Rov_Scam
35m ago
An even better example would be if investigators discovered several invoices to contractors for "trail obliteration" totaling hundreds of thousands of dollars. Trail obliteration is the process of disbanding and renaturalizing eroded, worn out trails to limit additional damage and provide a better user experience through reroutes. At minimum, this can be done by volunteers in an afternoon by disguising the entrance of the old trail with brush for the first 50 yards or so. At maximum, this can involve going in with heavy equipment to regrade the entire corridor, followed by covering the disturbed area with brush and new plantings. It's a necessary management practice where appropriate, but it's always a hard sell to donors, land managers, and even within the organization, because when you have to fight tooth and nail to get every mile of trail built no one wants to hear how much money you plan on spending to get rid of mileage. But identifying old, unsustainable trails and getting rid of them is a best practice, and this type of work is related to the core mission of any trail development organization, regardless of how contradictory or unpopular it may be. It is not, however, evidence that the organization hates trails and is trying to get rid of them.
Do you seriously believe that the reason the SPLC gave these groups money is because their directors are actually white supremacists who are trying to fleece their liberal donors? Because that's what would be required for their donations to constitute the kind of fraud that you're alleging. It seems more likely to me that, whatever their exact thought process, it was part of a scheme that they thought would benefit their mission. It may have been a dumb, misguided scheme that was unlikely to work and that would have pissed off their donors had they known about it, but wire fraud isn't about making misleading statements over the internet that some people don't like. It's a crime with specific elements that must be satisfied, and there's no evidence that they were satisfied in this case.
That seems like money laundering to me. I mean, they are setting up phony bank accounts in order to conceal the source of money.
Whether or not it seems like money laundering to you is irrelevant. Let's look at the statute:
Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity...with the intent to promote the carrying on of specified unlawful activity; or knowing that the transaction is designed in whole or in part to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity...shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both.
I've omitted a lot of irrelevant surplussage, but the upshot is that you can't launder legally earned money. It isn't a crime to play secret Santa. If there's no fraud, then there's no laundering.
Rov_Scam
4hr ago
This is pretty thin gruel. Nonprofits have broad discretion to use unrestricted funds any way they see fit to support their mission. Cases of nonprofit fraud usually fall into five general categories:
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Entirely fraudulent nonprofits: These are grifts from the beginning where the founders never intended to spend any of the money they raised on the ostensible purpose and only lined their pockets. This is the most obvious fraud.
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Embezzlement: Where an employee or director of a legitimate nonprofit misappropriates funds to line his pocket. Again, an obvious fraud, though it's limited to one person (or a few people) and isn't representative of the organization as a whole.
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Questionable nonprofits: This is a term I made up to refer to organizations whose administrative expenses are grossly disproportionate to program expenses. E.g., a food pantry in a large city that raised $45 million one year but only distributed $149,000 worth of food. These are usually the biggest media scandals because they often involve large organizations that do a lot of advertising and fundraising, reflected in financial statements that suggest they spend money on little else than advertising and fundraising.
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Improper use of restricted funds: This is often benign in a PR sense but serious in a legal sense. If someone donates money for a specific project, it can't be used for another project or to cover general expenses. If the food bank in the above example solicited donations for a building fund that would pay for planned renovations to their facility, and when food stamps were in jeopardy last fall they raided the fund to buy food for the needy, one could argue that it wasn't that big of a deal, maybe even the right thing to do. But it isn't permitted.
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Other improper use of funds: Again, this usually involves some personal benefit to the organization's employees or directors, like directing program services towards them or distributing profits. It also includes other miscellaneous non-nos like spending money on political campaigns or endorsements and improperly paying volunteers in ways that subject you to labor laws that you aren't following.
The first thing I would note for any of these is that none of them is particularly likely to result in a Federal fraud indictment. regulation of nonprofits is done at the state level, usually by the AG. Federal involvement is limited to the IRS for tax status and the FTC if they are large organizations that do a lot of advertising. What SPLC is accused of doing, though, doesn't fit into any of these categories, and there's no clear violation of nonprofit law. What the indictment accuses them of is fraudulently soliciting donations by using the funds in a manner that is inconsistent with the mission statement as it appears on their website. If what they are accused of doing is a matter for Federal criminal charges, then practically every nonprofit in the country should be charged, mostly for stuff that is entirely unobjectionable.
Consider the following fictional example: The Allegheny Trails Alliance is a nonprofit whose advertised mission is to support trail maintenance and construction on public lands in Pennsylvania and West Virginia. They donate $10,000 in unrestricted funds to support a trail construction project in Garret State Forest in Western Maryland, which is outside of their technical operating area but is frequented by the same people who frequent trails in PA and WV. Is this wire fraud? What if they pay a contractor to perform invasive species removal at a state park where they have a maintenance contract? Is this wire fraud because it isn't directly related to trail construction or maintenance?
The answer is no, because advertising gets a lot of leeway when it comes to promises like this. Practically every product you buy contains some kind of statement that would constitute fraud if we held the manufacturers to their exact word. The biggest risk to a nonprofit spending program funds like this is from donors, who might not donate again if they don't like the projects. From a legal perspective, what matters is the mission statement that appears in official filings, and even then, most nonprofits write these as widely as possible, state AGs will only pursue the most egregious violations, and the penalties are civil, not criminal. But in SPLC's case, it's not even clear that what they did violated their ostensible mission. I don't think Todd Blanche or anyone else in the administration is going to argue that SPLC gave money to hate groups because they really like white supremacy. It's pretty uncontroversial that they were using the money to pay informants, and that they notified the authorities if any illegal activity was discovered. It may be a shady practice, but it's not directly contrary to their mission, and when you add that to the fact that the government is relying on an advertising statement on a website as an inducement for fraud, it's hard to see how this stands up.
The bank fraud allegations seem more serious, but upon closer inspection, they aren't. What they basically did is have an employee open up various accounts in the name of fictitious sole proprietorships. The SPLC then put money into these accounts, which were used to funnel money to organizations they targeted. The purpose of the fictitious businesses was to disguise the origin of the money from the organizations. If we look at the text of the statute they are indicted under:
Whoever knowingly makes any false statement or report, or willfully overvalues any land, property or security, for the purpose of influencing in any way the action of...any institution the accounts of which are insured by the Federal Deposit Insurance Corporation...upon any application, advance, discount, purchase, purchase agreement, repurchase agreement, commitment, loan, or insurance agreement or application for insurance or a guarantee, or any change or extension of any of the same, by renewal, deferment of action or otherwise, or the acceptance, release, or substitution of security therefor, shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
I omitted a lot of surplussage there. In fact, I admitted so much surplussage that I wouldn't be surprised if the attorney presenting this to the grand jury read the part up to the ellipses and skipped to the end, because, and I never thought I'd say this, the indictment doesn't allege facts that make a prima fascia case! I don't see anything in that statute about opening a bank account. If you read the entire section, including the short title, it's clear that it is referring to loan applications. There are no allegations in the indictment that the SPLC ever applied for a loan. There might be some FinCen reporting requirements or something that they violated, but cursory searching has failed to uncover anything that would have been in force when the accounts were opened in 2008, which incidentally creates a statute of limitations problem as well.
The money laundering charges are subordinate to the fraud charges, and are thus bogus. I predict this goes nowhere.
Rov_Scam
1d ago
I don't know that this is true. I used to do a fair amount of genealogy for work and large age gaps were pretty common in the old days. Even in my own family, my great aunt married a guy in 1931 (when she was 20) who was about 20 years older than her, and only a couple years younger than her parents. This aunt was like a grandmother to me but I never knew her husband, as he died in 1963, and I didn't really know much about him. Years later, my dad a comment about him along the line of the following when we were talking about the family history: "I don't know what she saw in him. He was like an old man, he never had a steady job, he was mean. I don't understand why my grandparents let her marry that guy." My uncle told a story about his first driving experience, when Uncle Lee asked him to take him to Oakland so he could buy a piss urinal for his basement. He used to tinker around down there and didn't want to walk upstairs and was tired of peeing in a bottle. So he asked my uncle, despite the fact that my uncle was only 13 at the time. My uncle said "Don't you need a permit or something?" and he just waved his hand and said no. So my uncle drove him to Oakland. He had a winter coat on and turned the heat up all the way in the car even though it was June. When they got there the place didn't have one and Uncle Lee got pissed off at the manager. Then when they were leaving my uncle backed into the alley and ran over a bicycle that was lying in the street. Uncle Lee got out and threw it while yelling "Goddamn kids with their toys!" Apparently my grandfather hit the ceiling when he found out about it.
Rov_Scam
2d ago
No, but most of the companies that went bust weren't ISPs but ancillary companies that had nothing to do with the Internet itself. Telecom definitely took a hit, but thatbwas due to optimistic demand projections that led to infrastructure build out that wasn't needed, not because they weren't charging customers enough. The current situation is like if they did what they did while offering everyone free access while undercharging people for faster connections. In any event, that build out was based largely on what the technology could already do, not what it theoretically might be able to do in the future. The money also wasn't nearly as much. The current situation is like if the ISPs were spending ten times as much money and were all unprofitable, and traditional telecom companies providing the same service were all losing money on it. In that case it's likely that Internet service would become hard to come by and expensive after the crash and it would have delayed the technilogy's adoption.
Rov_Scam
3d ago
If that were the end of the story it wouldn't be an issue. It's that it evidently uses significantly more computing power than the performance improvement would suggest, raising the spectre of rapidly diminishing returns.
Rov_Scam
4d ago
And LLMs are horrendously incapable of returning all matches for a query, even a super simple one.
Good God, that's a frustration that I totally forgot about in my various AI criticisms. I have, on multiple occasions specifically asked it to "Provide a comprehensive list of X", which list would include dozens of items, and it instead provides 5 examples, complete with shitty summaries I didn't ask for, which examples are the most obvious and well-known examples (obviously pulled from the Wikipedia page) that I wouldn't need a trillion-dollar technology to find.
Rov_Scam
5d ago
I had my first "AI at work" experience the other day when I sat through a luncheon meeting presented by a rep for one of the big legal research companies. It was billed as a continuing education event but was really just a sales pitch for their AI products. The guy was able to cite two uses for AI in the legal field:
- Legal research
- Pulling information from documents (in this case up to 5000 pages)
That's all well and dandy, but I don't do either of those things very often. This wasn't presented as "the technology is quickly changing and you'll be able to do more in the future" as much as "this is all you can do within the bounds of ethics and without exposing yourself to a malpractice suit". The idea that law firms will consist of a few partners handling a suspiciously large number of cases by prompting AI to generate outputs is pure fantasy. The people who think that AI will take over everything do so on the assumption that all work boils down to a set of deliverables that simply need to be generated, when that's not the case. If I'm looking to generate deliverables, I can already have a paralegal do all the drafting and research and just put my name on it, because there's nothing that says you need a law license to do legal research or draft documents.
What the client is paying for is for someone to take responsibility for the case, and it would be irresponsible of me to "handle" a case about which I knew nothing. Most of my time is spent reviewing and analyzing facts. Sure, an AI may theoretically be possible that can determine what's relevant and formulate a strategy better than I can, but the AI is not going to be responsible for its output. I'm never going to trust AI with tasks I wouldn't trust to support staff, no matter how much I trust my support staff (and they're great, btw), because the client doesn't want to hear about how it's the paralegal's fault. If I allow AI to do all my work for me, and I go into negotiations missing something, that's a pretty big matzo ball hanging out there. It's not that I'm perfect, or even necessarily better than AI theoretically could be, but the client is ultimately trusting me to make the relevant decisions, and I can't make them without a thorough knowledge of the case. It's the same problem with autonomous vehicles. I said a decade ago that they would never catch on, not because of any technical limitation, but because auto manufacturers aren't going to take responsibility for them. We've already seen this with Tesla being very aggresive in their defense of lawsuits stemming from autopilot. I don't necessarily disagree with Tesla's stance on this as things stand now, but if a vehicle is truly autonomous then an accident isn't caused by negligence on the part of the driver but on products liability on the part of the seller and manufacturer. As long as auto makers take the stance that the owners of vehicles are ultimately responsible for them, true AVs will never exist.
The other big issue is data security. You can tell me all day long about how great Claude, or ChatGTP, or Gemini are, but in the legal world using any of these is a complete nonstarter. Any lawsuit is going to deal with confidential data, and some suits are going to deal with little but confidential data. At the very minimum, we need to use settlement histories to evaluate potential settlement value of a case. Google literally built its business around data harvesting, and the tech sector as a whole doesn't have a stellar reputation for protecting client data. Regardless of whatever "opt out" provisions are allegedly in place, no law firm in their right mind would take the risk of feeding reams of data into a chatbot if there's any risk whatsoever that that information will show up later in a chatbot response. And no, this isn't the same as companies feeding their proprietary code bases into chatbots; the code's confidential status is subject to the discretion of management. An attorney does not have the discretion to reveal confidential information, especially if that information will be harmful to the client in the wrong hands.
This is before you even get to the fact that the current technology is underwhelming even for legal research. It looks good in demos but as soon as you try to use it for anything it proves its inadequacy. For document summarizing, 5,000 pages sounds generous, but it's rare that I'm concerned about finding information in a single document. I said this in a comment last week, but the utility would be more like "search all the depositions we have on file and pull all the ones where a witness testified about X". Well, we have tens of thousands of depositions on file, most in PDF but some in a special format used for court transcriptions. Conservatively assuming 100 pages per depo and 140 words per page, that comes out to something like half a billion tokens of context required, before we even consider that PDFs take more tokens than plain text, and a lot more if they haven't been OCR'd (which most of these haven't). Even the document functions described by the sales rep weren't that good; the example he gave was that if you were searching medical records for mentions of cancer it could broaden the search to include mentions of specific cancers.
I'm going to ask you the same question I asked the other commenter: Do you believe that SPLC leadership are actually hard-right cryptoracists who have been bilking hapless lefties out of their money and used it to fund white supremacist hate groups? Or do you think this was all part of a weird, hare-brained scheme to achieve some ostensibly left wing goal? If you seriously believe that it's the former, and the government can prove that it's the former, then yes, I will agree with you and say that there is at least a decent case for fraud here. But if it's the latter, then it's just a group of people who used questionable tactics and bad judgment,
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