The Con Artist, The Sting, And Google's Millions

[engine]

The Con Artist, The Sting, And Google's Millions [online.wsj.com]

Wearing leg irons and guarded by federal agents, David Whitaker posed as an agent for online drug dealers in dozens of recorded phone calls and email exchanges with Google sales executives, spending $200,000 in government money for ads selling narcotics, steroids and other controlled substances.

Over four months in 2009, Mr. Whitaker, a federal prisoner and convicted con artist, was the lead actor in a government sting targeting Google Inc. that yielded one of the largest business forfeitures in U.S. history.

The government built its criminal case against Google using money, aliases and fake companies—tactics often used against drug cartels and other crime syndicates, according to interviews and court documents. Google agreed to pay a $500 million forfeiture last summer in a settlement to avoid prosecution for aiding illegal online pharmaceutical sales.

[Brett_Tabke]

In fairness, it would have been nice to hear Google's real response. Did they think they had legal grounds to display the Ads? Did they think they had Safe Harbor or some other reason for running the Ads. It is hard to believe that Google just willingly ran ads they knew to be illegal.

[Sgt_Kickaxe]

In fairness they knew they were displaying ads for illegal narcotics as the sting demonstrates, and turned a blind eye. Why doesn't matter, the crime was commited and they were LUCKY to be allowed to forfeit $500 million instead of face prosecution.

I don't think the Google name will merrit that kind of forgiveness moving forward, unless of course they have deep government secrets to keep hidden. All that personal data they collect from various services, and what they just take (think wifi networks of unsuspecting people's homes etc), is in the hands of a company who would do this kind of thing and that's a real danger, to all of us imo.

I'm sorry but I do not trust a company who does this kind of thing with my personal information any more than I would ever hand it over to a typical drug cartel, I'm not alone. I do see what you're suggesting Brett and it is hard to fathom but...

In an important shift, the settlement "signals that, where evidence can be developed that a search engine knowingly and actively assisted advertisers to promote improper conduct, the search engine can be held accountable as an accomplice," according to Peter Neronha, the lead prosecutor.

The prosecutor had them dead bang. (emphasis in quote mine)

[Marshall]

Blinded by $$

And in legal parlance, ignorance to no excuse. But in all fairness to Google, you cannot tell me that facebook and similar companies are not doing the same thing. I have looked at a lot of their ads and many are dripping with the word fraud. However, in some cases, the schemes are so creative and deceptive, one has to really dig to find out it is a scam (though there is one on fb that is blatantly obvious I do not understand how fb does not see it). Couple that with greed and people's gullibility, and that is why they succeed.

I have this email from Nigeria... :)

Marshall

[shallow]

But in all fairness to Google, you cannot tell me that facebook and similar companies are not doing the same thing.

But, if the allegations are true, Google got caught. It's irrelevant that Facebook and similar companies may be doing the same thing. Maybe, and rightfully, the others will eventually get caught too.

Illegal is illegal, right?!

[Tourz]

Shows the long arm of the US pharmaceutical cartel. You should see how they treat American seniors returning from Canada when they suspect that they visited a pharmacy during their trip north.

[mhansen]

Wow... they should have just closed Google down, taken their website from the registrar, and sent them a message via email, that they were found to be in violated one or more of the US laws.

Nothing but net...

[Marshall]

Illegal is illegal, right?!

There are many who believe it is only illegal IF you are caught, that is the problem. I will go out on a limb and say it is more a problem with morality than legality. Many years ago I was given advice from an old (as in duration of friendship and her age):

"Avoid the appearance of evil."

You would be surprised how many problems you avoid following this simple logic.

Marshall

[outland88]

Google had every opportunity to tell its side of the story and proclaim innocence but chose to make a payoff to the government to protect its elitist Wall Street types. Google people like every drug lord around saw the illicit money to be made in the drug traffic and their mouth watered.

Do you think it is coincidental that many see their rankings back this month and there was an 8% drop in Google Adwords revenues. I think corruption runs through every vein of that company.

[jimbeetle]

Shows the long arm of the US pharmaceutical cartel. You should see how they treat American seniors returning from Canada when they suspect that they visited a pharmacy during their trip north.

Apparently you didn't bother to read the article. This has nothing to do with Big Pharma or U.S. seniors trying to afford their blood pressure meds.

[BeeDeeDubbleU]

It is hard to believe that Google just willingly ran ads they knew to be illegal.

Do you honestly think, they did not know this was going on, I mean really?

[Demaestro]

With any company the size of Google you have to be fair and ask yourself was this a decision sanctioned by the companies top decision makers or was the decision of some employees more concerned with bonuses or making quotas?

I have a hard time believing that the top Google decision makers were sitting around in a room and saying "Let's risk breaking the law and offer ads for illegal drugs for $200,000"

I guess it is possible but I think it is more likely that this was a department head being a moron. I agree that in either case the person who made the decision knew they were in the wrong. I just can't see the real shot callers doing it.

[seoskunk]

Rome is burning........

[Lenny2]

@Mhansen

A more Google-like punishment would be to redirect 75% of Google's traffic to other search engines... and watch as they slowly bleed out, letting go of all of your staff and seeing your competitors eat your lunch... and then to put out press-releases that say: "notice that the web is no longer selling illicit drugs..." and another that say's: "Google: Somewhere, somehow we've determined that you have done something... fix that, and you MAY get your traffic back... when we randomly choose... maybe..."

[Whitey]

Irrespective of the story, it goes to show that Google's power is upsetting a lot of folks who are highly motivated to bring them into "balance" . But there's a lot on the other side of the equation to.

My personal feeling is that a business with this much continual legal interference is going to find it hard to function eventually. They must engage an army of lawyers and negotiators with everything that's going on.

[garyv]

Google shut me down for selling clickbank products - and I spent way more than that. I have a hard time believing that more than a few people working at Google even saw the ads. $200,000 is like a grain of sand on the beach compared to what adwords brings in.

I think someone w/ some political muscle was probably strong-arming them with threats of prosecution.

I know this is tinfoil hat kind of stuff, but there are some obvious direct ties between facebook and the whitehouse. And this stinks of a Chicago style take-down to me.

[tangor]

Google hate or Google pay-back is not constructive to the conversation. It's not personal unless "you", a rhetorical "you", were part of the problem selling illegal products and sadly miss your income.

No doubt a poor business decision was made and was linked to higher levels of G admin, submitted in seal during the settlement process. From that point we go forth. For some haters that was just a $500m slap on the wrist, for G it was a wake up. The next step, which might take just as long and be just as difficult will be trademark/copyright/counterfeit...

Making no judgments, merely observing what we all know: there's a lot of bad actors---most of them "us" (that's the pronoun, not United States) ordinary webmasters---attempting to make hay while the sun shines. The "sun" in this case is Google's advertising model which has no apparent ability to deal with fraud. And since Google was first to actually make advertising possible on the web and created the "black box", etc. they will be the first to feel the hammer.

Unless you want to don the tin foil hat and say it is international (pick your nations) attacks against capitalism and collect money, too, to continue that fight or organized crime (a given) or Divine Retribution because "my" website was dissed. :) (that's a smile... humor, satire, a funny) --- and maybe not so funny.

PS. Not suggesting anyone here is involved with fraud!

[Chico_Loco]

There are so many esoteric and obscure regulations in this country now that we're all probably doing something illegal and don't even know it! Farting in public might be construed as terrorism, and picking your nose in public might be interpreted as indecent exposure. Who knows!

OK, so prescription drugs is a bit more dramatic and obvious - but the point is that more laws and more regulation continue to make it progressively more difficult for all of us on here to do business... Google included.

So people wanted to get their prescription drugs imported for cheaper from Canada because prescription drug prices here in the US are absurd. Big deal! The government should be seizing the illegal imports or (for US based pharmacies) just making sure that prescriptions are being verified before being filled.

And that the government actually did all of this stuff with David Whitaker must be entrapment, no? Oh but that's business as usual in this country now... The government looking to get more people into the guilty box and extort more money.

/end rant... sorry!

[sobole]

Well, there goes Google's number 1 page rank with the gov..

[graeme_p]

@jimbeetle it is about big just that: its about people buying prescription drugs where they cheapest.

@Chico_Loco, the use of the sort of measures used against violent criminals for things they were not usually used for is becoming common - think of the Raj Rajaratnam case (in that case because they wanted to get some "Wall Street" but not TOO important).

[CainIV]

Money talks and BS walks.

Definitely provided what the users wanted, which is their mantra, n'est pas?

[kidder]

Irrespective of the story, it goes to show that Google's power is upsetting a lot of folks who are highly motivated to bring them into "balance"

Yep when they are setting up sting operations in this manner it speaks volumes. I wonder who did not use Google today after reading this? Probably very few...

[danwhitehouse]

Where does the $500m actually go? Into the treasury? Or does it sit somewhere as evidence?

[frontpage]

Google's Larry Page in on the fraud according to the Feds.

When the sting began in 2009, Google had in place policies designed to block illicit pharmaceutical advertising. Whitaker's orders were initially rejected under those policies. But Whitaker says Google sales reps helped him tweak his sites to skirt the rules.

According to federal prosecutor Peter Neronha, internal documents obtained by investigators demonstrate that senior Google executives, including now-CEO Larry Page, "knew what was going on." Before she left for Facebook in 2008, Sheryl Sandberg reportedly raised concerns about the sale of illicit pharmaceutical ads.

[pcmag.com...]

[ponyboy96]

Somebody at Google should be in jail for this. If that was you or me, we would be serving time for knowingly allowing illegal activities to occur and profiting from it. I would say that they are akin to drug dealers here.

As my dad used to say, "there are 2 justice systems. 1 for the rich and powerful and the other for regular people."

...just sayin

[MichaelBluejay]

Funny that nobody has quoted Google's old slogan yet:

"Don't be evil."

Remember that one?

[Sgt_Kickaxe]

Google hate or Google pay-back is not constructive to the conversation. It's not personal unless "you", a rhetorical "you", were part of the problem selling illegal products and sadly miss your income.

I disagree Tangor - it's personal when this company holds my private information. Their actions create ripples that may very well impact me personally. Had they been shut down for what they did, or forced to pay 5 billion instead of 500 million, there would have been an impact in their bottom line which affects all their services. Perhaps they were forced to hand over account data for all adwords customers, in which case my information is traveling. There is also the trust factor... Nobody wants to deal with a company in legal trouble, besides the lawyers anyway.

internal documents obtained by investigators demonstrate that senior Google executives, including now-CEO Larry Page, "knew what was going on.

Did they take steps to profit or to protect themselves (and thus me since I deal with them)? They sold out and got caught. Will a price increase in adwords be the result? An exodus of advertisers perhaps causing lower adsense click returns? Criminal charges are not trivial.

[Edge]

It is hard to believe that Google just willingly ran ads they knew to be illegal.

I corporate terms I agree, however companies are made up of many people and not everybody is cut from the same ethics cloth.

The simple of the issue is that the employee(s) involved may have acted outside of corporate policy in pursuit of commissions or other. Regardless, Google as a corporation is responsible for their actions.

[Tourz]

Apparently you didn't bother to read the article. This has nothing to do with Big Pharma or U.S. seniors trying to afford their blood pressure meds.

You are partly right, I stopped reading half way through in disgust. It's all about Big Pharma. They want to control who gets to profit from "narcotics, steroids and other controlled substances" and have lobbied to have these policies enforced. Now you have fraudulent sting operations against google, militant border agents checking grandma, and the 'war on drugs'. They do it in name of "protecting the people".. whatever.

It doesn't help the people, the people are looking for the products.

Definitely provided what the users wanted, which is their mantra, n'est pas?

Si. Google shouldn't be penalized for being a conduit of information, they have sufficient guidelines to protect the unwary. But they are being penalized because the Feds are in bed with Big Pharma.

The hollywood/sopa fiasco is more of the same. It doesn't serve the people.

the forfeiture paid by Google represented not just the money it made from the ads, but also the revenue collected by illegal pharmacies through Google-related sales.

Cash grab. They'll use it for the next war. I'm sure the lawyers got a nice cut too.