version by a Toon.  Several students quit the show in protest,  and formed an activist group to reverse the decision. It sent a letter calling the casting “cultural appropriation” and “whitewashing,” calling the student the “epitome of whiteness.” The letter admitted that she was also “a stellar actor, singer and dancer” that any stage would be “lucky to have,” but what is the talent, skill and competence required for a role compared to what really matters, her skin color? The students demanded that the school either choose a different show or recast Esmeralda a black and brown actress. Continue reading

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Filed under Arts & Entertainment, Character, Education, Ethics Alarms Award Nominee, Ethics Dunces, Government & Politics, Health and Medicine, Marketing and Advertising, Popular Culture, Race, Rights, Sports, U.S. Society

Morning Ethics Warm-Up, 2/2/18: Of Tyros, Typos, Grandstanders And Rotting Fish Heads

Good Morning!

1 Don’t try that here! Several commenters on the Ethics Hero post yesterday , about a British minister resigning in self-declared disgrace after he was late for a session in Parliament, argued that his wasn’t a true resignation because he had to know it wouldn’t be accepted. I had written a comment to that theory, but I decided to post it on the Warm-up instead.

Fake resignations are unethical. Ethical people don’t attempt such a stunt, which is designed to make everyone beg them to return and create a sense of power and importance. I learned long ago in my parallel theater and management careers not to trust or tolerate subordinates who threatened to quit, telling one cast member of this ilk, in what he thought was  too-vital a lead role to be relaced last in rehearsals and who made the threat in a full cast rehearsal, “You have ten seconds to either quit, be fired, or retract that threat. I’ll play your part myself if I have to, and I’ll be a lot better at it. 10-9-8…” He retracted the threat. When I took over a struggling, spectacularly badly managed health promotion organization in Maryland and announced major policy changes, two legacy managers of the non-profit handed in their resignations in protest.  Then they came to work the next day. My predecessor, it seemed, routinely tolerated such games. They were shocked, indignant and angry when I told them, “You don’t work here any more, remember? You quit. Good luck in your future endeavors. Now get out.”

Ethics Alarms, as veterans here know, has the same policy regarding commenters who self-exile, usually with a “Good day, sir! I am done here!” flourish. When they try to weigh in days, weeks, or months later, they find that their self-banning is permanent. This is now explicit in the Comments Policies. As at least six regulars here know from their own experiences, I reserve the right to try persuade a valued commenter to reconsider his or her exit, and I have done that as a manager with subordinates too. But anyone who counts on a resignation being rejected is a fool.

I have to believe that Lord Bates’s resignation was principled, not grandstanding.

2. Fox owes me a keyboard!  Yesterday afternoon,  I spit out a mouthful of coffee when Fox News flashed this news item under a feature while I was surfing the news channels to see what was happening to the “secret memo”: “Poll Says Majority of Americans Support Border Ball.”

This came up multiple times. I think spending billions of dollars for any ball is unethical, whether it is the party or the toy, or even if “Border ball” is a new professional sport that doesn’t give its players CTE.

And speaking of typos, yes, I would fire for cause everyone in the chain who let this happen…

If you don’t have enough respect for the government, its institutions and the nation to take more pride in your work than that, you shouldn’t be working for the government.

3. A show of hands: Who has heard about this depressing story? Anyone? Funny that the mainstream news media doesn’t think it’s newsworthy… The Atlanta Journal-Constitution reported that many of the nation’s “historically black colleges and universities” have ridiculously low graduation rates.  The newspaper found that the six-year graduation rates at twenty schools were 20% t or lower in 2015, and some schools in the category had graduation rates as low as 5%.  Here was the explanation offered by Marybeth Gasman, an education professor at the University of Pennsylvania who directs the Penn Center for Minority Serving Institutions: Continue reading

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Filed under Character, Education, Ethics Alarms Award Nominee, Ethics Dunces, Government & Politics, Health and Medicine, Journalism & Media, Law & Law Enforcement, Leadership, Race

The Unethical Fine Print Game

I am on record as believing that lawyers who intentionally assist their clients in burying unconscionable, unenforceable or unfair terms in standard contracts, usually in fine print, are unethical, and engaging in a professional violation of the Rules of Professional Conduct. I’ve offered several seminar hypotheticals on the topic to make my point, and have never encountered a lawyer who had a good defense for the practice. Usually the best they can come up with is “everybody does it” or “but it’s legal!” Of course, the bar associations are on their side, not mine, because, well, everybody does it. That’s a proverbial can of worms the bar associations don’t have the guts or integrity to open. What else could it be but unethical, however, when a client company says, “Make sure you bury this provision saying that they have no recourse if we cheat them in the fine print!” and the lawyer says, “But that’s unenforceable!” and the client says, “Yeah, but they won’t read it before signing, and when we point out that they did agree to it, maybe it will scare them off,”  and the lawyer shrugs and says, “Whatever you say! It’s your contract”?

WiFi companies are especially egregious in this regard. As an effort to show itself as above the field and avoiding the unethical industry practice, a British WiFi company, Purple, ran  a social science experiment, inserting language in its standard contract that obligated consumers to clean toilets at festivals and clear sewer blockages.  22,000 people signed up anyway. The contract stated–in fine print—that its signatories would be legally required to perform 1000 hours of community service, including, but not limited to, “cleaning toilets at festivals, scraping chewing gum off the streets” and “manually relieving sewer blockages.”

The gag clause was inserted in the company’s terms and conditions for a period of two weeks, “to illustrate the lack of consumer awareness of what they are signing up to when they access free WiFi .” Purple also offered a prize to anyone who actually read the terms and conditions, and found the “community service clause.” Only one person won it. Continue reading

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Morning Ethics Warm-Up: 6/25/17

1. On the same New York Times front page (June 21) that announced the Georgia 6 result, surrounded by Times’ agenda-advancing stories with slanted headlines (climate change, North Korea, the Obamacare overhaul,  the “divided GOP,” and Michael Flynn) was the kind of story that once made the Times’ reputation. It was headlined, “Haven for Recovery Becomes A Relapse Capitol,” Will this story be discussed today by the Sunday talking-head shows? Of course not. The implications of it are not friendly to progressive mythology.

The story explains how Delray Beach, Florida has become a Mecca for drug addicts and a bonanza for treatment centers and “sober houses,” group living facilities for addicts. Some quotes will provide a sense of the report, but you should read it all:

Unlike other places in the United States that have been clobbered by the opioid crisis, most of the young people who overdose in Delray Beach are not from here. They are visitors, mostly from the Northeast and Midwest, and they come for opioid addiction treatment and recovery help to a town that has long been hailed as a lifeline for substance abusers. But what many of these addicts find here today is a crippled and dangerous system, fueled in the past three years by insurance fraud, abuse, minimal oversight and lax laws. The result in Palm Beach County has been the rapid proliferation of troubled treatment centers, labs and group homes where unknowing addicts, exploited for insurance money, fall deeper into addiction.

Hundreds of sober homes — some reputable, many of them fraud mills and flop houses for drug users — sprawl across Delray Beach and several surrounding cities. No one knows exactly how many exist because they do not require certification, only city approval if they want to house more than three unrelated people. Hoping for a fresh start, thousands of young addicts from outside Florida wind up here in places that benefit from relapse rather than the recovery they advertise.

…the proliferation of fraudulent sober homes was in part also the result of two well-intentioned federal laws. First came a 2008 law that gave addicts more generous insurance benefits; then the Affordable Care Act, which permits adults under 26 to use their parents’ insurance, requires insurance companies to cover people with pre-existing conditions and allows for multiple drug relapses.

The result was a whole new category of young addicts with access to insurance benefits. This gave rise to a new class of abusive operator, as painstakingly chronicled in The Palm Beach Post: the corrupt sober house owner. Many drug treatment centers — which also treated inpatients — started paying sober-home owners “bonuses” from insurance money and fees for referring outpatients to their centers while they underwent therapy, according to law enforcement, a grand jury report and court records.

Sober homes, which are not covered by insurance, can get thousands of dollars a month for each recovering addict, in large part from treatment providers, law enforcement and city officials said. Much of it goes into the owners’ pockets. But it is also used to pay rent so patients can live free and to provide perks that lure patients from other sober houses: manicures, mopeds, gym memberships and, worst of all, drugs. Relapses are welcome because they restart the benefits clock.

To increase profits, many treatment centers and labs overbill insurance companies for unnecessary tests, including of urine, blood and DNA. Some have billed insurance companies thousands of dollars for a urine test screen. Patients often unnecessarily undergo multiple urine tests a week.

Ah, glorious compassion! So those of us who managed to not break laws and cripple ourselves while doing so get to pay for not only the self-inflicted problems of those who did, but also get to enrich  the scam-artists who live off of their addictions, protected by compassionate, expensive insurance guarantees that require no personal responsibility or accountability. Meanwhile, “federal disability and housing anti-discrimination laws offer strong protections to recovering addicts who live in them.”

This is the better “treatment” alternative to the “war on drugs” that the compassionate people harangued us about for decades. Continue reading

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Filed under Childhood and children, Government & Politics, Law & Law Enforcement, Quotes

Apology Not Acceptable: The Pastor, The Cake, And The Whole Foods Scam

This guy takes the cake...

This guy takes the cake…

Jordan Brown is the openly and presumably obviously  gay pastor at Austin’s Church of Open Doors. You will remember him if you saw his video last month explaining how an employee at the local Whole Foods, in an inexplicable burst of baker suicidal tendencies, had written in icing the legend “Love Wins Fag”—whatever that means—on a cake he had ordered there.

“When I got into my vehicle, I looked inside and saw they had wrote ‘Love Wins F–‘ on it,” Brown says in the video, in apparent emotional anguish. “You can see it nice and clear. Also, it is still in a sealed box. As you see, I have not opened up this box yet.” He also held a press conference, describing his feelings of humiliation when he finally got home with his cake and read the icing attack.

Then he sued the groceries giant, claiming that Whole Foods knew or should have known that cakes prepared by mad homophobic bakers in its employ might have “slurs or harassing messages” written on them and then be “presented to a customer without any oversight or prior warning.” Ah, if only Whole Food had said, to Brown, “We have to warn you, sir, we’ve written a homophobic slur on your cake. Have a nice day!”

Naturally, as with so many recent examples of members of frequently harassed and victimized groups, especially on campuses, creating their own racist, sexist or homophobic “hate crimes” and inventing  entire incidents, like Rolling Stone’s “Jackie,” the initial reaction of the news media was gullible acceptance, and the immediate response of social justice warriors was fury. Whole Foods was a cultural villain, and facing significant, business-threatening consequences.

Whole Foods did not turn the other cheek, however. It denied the allegations and countersued, stating that Brown “intentionally, knowingly and falsely accused Whole Foods and its employees of writing the homophobic slur … on a custom made cake that he ordered from WFM’s Lamar Store in Austin.” Whole Foods, ominously for Brown, said that it had video evidence proving that Brown had tampered with the cake.

Suddenly contrite in the face of resistance, the good pastor said, in effect, “Ooopsie!” He issued an e-mail, withdrawing his lawsuit and his story: Continue reading

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