Go To Zelle
This Week in Blunders – Dec. 15-21
“OK, boys; let's go make a withdrawal.” – John Dillinger
Bank of America, JPMorgan Chase and Wells Fargo have lost $870 million through their low-security Zelle app, according to the Consumer Financial Protection Bureau, which filed a lawsuit against them on Friday for “allowing fraud to fester.”
The complaint – which also names the payment network’s operator, Early Warning Systems – claims that the banks rushed the app to market in 2017 to compete with Venmo and Cash App. In the mad scramble, they neglected customer safeguards.
The lawsuit claims the banks also denied assistance to hundreds of thousands of consumers who filed fraud complaints. Some were told to just contact the people who ripped them off to resolve the problem.
“Zelle became a gold mine for fraudsters, while often leaving victims to fend for themselves,” said CFPB Director Rohit Chopra.
The action comes in the waning days of the Biden administration. It will be astonishing if it survives the next administration.
Zelle blames politics and said it will fight.
“The CFPB’s misguided attacks will embolden criminals, cost consumers more in fees, stifle small businesses and make it harder for thousands of community banks and credit unions to compete,” said Zelle spokeswoman Jane Khodos.
Yeah, and for all you thieving hackers out there: You can all just go to Zelle.
Cash App killer convicted
The tech consultant charged with stabbing Cash App founder Bob Lee in San Francisco in 2023 was found guilty of second-degree murder on Tuesday.
Prosecutors had alleged that Nima Momeni killed Lee because Lee had introduced his younger sister to a drug dealer, plied her with drugs and sexually assaulted her.
Momeni, on the other hand, claimed that Lee had come at him with a knife after he scolded Lee about searching for a strip club that night.
However it went down, evidence showed it was a drug-and-alcohol-fueled tragedy, and it highlights the morally bankrupt culture of Silicon Valley and its shameless parade of crypto clowns.
After creating Cash App, Lee became a celebrated entrepreneur. He went on to work for the company behind cryptocurrency MobileCoin, and now he’s dead at age 43. Some run, huh?
In his typical disinformation style, President Un-Elect Elon Musk used Lee’s murder to tweet: “Violent crime in SF is horrific and even if attackers are caught, they are often released immediately.”
Well, Momeni is facing 16 years to life. And it sounds like Musk should be complaining more about crime in the tech industry than on the streets of San Francisco.
America can’t get enough of Luigi
It’s not right gunning down a CEO in the street and it’s damn cowardly shooting him in the back. Nevertheless, Luigi Mangione is a sensation and filmmakers are racing to churn out his story for his growing fan base.
ABC came across the finish line first on Thursday with a one-hour special, “Manhunt: Luigi Mangione and the CEO Murder.” If you missed it, it’s streaming on Hulu.
Also, two-time Emmy nominee Stephen Robert Morse is working up a Netflix documentary, Variety reports. Morse produced “Amanda Knox,” and directed “How to Rob a Bank” for Netflix.
“This case is complex and raises important questions about vigilantism, the devastating cost of a privatized healthcare system and the inevitability of violence when peaceful change is seen as impossible,” Morse told Variety.
On another front, Anonymous Content and Alex Gibney’s Jigsaw Prods confirmed they too are working on a documentary.
“The new doc,” Variety reports, “will explore how killers are created, what this killing says about our society and the values we place on who lives and who dies.”
Since the Dec. 4 shooting of UnitedHealthcare CEO Brian Thompson, 50, state and federal prosecutors have been piling charges on Mangione, who is set to appear in court again on Monday. They’re miffed at the surprising support for Mangione and worried it could taint a jury pool in his favor.
Meantime, Mangione is collecting fan mail and donations behind bars, and social media support for the suspect remains out of control. A picture displayed near his hometown even depicts him as Jesus.
‘Quantum of dishonesty’
Perhaps it wasn’t clear just how much Ozy Media founder Carlos Watson lied, but it was enough for federal judge Eric Komitee to slap him with nearly 10 years in prison on Monday.
“The quantum of dishonesty in this case was exceptional,” he said.
It sounded so James Bond. "When the quantum of solace drops to zero, humanity and consideration of one human for another is gone and the relationship is finished,” Bond author Ian Fleming once wrote.
Watson, 55, maintained his innocence throughout the trial, claiming he made good-faith assessments of Ozy’s finances. He also blamed subordinates for the fraud.
Evidence showed the company lied about revenue, cash-on-hand, profits, celebrity ties, acquisition prospects and contract negotiations.
And then there was that infamous phone call with Goldman Sachs executives. In a desperate bid to raise money for a sinking media startup, Chief Operating Officer Samir Rao had impersonated a YouTube executive on the call. He testified that Watson was in on this fraud, as well.
It was quite a quantum, whatever that means.
As for the quantum of solace, there’s at least one place it can drop to zero: federal prison.
Walmart sends the wrong message
Walmart is putting body cameras on some of its employees in some of its stores, CNBC reported on Tuesday.
This is the nation’s largest private employer, and apparently, it sucks working there so much that associates might need to document the abuse they get from customers.
Seems like a tacit admission that its stores are filled with riffraff and that its employees are so useless that they send too many shoppers into rages.
The business news reads more and more like a crime blotter every week. Business Blunders is here to raise awareness of the dangers. Please help make the financial world a more honest, less-reckless, less-authoritarian place by:
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Call me old fashioned but I don't trust any of those payment apps - Venmo, Zelle, PayPal. Especially PayPal. And hope these billionaire company owners are reading their newspapers.... People are fed up and they are angry. I'm afraid it will get worse before it gets better.