New York sues Sprint for $300 million over alleged tax fraud [updated]

By on April 19, 2012 at 11:40 AM.

New York sues Sprint for $300 million over alleged tax fraud [updated]

New York on Thursday filed a lawsuit against Sprint Nextel Corp looking to collect more than $300 million, Reuters reported. The wireless company is accused of tax fraud for deliberately not collecting or paying more than $100 million in taxes over the past seven years. New York Attorney General Eric Schneiderman filed the complaint in the New York State Supreme Court on Thursday. The tax suit, which is the first filed under the state’s False Claims Act, could require Sprint to pay triple the amount it is accused of underpaying. Since 2002, New York state has required mobile phone companies to collect and pay sales taxes for their mobile services. Schneiderman claims Sprint has underpaid and submitted false records since 2005, however, in an alleged effort to undercut its competition and offer cheaper rate plans.

UPDATE: Sprint has issued a statement, which can be found after the break. More →

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Samsung, LG and others fined $40 million in Korean price-fixing scam

By on March 15, 2012 at 1:30 PM.

Samsung, LG and others fined $40 million in Korean price-fixing scam

Korean regulators on Thursday fined domestic mobile phone manufacturers and carriers 45.3 billion won (roughly $40.2 million) for price-fixing and consumer fraud. According to the Fair Trade Commission, the companies secretly agreed to inflate the prices of cell phones while advertising offers with considerable incentives. The companies’ actions apparently tricked consumers into thinking they were buying a new phone for a bargain. “Companies took advantage of the complicated price setting practice in the mobile telecommunications sector to trick consumers,” an FTC official said. The Korea Times reported that Samsung, LG, Pantech, SK Telecom, KT and LG Uplus have all been find for their role in the scheme. In addition to the fine, the companies have been ordered to release information concerning the incentives they offered consumers, and they have been banned from offering such incentives in the future. SK Telecom was given the largest fine of 20.2 billion won, followed by Samsung with 14.2 billion won and KT at 5.1 billion won. More →

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Analyst charged with insider trading and fraud after leaking Apple sales data

By on February 20, 2012 at 9:45 PM.

Analyst charged with insider trading and fraud after leaking Apple sales data

A research analyst and a former executive who revealed insider information about Apple’s sales have both been charged, reports Reuters. Analyst John Kinnucan on Friday was charged with two counts of securities fraud, two counts of conspiracy and one count of insider trading from a civil case filed by the U.S. Securities and Exchange Commission. Between 2008 and 2010, Kinnucan allegedly paid insiders with cash, trips and other incentives for inside information regarding Apple. Kinnnucan then sold the information to hedge funds for hundreds of thousands of dollars. Separately, former SanDisk executive Don Barnetson pleaded guilty to one count of conspiracy to commit wire fraud and securities fraud. “I conspired with a consultant to provide confidential information with respect to my employer at the time, SanDisk Corp,” Barnetson said. Barnetson could faces up to five years in prison but could get leniency for his “substantial cooperation.” Kinnucan could faces up to 20 years in prison on each of the securities fraud counts and one of the conspiracy counts, and up to five years on the other conspiracy count. More →

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AT&T accused of overcharging iPhone, iPad users for cellular data in latest lawsuit [Updated]

By on May 20, 2011 at 12:23 PM.

AT&T accused of overcharging iPhone, iPad users for cellular data in latest lawsuit [Updated]

An MSNBC investigative report, and related lawsuit, claims that AT&T has “systematically overstated” the data usage of iPhone and iPad customers. Lawyers for the plaintiffs, seeking class action status, hired an independent computer firm to compare the actual amount data used by iPhone and iPad customers with the amount that AT&T bills users for. “Did you find overcharges on every single transaction,” asked MSNBC’s Lisa Myers, speaking with the investigating firm’s representative. “Yes, every single one,” he responded. “Did you ever find an instance where the discrepancy worked to the benefit of the customer,” poses Myers as a follow-up question. “Never,” quipped the representative. “Always an overcharge; never an undercharge.” The study alleges that AT&T overstates customer data usage by 7% to 14% and, in some rarer cases, by up to 300%. To illustrate its point, the firm bought a new AT&T iPhone and line of service, “disabled everything that might trigger data usage,” and let the phone sit untouched for ten days. During that time period, thirty-five different data charges appeared on the virgin phone’s bill. AT&T responded to the report saying that the claims are “without merit” and that applications may auto-update or refresh in the background without a consumer’s knowledge or consent. Whatever the reasoning is for the purported up-charging, we’re sure this isn’t the last you’re going to hear about this one. A video clip of MSNBC’s report is waiting for you after the break.

UPDATE: An official statement from an AT&T spokesperson is after the break. More →

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Microsoft employee charged with stealing over $500,000 from company

By on April 13, 2011 at 10:31 AM.

Microsoft employee charged with stealing over $500,000 from company

Charges have been filed by federal prosecutors in Seattle against a Microsoft employee accused of wire fraud. Robert D. Curry was arrested Tuesday morning and charged with stealing $515,000 from Microsoft using a series of wire transfers sent from Microsoft to Curry’s bank account. According to Curry, the transfers were payments for services rendered but prosecutors contend that Curry provided no such services. According to the charges, Curry created a shell company and used one of Microsoft’s vendors, which was unaware of Curry’s actions, to funnel money into his account between April and November last year. The FBI claims Curry collected a series of fraudulent payments from Microsoft, having misled the company by claiming the payments were being made to Microsoft vendor Pentad Solutions. Prosecutors say Curry used the stolen funds to pay for high-end audio equipment, credit card bills and a ski vacation. More →

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Ex-Apple global supply manager pleads guilty in kickbacks trial

By on March 1, 2011 at 8:01 AM.

Ex-Apple global supply manager pleads guilty in kickbacks trial

Reuters is reporting that former Apple global supply chain manager, Paul Devine, has pled guilty to wire fraud, conspiracy and money laundering in a San Jose, CA federal court. Mr. Devine, who worked for Apple from 2005 to 2010, was accused of taking kickbacks and “using his position to pass confidential information to help suppliers negotiate favorable contracts with Apple.” As part of his plea, Devine forfeits $2.28 million in cash and property. “Mr. Devine is a good man who made a mistake, and now he’s trying to make amends,” said his attorney. Sentencing is set for Monday, June 6th, when Devine will face a maximum sentence of twenty years. A civil lawsuit is also pending.

More →

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Apple iPhone inexplicably unavailable for NYC via online orders

By on December 27, 2009 at 6:54 PM.

Apple iPhone inexplicably unavailable for NYC via online orders

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This one has us scratching our heads. When attempting to order the iPhone for zip codes in Los Angeles, San Francisco and other major cities, everything seems perfectly fine. However, NYC zip codes, more specifically Brooklyn, removes the iPhone as an option for online sales. We called several stores in the NYC area, including one in Brooklyn, and the sales reps said stock was perfectly fine. So we chatted up online sales and they told us it wasn’t available in that area and, as noted by the image below, they couldn’t tell us why: More →

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Belkin responds to allegations of paid reviews

By on January 19, 2009 at 9:32 AM.

Belkin responds to allegations of paid reviews

Allow us to quickly bring you up to speed: The Daily Background did a bit of digging when it came across some ads on Mechanical Turk offering to compensate people for writing positive reviews about Belkin products, as well as up-voting pro-Belkin comments. What did the digging uncover? A Belkin rep on the Business Development / eCommerce team posted the ads. Busted. Now that you have all the background you need, enjoy a snippet from Belkin President Mark Reynoso’s response:

Belkin does not participate in, nor does it endorse, unethical practices like this. We know that people look to online user reviews for unbiased opinions from fellow users and instances like this challenge the implicit trust that is placed in this interaction. We regard our responsibility to our user community as sacred, and we are extremely sorry that this happened.

We want to stress that this is an isolated incident and to re-instill trust with you, we have taken the following courses of action:

- We’ve acted swiftly to remove all associated postings from the Mechanical Turk system.
– We’re working closely with our online channel partners to ensure that any reviews that may have been placed due to these postings have been removed.

Who does crisis control for these guys? Throwing Michael Bayard out to the wolves and trying to pass this off as the actions of a single employee is definitely not the way to go. We only hope that Bayard doesn’t become more of a scapegoat here – the odds are fairly good that he had management’s approval for this ‘campaign’ as you can be sure he wasn’t reimbursing participants out of his pocket. Either way, Bayard is going to have a pretty big stain on his resume as a result of this scandal. Lucky for him, some crazy bongo drummer still holds the top few spots on a Google search with his name.

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