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Tag: Fraud

  • Failure of Silicon Valley Bank Could Reveal Surprising Extent of Corporate Fraud | Entrepreneur

    Failure of Silicon Valley Bank Could Reveal Surprising Extent of Corporate Fraud | Entrepreneur

    Opinions expressed by Entrepreneur contributors are their own.

    The high-profile and sudden failure of Silicon Valley Bank — which has been accused of hiding huge losses from its depositors, investors, and regulators — highlights the dangers of corporate fraud for our financial system. It confirms the kind of problems highlighted by a recent study published in the Journal of Financial Economics, estimating that only one-third of corporate frauds are detected, with an average of 10% of large publicly traded firms committing securities fraud every year. This means that the true extent of corporate fraud is much larger than what is currently being reported. The study also estimates that corporate fraud destroys 1.6% of equity value each year, which equals $830 billion in 2021.

    These findings indicate a clear need for better risk management and oversight to address corporate fraud. As a highly experienced expert in this topic, I have consulted for many companies on how to mitigate the risk of fraud and the impact it can have on their business. In this article, I will share some insights and best practices for addressing corporate fraud, as well as some real-world examples of how this issue has affected companies.

    Related: ‘I Never Thought It Could Happen to Me’ — How to Avoid Business Fraud

    Real-world examples of corporate fraud

    While the situation with Silicon Valley Bank is still under investigation, we have plenty of well-known examples of fraud. FTX, a trading platform for crypto investors, was accused by the U.S. Securities and Exchange Commission of defrauding its investors by steering money from the company into another venture between 2019 and 2022. The company’s majority owner, Sam Bankman-Fried, allegedly used the cash to purchase homes in the Bahamas, invest in other companies, and fund favored political causes. When crypto assets took a significant plunge in 2022, the cash spigot went dry at both FTX and the other venture, leading to federal prosecutors stepping in to issue fraud charges and bankruptcy for the company.

    Theranos — initially heralded as an innovative healthcare technology company — was exposed as having unworkable technology in 2015. Federal and state regulators filed fraud charges against the company, which dissolved in 2018. The company’s founder, Elizabeth Holmes, and former president, Ramesh “Sunny” Balwani, were both found guilty and sentenced to prison in 2022. Top-tier investors such as Rupert Murdoch, Carlos Slim, and Betsy DeVos lost millions from Theranos investments, with little hope of getting the money back.

    Wirecard, an electronic payments firm based in Munich, Germany, faced the biggest corporate fraud case in German history in 2022, with former CEO Markus Braun and two senior executives facing multiple years in prison if convicted. Another senior executive, Jan Marsalek, is on the run and is reportedly hiding out in Russia. Wirecard declared insolvency in 2020 after authorities discovered $1.9 billion was missing from the company’s accounts, amid allegations from German regulators that the money never existed at all.

    Luckin Coffee, a China-based company, was embroiled in a legal quagmire stemming from a 2020 fake revenue scandal. Internal financial analysts discovered the company’s growth was artificially inflated due to bulk sales to businesses linked to the company’s chairman, and management had fraudulently engineered the purchase of raw materials from suppliers. When these investigations became public, investors fled and the company’s share price slid. With the company delisted from Nasdaq and the senior executives involved in the scandal out of the picture, Luckin Coffee is now trading over the counter.

    These are just several examples of serious fraud in the news. However, I’ve seen fraud occur in many smaller and mid-size companies as well. In fact, such occurrences in my experience are more common at smaller companies, which have less rigorous risk management and oversight policies.

    Related: Keep Your Business Fraud-Free With These 3 Steps

    Addressing corporate fraud through risk management and oversight

    To mitigate the risk of corporate fraud, companies — big and small — need to have strong risk management and oversight systems in place. This includes having clear policies and procedures for detecting and preventing fraud, as well as regular training and education for employees on how to recognize and report fraud.

    One important aspect of risk management is having an effective internal control system. This includes having a system of checks and balances in place to prevent fraud from occurring in the first place, as well as systems for detecting and investigating fraud if it does occur. This can include measures such as separating duties among employees, implementing segregation of duties and conducting regular internal audits.

    Another important aspect of risk management is having an effective compliance program. This includes having policies and procedures in place to ensure that the company is in compliance with relevant laws and regulations, as well as having a system in place for identifying and reporting any potential violations.

    Addressing cognitive biases that facilitate corporate fraud

    Cognitive biases can also play a role in corporate fraud, as they can lead individuals to make irrational decisions and overlook potential red flags. For example, confirmation bias can lead individuals to only pay attention to information that confirms their preconceived notions, while ignoring information that contradicts them. This can make it difficult for individuals to recognize and report fraud. Theranos might be an example: despite the lack of evidence for their technology working, stakeholders persistently refused to see this reality.

    The sunk cost fallacy is another cognitive bias that can lead to fraud. This occurs when individuals continue to invest in a project or venture, even if it is no longer viable because they have already invested so much time and resources into it. This can lead to individuals engaging in fraudulent activities in order to justify their previous investments. The situation with FTX falls into this category, with Sam Bankman-Fried refusing to accept losses at his crypto trading firm Alameda Research, and using customer funding from the FTX exchange to cover these losses.

    To mitigate the impact of cognitive biases on corporate fraud, companies need to be aware of these biases and take steps to counteract them. This can include regular training and education for employees on how to recognize and overcome cognitive biases, as well as implementing systems and processes that help to counteract these biases.

    For example, companies can implement peer review systems where multiple individuals review and approve financial transactions, rather than relying on a single individual. This can help to counteract the confirmation bias, as multiple individuals will be looking at the same information and can point out any potential red flags.

    Another example is implementing an independent fraud detection and investigation team within the company. This team can be responsible for reviewing financial transactions and identifying potential fraud. This can help to counteract the sunk cost fallacy, as the team will not be invested in the project or venture and can provide an objective assessment of its viability.

    Related: Yes, You Are Getting Scammed. How to Combat Fraud and Increase Efficiency

    Conclusion

    Corporate fraud is a serious issue that affects companies of all sizes and industries. A recent study published in the Journal of Financial Economics estimates that only one-third of corporate frauds are detected, with an average of 10% of large publicly traded firms committing securities fraud every year. This highlights the need for better risk management and oversight to address corporate fraud.

    Companies can mitigate the risk of fraud by having strong risk management and oversight systems in place, including an effective internal control system and compliance program. They also need to be aware of cognitive biases and take steps to counteract them, such as implementing peer review systems and independent fraud detection and investigation teams.

    As a highly experienced expert in this topic, I have consulted for many companies on how to mitigate the risk of fraud and the impact it can have on their business. I strongly recommend that leaders of companies take the necessary steps to address corporate fraud, in order to protect their bottom line and reputation.

    Gleb Tsipursky

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  • Ex-Theranos exec set to begin prison sentence in SoCal

    Ex-Theranos exec set to begin prison sentence in SoCal

    Former Theranos executive Ramesh ”“Sunny” Balwani is scheduled to begin his nearly 13-year prison sentence Thursday afternoon for a blood-testing hoax he engineered with his former boss and lover, Elizabeth Holmes, who is still fighting to remain free …

    ByMICHAEL LIEDTKE AP Technology Writer

    Former Theranos executive Ramesh “”Sunny” Balwani is scheduled to begin his nearly 13-year prison sentence Thursday afternoon for a blood-testing hoax he engineered with his former boss and lover, Elizabeth Holmes, who is still fighting to remain free while she appeals her conviction.

    Balwani, 57, has until 2 p.m. PDT Thursday to surrender to authorities after a federal judge denied his bid to remain free while appealing his conviction on 12 counts of fraud and conspiracy in a ruling issued last week.

    Holmes, 39, and her lawyers will have their chance to try to persuade to U.S. District Judge Edward Davila to allow her to delay the scheduled April 27 start of her more than 11-year prison sentence during a hearing set for Friday morning in San Jose, California.

    It will mark Holmes’ first appearance in court since giving birth to the child she was carrying at the time of her Nov. 18 sentencing on four counts of fraud and conspiracy.

    In a change of plans, Balwani will serve his prison term near a Southern California harbor instead of the Atlanta facility that he had been initially assigned, according to a disclosure filed late Wednesday by his lawyer, Jeffrey Coopersmith.

    The revision means Balwani will be staying in the Terminal Island prison located in San Pedro, California, located about 30 miles (48 kilometers) from downtown Los Angeles. The prison has incarcerated several other prominent figures, including gangster Al Capone in the 1930s, notorious murderer Charles Manson for an auto theft in the 1950s and LSD evangelist Timothy Leary in the 1970s.

    In a filing last week, Coopersmith had asked Davila for additional time to appeal the Bureau of Prisons’ decision to send him to an Atlanta prison plagued by allegations of widespread of misconduct and other abuses. Davila had recommended Balwani be sent to a Lompoc prison in Santa Barbara County located about 250 miles (400 kilometers) from the San Jose courtroom where his trial took place.

    Although they had separate trials, Holmes and Balwani were accused of essentially the same crimes centered on a ruse touting Theranos’ blood-testing system as a revolutionary breakthrough in health care. The claims helped the company become a Silicon Valley sensation that raised nearly $1 billion from investors.

    But its technology never came close to working like Holmes and Balwani boasted, resulting in Theranos’ scandalous collapse and a criminal case that shined a bright light on Silicon Valley greed and hubris.

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  • Chinese businessman arrested in $1 billion fraud conspiracy

    Chinese businessman arrested in $1 billion fraud conspiracy

    NEW YORK — A business tycoon long sought by the government of China and known for cultivating ties to Trump administration figures including Steve Bannon was arrested Wednesday in New York on charges that he oversaw a $1 billion fraud conspiracy.

    Guo Wengui, 54, and his financier, Kin Ming Je, faced an indictment in federal court in Manhattan charging them with various crimes, including wire, securities and bank fraud. Guo was charged first in court papers under the name Ho Wan Kwok.

    Federal prosecutors said the indictment stemmed from a complex scheme in which the defendants lied to hundreds of thousands of online followers in the United States and around the world before misappropriating hundreds of millions of dollars.

    Je, 55, has not been arrested. Guo was expected to appear in court Wednesday. His attorney did not immediately comment.

    Guo, also known as Miles Kwok, was one of China’s richest businesspeople, with a fortune estimated by Forbes magazine at $1.1 billion in 2015.

    Guo left China in 2014 during an anti-corruption crackdown led by President Xi Jinping that ensnared people close to Guo, including a top intelligence official. Chinese authorities have accused Guo of rape, kidnapping, bribery and other offenses.

    U.S. Attorney Damian Williams said in a release that Guo was charged with “lining his pockets with the money he stole, including buying himself, and his close relatives, a 50,000 square foot mansion, a $3.5 million Ferrari, and even two $36,000 mattresses, and financing a $37 million luxury yacht.”

    It was on Guo’s 150-foot (45-meter) yacht that former Bannon, President Donald Trump’s onetime chief strategist, was once arrested on federal charges. Just before he left office, Trump made the case against Bannon dissolve with a pardon.

    Authorities accuse Guo of lying to his victims, promising them outsized returns if they invested or fed money to his media company, GTV Media Group Inc., his so-called Himalaya Farm Alliance, G’CLUBS, and the Himalaya Exchange.

    Williams said that, between September 2022 and this month, the U.S. government has seized approximately $634 million from 21 bank accounts, representing the majority of the proceeds of Guo’s alleged fraud.

    He said law enforcement on Wednesday also seized assets that were purchased with proceeds of the alleged fraud, including a Lamborghini Aventador SVJ Roadster.

    The Securities and Exchange Commission also brought civil charges against Guo on Wednesday, saying in a Manhattan federal court filing that Guo led others in committing multiple frauds since April 2020.

    The SEC said Guo targeted retail investors through online and social media posts and videos, deceiving them with lies such as a claim that a crypto asset security called “H-Coin” was backed by gold reserves.

    The SEC said Guo and Je raised about $452 million through an unregistered offering of GTV common stock from April 2020 to June 2020, claiming they would “build the most popular and safest social media and transaction platform independent of the Chinese government’s censorship and monitoring, allowing the people of China and the world to realize the freedom of speech and trade.”

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  • Records in Fox defamation case show pressures on reporters

    Records in Fox defamation case show pressures on reporters

    NEW YORK — It wasn’t critics, political foes or their bosses that united Fox News stars Tucker Carlson, Sean Hannity and Laura Ingraham when they gathered via text message for a gripe session shortly after the 2020 election.

    It was their own network’s news division.

    “They’re pathetic,” Carlson wrote.

    “THEY AREN’T SMART,” Ingraham emphasized.

    “What news have they broken the last four years?” Hannity asked.

    The Nov. 13, 2020, conversation was included among thousands of pages of recently released documents related to Dominion Voting Systems’ $1.6 billion defamation lawsuit against Fox for its post-election reporting. Like much of what was uncovered, the exchange ultimately may have little bearing on whether Fox will be judged guilty of libel.

    Instead, the material offers insight into how Fox’s stars and leadership responded at a time of high anxiety and how giving its audience what it wanted to hear took precedence over reporting uncomfortable truths.

    The revelations have bolstered critics who say Fox News Channel should be considered a propaganda network rather than a news outlet.

    Yet while Fox’s news side has seen the prominent defections of Shepard Smith and Chris Wallace in recent years, it still employs many respected journalists — such as Jennifer Griffin, Greg Palkot, John Roberts, Shannon Bream, Bryan Llenas, Jacqui Heinrich and Chad Pergram.

    They’re left to wonder whether the raft of recent stories about Fox — from the Dominion documents and from Carlson’s use of U.S. Capitol security video to craft his own narrative of the Jan. 6, 2021, attack — will make their jobs more difficult. Will fewer people want to work with them because of the dominance of Fox’s opinion side?

    Fox says it has increased its investment in journalism by more than 50% under Suzanne Scott, Fox News Media CEO, and usually leads its rivals in ratings during major breaking news stories.

    “We are incredibly proud of our team of journalists who continue to deliver breaking news from around the world and will continue to fight for the preservation of the First Amendment,” the network said in a statement.

    The post-election period in 2020 offered a stern test. The network’s election night declaration that Joe Biden had won in Arizona, ahead of any other news organization, infuriated its viewers. Many were sympathetic to former President Donald Trump’s claims of significant voter fraud even if, then as now, there has been no evidence of that.

    After she covered a Nov. 19 news conference with Trump lawyer Rudolph Giuliani, then-Fox reporter Kristin Fisher said her boss in Washington, Bryan Boughton, called to say he was unhappy with her report. She said she was told she needed to do a better job of “respecting our audience,” according to documents released in the case.

    “I believed that I was respecting our audience by telling them the truth,” Fisher, who now works at CNN, testified in a deposition on the Dominion case.

    She later claimed that airtime was taken away from her in retaliation.

    Heinrich drew the ire of Fox opinion hosts by tweeting a fact-check on some of Trump’s claims. In a text message, Carlson profanely said she should be fired.

    “She has serious nerve doing this,” Fox publicity chief Irena Briganti said in an internal memo released among the court papers, “and if this gets picked up, viewers are going to be further disgusted. Her job is to report, not to taunt the president of the United States.”

    During a Nov. 14 text conversation, Scott and Lachlan Murdoch, the executive chairman and CEO of Fox Corp., talked about how a Trump rally should be covered on the network.

    “News guys have to be careful how they cover this rally,” Murdoch said. “So far some of the side comments have been slightly anti, and they shouldn’t be. The narrative should be this huge celebration of the president.”

    In another message, he called Fox correspondent Leland Vittert “smug and obnoxious.” Vittert now works at NewsNation.

    A week after the election, a Fox Corp. senior executive, Raj Shah, said in a memo that “bold, clear and decisive action is needed for us to begin to regain the trust that we’re losing with our core audience.”

    Dominion argues, as part of its lawsuit, that nervousness about what its viewers wanted led Fox to air allegations that the voting machine company was complicit in fraud that hurt Trump, even though many people at the network didn’t believe them. In his own deposition, Fox founder Rupert Murdoch agreed the election had been fair and it “was not stolen.”

    Fox counters that it was airing newsworthy charges made by the president and his followers.

    Concern over the Arizona backlash spread to the news division, according to court documents. Fox News anchor Bret Baier said defending the call made him uncomfortable and suggested instead awarding the state to Trump. Roberts also sent a memo saying he’d been getting “major heat” over the decision.

    In 2012, Fox stood strongly behind its decision desk when network commentator and veteran GOP aide Karl Rove questioned its correct call that Barack Obama had won in Ohio, essentially assuring him of reelection against Republican Mitt Romney.

    In a memorable television moment, Megyn Kelly marched down the hall to hear the decision desk’s explanation for why the call was made.

    Eight years later, signs of timidity at Fox appeared in the days after its Arizona call. When other news organizations ultimately declared Biden the president-elect on the Saturday morning after the election, Fox waited about 15 minutes.

    On Nov. 20, 2020, Rupert Murdoch discussed with Scott in a private memo whether two Washington executives key to the Arizona race call should be fired, saying it would send a “big message” to Trump allies. The executives, Bill Sammon and Chris Stirewalt, lost their jobs two months later.

    A Fox spokeswoman characterized the discussions about the Arizona call as part of a typical postmortem that happens after big news events. Despite “intense scrutiny,” Fox stood by its call. Even though Sammon and Stirewalt were forced out, Fox kept consultant Arnon Mishkin, who has run its decisions desk, for the 2024 election.

    Scott, answerable to corporate bosses, noted in her deposition that she considered herself a television producer.

    “I don’t consider myself a journalist,” said the head of Fox News Media. “I consider myself a TV executive. I hire journalists. I hire news people.”

    Longtime Fox News Channel chief Roger Ailes wasn’t a journalist, either — his background was in politics. To some longtime Fox watchers, though, Ailes recognized that Fox’s opinion side drew strength from a solid news side, and he kept stronger barriers between the two.

    Some of the information revealed in recent weeks illustrates how, in many ways, Fox has become less of an agenda-setter than an outlet that follows its audience, said Nicole Hemmer, a Vanderbilt University professor and author of “Partisans: The Conservative Revolutionaries Who Remade American Politics in the 1990s.”

    To date, no one in Fox management has talked about the Dominion case to its journalists, leaving some wondering whether there is anyone standing up for them, said one Fox journalist, who spoke on condition of anonymity for fear of professional retribution.

    “There is some fine journalism still being done at Fox News today,” said Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania. She cited the transition of “Fox News Sunday” from Wallace to Bream.

    The fallout from the Dominion case, however, leaves open the question of whether Fox journalists will be allowed to do their jobs unconstrained by other forces, she said.

    “It would be useful for Fox News, at this point, to make a clear statement that the news division has complete and total autonomy and that a clear line is drawn between it and the rest of Fox,” Jamieson said.

    ____

    Associated Press writers Christina A. Cassidy in Atlanta, Jonathan J. Cooper in Phoenix, Gary Fields in Washington, Jennifer Peltz in New York and Nicholas Riccardi in Denver contributed to this report.

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  • Records in Fox defamation case show pressures on reporters

    Records in Fox defamation case show pressures on reporters

    NEW YORK — It wasn’t critics, political foes or their bosses that united Fox News stars Tucker Carlson, Sean Hannity and Laura Ingraham when they gathered via text message for a gripe session shortly after the 2020 election.

    It was their own network’s news division.

    “They’re pathetic,” Carlson wrote.

    “THEY AREN’T SMART,” Ingraham emphasized.

    “What news have they broken the last four years?” Hannity asked.

    The Nov. 13, 2020, conversation was included among thousands of pages of recently released documents related to Dominion Voting Systems’ $1.6 billion defamation lawsuit against Fox for its post-election reporting. Like much of what was uncovered, the exchange ultimately may have little bearing on whether Fox will be judged guilty of libel.

    Instead, the material offers insight into how Fox’s stars and leadership responded at a time of high anxiety and how giving its audience what it wanted to hear took precedence over reporting uncomfortable truths.

    The revelations have bolstered critics who say Fox News Channel should be considered a propaganda network rather than a news outlet.

    Yet while Fox’s news side has seen the prominent defections of Shepard Smith and Chris Wallace in recent years, it still employs many respected journalists — such as Jennifer Griffin, Greg Palkot, John Roberts, Shannon Bream, Bryan Llenas, Jacqui Heinrich and Chad Pergram.

    They’re left to wonder whether the raft of recent stories about Fox — from the Dominion documents and from Carlson’s use of U.S. Capitol security video to craft his own narrative of the Jan. 6, 2021, attack — will make their jobs more difficult. Will fewer people want to work with them because of the dominance of Fox’s opinion side?

    Fox says it has increased its investment in journalism by more than 50% under Suzanne Scott, Fox News Media CEO, and usually leads its rivals in ratings during major breaking news stories.

    “We are incredibly proud of our team of journalists who continue to deliver breaking news from around the world and will continue to fight for the preservation of the First Amendment,” the network said in a statement.

    The post-election period in 2020 offered a stern test. The network’s election night declaration that Joe Biden had won in Arizona, ahead of any other news organization, infuriated its viewers. Many were sympathetic to former President Donald Trump’s claims of significant voter fraud even if, then as now, there has been no evidence of that.

    After she covered a Nov. 19 news conference with Trump lawyer Rudolph Giuliani, then-Fox reporter Kristin Fisher said her boss in Washington, Bryan Boughton, called to say he was unhappy with her report. She said she was told she needed to do a better job of “respecting our audience,” according to documents released in the case.

    “I believed that I was respecting our audience by telling them the truth,” Fisher, who now works at CNN, testified in a deposition on the Dominion case.

    She later claimed that airtime was taken away from her in retaliation.

    Heinrich drew the ire of Fox opinion hosts by tweeting a fact-check on some of Trump’s claims. In a text message, Carlson profanely said she should be fired.

    “She has serious nerve doing this,” Fox publicity chief Irena Briganti said in an internal memo released among the court papers, “and if this gets picked up, viewers are going to be further disgusted. Her job is to report, not to taunt the president of the United States.”

    During a Nov. 14 text conversation, Scott and Lachlan Murdoch, the executive chairman and CEO of Fox Corp., talked about how a Trump rally should be covered on the network.

    “News guys have to be careful how they cover this rally,” Murdoch said. “So far some of the side comments have been slightly anti, and they shouldn’t be. The narrative should be this huge celebration of the president.”

    In another message, he called Fox correspondent Leland Vittert “smug and obnoxious.” Vittert now works at NewsNation.

    A week after the election, a Fox Corp. senior executive, Raj Shah, said in a memo that “bold, clear and decisive action is needed for us to begin to regain the trust that we’re losing with our core audience.”

    Dominion argues, as part of its lawsuit, that nervousness about what its viewers wanted led Fox to air allegations that the voting machine company was complicit in fraud that hurt Trump, even though many people at the network didn’t believe them. In his own deposition, Fox founder Rupert Murdoch agreed the election had been fair and it “was not stolen.”

    Fox counters that it was airing newsworthy charges made by the president and his followers.

    Concern over the Arizona backlash spread to the news division, according to court documents. Fox News anchor Bret Baier said defending the call made him uncomfortable and suggested instead awarding the state to Trump. Roberts also sent a memo saying he’d been getting “major heat” over the decision.

    In 2012, Fox stood strongly behind its decision desk when network commentator and veteran GOP aide Karl Rove questioned its correct call that Barack Obama had won in Ohio, essentially assuring him of reelection against Republican Mitt Romney.

    In a memorable television moment, Megyn Kelly marched down the hall to hear the decision desk’s explanation for why the call was made.

    Eight years later, signs of timidity at Fox appeared in the days after its Arizona call. When other news organizations ultimately declared Biden the president-elect on the Saturday morning after the election, Fox waited about 15 minutes.

    On Nov. 20, 2020, Rupert Murdoch discussed with Scott in a private memo whether two Washington executives key to the Arizona race call should be fired, saying it would send a “big message” to Trump allies. The executives, Bill Sammon and Chris Stirewalt, lost their jobs two months later.

    A Fox spokeswoman characterized the discussions about the Arizona call as part of a typical postmortem that happens after big news events. Despite “intense scrutiny,” Fox stood by its call. Even though Sammon and Stirewalt were forced out, Fox kept consultant Arnon Mishkin, who has run its decisions desk, for the 2024 election.

    Scott, answerable to corporate bosses, noted in her deposition that she considered herself a television producer.

    “I don’t consider myself a journalist,” said the head of Fox News Media. “I consider myself a TV executive. I hire journalists. I hire news people.”

    Longtime Fox News Channel chief Roger Ailes wasn’t a journalist, either — his background was in politics. To some longtime Fox watchers, though, Ailes recognized that Fox’s opinion side drew strength from a solid news side, and he kept stronger barriers between the two.

    Some of the information revealed in recent weeks illustrates how, in many ways, Fox has become less of an agenda-setter than an outlet that follows its audience, said Nicole Hemmer, a Vanderbilt University professor and author of “Partisans: The Conservative Revolutionaries Who Remade American Politics in the 1990s.”

    To date, no one in Fox management has talked about the Dominion case to its journalists, leaving some wondering whether there is anyone standing up for them, said one Fox journalist, who spoke on condition of anonymity for fear of professional retribution.

    “There is some fine journalism still being done at Fox News today,” said Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania. She cited the transition of “Fox News Sunday” from Wallace to Bream.

    The fallout from the Dominion case, however, leaves open the question of whether Fox journalists will be allowed to do their jobs unconstrained by other forces, she said.

    “It would be useful for Fox News, at this point, to make a clear statement that the news division has complete and total autonomy and that a clear line is drawn between it and the rest of Fox,” Jamieson said.

    ____

    Associated Press writers Christina A. Cassidy in Atlanta, Jonathan J. Cooper in Phoenix, Gary Fields in Washington, Jennifer Peltz in New York and Nicholas Riccardi in Denver contributed to this report.

    Source link

  • Records in Fox defamation case show pressures on reporters

    Records in Fox defamation case show pressures on reporters

    NEW YORK — It wasn’t critics, political foes or their bosses that united Fox News stars Tucker Carlson, Sean Hannity and Laura Ingraham when they gathered via text message for a gripe session shortly after the 2020 election.

    It was their own network’s news division.

    “They’re pathetic,” Carlson wrote.

    “THEY AREN’T SMART,” Ingraham emphasized.

    “What news have they broken the last four years?” Hannity asked.

    The Nov. 13, 2020, conversation was included among thousands of pages of recently released documents related to Dominion Voting Systems’ $1.6 billion defamation lawsuit against Fox for its post-election reporting. Like much of what was uncovered, the exchange ultimately may have little bearing on whether Fox will be judged guilty of libel.

    Instead, the material offers insight into how Fox’s stars and leadership responded at a time of high anxiety and how giving its audience what it wanted to hear took precedence over reporting uncomfortable truths.

    The revelations have bolstered critics who say Fox News Channel should be considered a propaganda network rather than a news outlet.

    Yet while Fox’s news side has seen the prominent defections of Shepard Smith and Chris Wallace in recent years, it still employs many respected journalists — such as Jennifer Griffin, Greg Palkot, John Roberts, Shannon Bream, Bryan Llenas, Jacqui Heinrich and Chad Pergram.

    They’re left to wonder whether the raft of recent stories about Fox — from the Dominion documents and from Carlson’s use of U.S. Capitol security video to craft his own narrative of the Jan. 6, 2021, attack — will make their jobs more difficult. Will fewer people want to work with them because of the dominance of Fox’s opinion side?

    Fox says it has increased its investment in journalism by more than 50% under Suzanne Scott, Fox News Media CEO, and usually leads its rivals in ratings during major breaking news stories.

    “We are incredibly proud of our team of journalists who continue to deliver breaking news from around the world and will continue to fight for the preservation of the First Amendment,” the network said in a statement.

    The post-election period in 2020 offered a stern test. The network’s election night declaration that Joe Biden had won in Arizona, ahead of any other news organization, infuriated its viewers. Many were sympathetic to former President Donald Trump’s claims of significant voter fraud even if, then as now, there has been no evidence of that.

    After she covered a Nov. 19 news conference with Trump lawyer Rudolph Giuliani, then-Fox reporter Kristin Fisher said her boss in Washington, Bryan Boughton, called to say he was unhappy with her report. She said she was told she needed to do a better job of “respecting our audience,” according to documents released in the case.

    “I believed that I was respecting our audience by telling them the truth,” Fisher, who now works at CNN, testified in a deposition on the Dominion case.

    She later claimed that airtime was taken away from her in retaliation.

    Heinrich drew the ire of Fox opinion hosts by tweeting a fact-check on some of Trump’s claims. In a text message, Carlson profanely said she should be fired.

    “She has serious nerve doing this,” Fox publicity chief Irena Briganti said in an internal memo released among the court papers, “and if this gets picked up, viewers are going to be further disgusted. Her job is to report, not to taunt the president of the United States.”

    During a Nov. 14 text conversation, Scott and Lachlan Murdoch, the executive chairman and CEO of Fox Corp., talked about how a Trump rally should be covered on the network.

    “News guys have to be careful how they cover this rally,” Murdoch said. “So far some of the side comments have been slightly anti, and they shouldn’t be. The narrative should be this huge celebration of the president.”

    In another message, he called Fox correspondent Leland Vittert “smug and obnoxious.” Vittert now works at NewsNation.

    A week after the election, a Fox Corp. senior executive, Raj Shah, said in a memo that “bold, clear and decisive action is needed for us to begin to regain the trust that we’re losing with our core audience.”

    Dominion argues, as part of its lawsuit, that nervousness about what its viewers wanted led Fox to air allegations that the voting machine company was complicit in fraud that hurt Trump, even though many people at the network didn’t believe them. In his own deposition, Fox founder Rupert Murdoch agreed the election had been fair and it “was not stolen.”

    Fox counters that it was airing newsworthy charges made by the president and his followers.

    Concern over the Arizona backlash spread to the news division, according to court documents. Fox News anchor Bret Baier said defending the call made him uncomfortable and suggested instead awarding the state to Trump. Roberts also sent a memo saying he’d been getting “major heat” over the decision.

    In 2012, Fox stood strongly behind its decision desk when network commentator and veteran GOP aide Karl Rove questioned its correct call that Barack Obama had won in Ohio, essentially assuring him of reelection against Republican Mitt Romney.

    In a memorable television moment, Megyn Kelly marched down the hall to hear the decision desk’s explanation for why the call was made.

    Eight years later, signs of timidity at Fox appeared in the days after its Arizona call. When other news organizations ultimately declared Biden the president-elect on the Saturday morning after the election, Fox waited about 15 minutes.

    On Nov. 20, 2020, Rupert Murdoch discussed with Scott in a private memo whether two Washington executives key to the Arizona race call should be fired, saying it would send a “big message” to Trump allies. The executives, Bill Sammon and Chris Stirewalt, lost their jobs two months later.

    A Fox spokeswoman characterized the discussions about the Arizona call as part of a typical postmortem that happens after big news events. Despite “intense scrutiny,” Fox stood by its call. Even though Sammon and Stirewalt were forced out, Fox kept consultant Arnon Mishkin, who has run its decisions desk, for the 2024 election.

    Scott, answerable to corporate bosses, noted in her deposition that she considered herself a television producer.

    “I don’t consider myself a journalist,” said the head of Fox News Media. “I consider myself a TV executive. I hire journalists. I hire news people.”

    Longtime Fox News Channel chief Roger Ailes wasn’t a journalist, either — his background was in politics. To some longtime Fox watchers, though, Ailes recognized that Fox’s opinion side drew strength from a solid news side, and he kept stronger barriers between the two.

    Some of the information revealed in recent weeks illustrates how, in many ways, Fox has become less of an agenda-setter than an outlet that follows its audience, said Nicole Hemmer, a Vanderbilt University professor and author of “Partisans: The Conservative Revolutionaries Who Remade American Politics in the 1990s.”

    To date, no one in Fox management has talked about the Dominion case to its journalists, leaving some wondering whether there is anyone standing up for them, said one Fox journalist, who spoke on condition of anonymity for fear of professional retribution.

    “There is some fine journalism still being done at Fox News today,” said Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania. She cited the transition of “Fox News Sunday” from Wallace to Bream.

    The fallout from the Dominion case, however, leaves open the question of whether Fox journalists will be allowed to do their jobs unconstrained by other forces, she said.

    “It would be useful for Fox News, at this point, to make a clear statement that the news division has complete and total autonomy and that a clear line is drawn between it and the rest of Fox,” Jamieson said.

    ____

    Associated Press writers Christina A. Cassidy in Atlanta, Jonathan J. Cooper in Phoenix, Gary Fields in Washington, Jennifer Peltz in New York and Nicholas Riccardi in Denver contributed to this report.

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  • The New York hush-money probe of Donald Trump explained

    The New York hush-money probe of Donald Trump explained

    NEW YORK — In the final weeks of the 2016 presidential election, Donald Trump’s lawyer tried to buy the silence of a porn actress who said she had a sexual encounter with the Republican during his days as a reality TV star.

    More than six years later, New York prosecutors appear to be close to deciding whether Trump should face charges in connection with that payoff, in what could become the first criminal case ever brought against a former president.

    Thursday’s news that the Manhattan district attorney invited Trump to testify before a grand jury next week suggested prosecutors were serious about bringing charges in a probe that looked like yesterday’s news just a few months ago.

    Trump’s former lawyer and fixer Michael Cohen, now a key prosecution witness, is scheduled to testify before the grand jury on Monday, according to two people familiar with the matter. The people were not authorized to speak publicly about grand jury proceedings and did so on condition of anonymity.

    Trump has denied wrongdoing and that he had any extramarital affairs, and he blasted the probe in a Truth Social post as a “political Witch-Hunt, trying to take down the leading candidate, by far, in the Republican Party”

    Here’s a refresher on how things got to this point:

    WHAT IS THIS CASE ABOUT?

    The investigation centers on hush-money payments made in 2016 to two women who alleged that they had extramarital encounters with Trump, who has denied their accounts of his infidelity.

    Specifically, District Attorney Alvin Bragg’s team appears to be looking at whether Trump or anyone committed crimes in arranging the payments, or in the way they accounted for them internally at the Trump Organization.

    HOW WERE THE PAYMENTS MADE?

    Cohen paid porn actress Stormy Daniels $130,000 through a shell company Cohen set up. He was then reimbursed by Trump, whose company logged the reimbursements as legal expenses.

    Earlier in 2016, Cohen also arranged for former Playboy model Karen McDougal to be paid $150,000 by the publisher of the supermarket tabloid the National Enquirer, which squelched her story in a journalistically dubious practice known as “catch-and-kill.”

    Trump’s company, the Trump Organization, “grossed up” Cohen’s reimbursement for the Daniels payment for “tax purposes,” according to federal prosecutors who filed criminal charges against the lawyer in connection with the payments in 2018.

    Cohen got $360,000 plus a $60,000 bonus, for a total of $420,000.

    Cohen pleaded guilty to violating federal campaign finance law in connection with the payments. Federal prosecutors say the payments amounted to illegal, unreported assistance to Trump’s campaign. But they declined to file charges against Trump himself.

    WHAT IS TRUMP’S INVOLVEMENT?

    Cohen says Trump directed him to arrange the Daniels payment.

    Cohen also made recordings of a conversation in which he and Trump spoke about the arrangement to pay McDougal through the National Enquirer.

    At one point in the recording, Cohen told Trump, “I need to open up a company for the transfer of all of that info regarding our friend, David,” a reference to David Pecker, who ran the Enquirer’s parent company at the time.

    Cohen said he had already spoken with the Trump Organization’s longtime finance chief, Allen Weisselberg, on “how to set the whole thing up.”

    Trump then said: “What do we got to pay for this? One-fifty?”

    Today, Trump characterizes the attempts to get him to pay money to the women to keep them quiet as “extortion.”

    WHAT CRIMES ARE PROSECUTORS LOOKING AT?

    Legal experts say a case could be made that Trump falsified business records by logging Cohen’s reimbursement for the Daniels payment as legal fees. But that’s only a misdemeanor under New York law — unless prosecutors could prove he falsified records to conceal another crime.

    Mark Pomerantz, who led the investigation under then-District Attorney Cyrus Vance Jr., wrote in his recent book “People vs. Donald Trump: An Inside Account” that in 2021, he looked into whether Trump could be charged with money laundering or if Trump had been somehow extorted.

    David Shapiro, a fraud risk and financial crimes specialist and former FBI special agent, said a potential case against Trump could be “especially difficult” when it comes to proving his intent and knowledge of wrongdoing.

    “He’s loud, he’s brash, so proving that he had specific intent to fraud, one is almost left with the idea that, ‘well, if he has that specific intent of fraud, he has it all of the time, because that’s his personality,’” said Shapiro, a lecturer at John Jay College of Criminal Justice.

    The Manhattan district attorney’s office has declined to comment on the investigation.

    HAVEN’T WE BEEN HERE BEFORE?

    Yes. Several times.

    Federal prosecutors entered into a non-prosecution agreement with the National Enquirer’s owner, which admitted paying McDougal to help Trump, but they declined to seek a criminal charge against the then-sitting president.

    The Manhattan district attorney’s office opened its own investigation into the payments in 2019 and has revisited it several times since while expanding the probe into Trump’s business dealings and other topics.

    So far, the only charges have been against Weisselberg, who pleaded guilty, and the Trump Organization, which was convicted in December of an unrelated offense: scheming to dodge taxes on company-paid perks such as free apartments and cars for executives.

    WHAT ABOUT THE STATUTE OF LIMITATIONS?

    The hush-money payments and Cohen’s reimbursements happened more than six years ago. New York’s statute of limitations for most felonies is five years. For misdemeanors, it’s just two years.

    Does that mean prosecutors have run out of time? Trump thinks so. In social media posts, he insists that the statute of limitations “long ago expired,” calling the matter “old news.”

    But that’s not always how the law works. In New York, the clock can stop on the statute of limitations when a potential defendant is continuously outside the state. Trump visited New York rarely over the four years of his presidency and now lives mostly in Florida and New Jersey.

    Practically speaking, though, the passage of time could affect the case in other ways. Memories fade, and evidence and records get lost or destroyed.

    “The power of the case — the surprise factor, the shock value,” also fades, Shapiro said, meaning a jury might be less impressed by allegations that have been public for so long.

    WHO ARE PROSECUTORS SPEAKING WITH?

    Members of Trump’s inner circle, including his former political adviser Kellyanne Conway and former spokesperson Hope Hicks, have met with prosecutors in recent weeks. Cohen, now estranged from Trump, has made several visits to prepare for his expected grand jury testimony.

    Among others: Pecker, the former National Enquirer publisher, was spotted going into the building where the grand jury is meeting, as well as Trump Organization insiders including the company’s senior vice president and controller Jeffrey McConney.

    Prosecutors are still interested in Weisselberg’s insider knowledge about the hush-money arrangements. The 75-year-old ex-CFO is due to be released from a five-month jail sentence on April 19. There’s no indication that he’s keen to cooperate against his former boss.

    Trump himself is probably highly unlikely to testify before the grand jury or meet with prosecutors.

    WHAT OTHER LEGAL TROUBLE IS TRUMP FACING?

    The hush-money case is one of several potential criminal cases the Republican faces as he mounts a comeback run for the White House in 2024, along with an investigation into election interference in Georgia, the probe of storage of classified documents at his Florida home, and other matters.

    __

    Associated Press reporter Jill Colvin contributed to this report.

    __

    Follow Michael Sisak on Twitter at twitter.com/mikesisak and send confidential tips by visiting https://www.ap.org/tips/.

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  • Theranos exec Sunny Balwani loses bid to delay prison term

    Theranos exec Sunny Balwani loses bid to delay prison term

    A federal judge has rejected former Theranos executive Ramesh “Sunny” Balwani’s bid to remain free while he appeals his conviction for crimes he committed during a blood-testing scam he orchestrated with his former boss and lover, Elizabeth Holmes.

    The 17-page ruling issued late Thursday pushes Balwani, 57, a step closer to having to begin a nearly 13-year prison sentence he received after a jury convicted him of 12 counts of fraud and conspiracy last year.

    Balwani is scheduled to report to prison March 15 unless he can win a reprieve from a federal appeals court in a motion his lawyers say they plan to file.

    Unless the appeals court rules he can remain free, Balwani has been ordered to report to an Atlanta federal prison, according to court documents. The 121-year-old prison has been plagued by misconduct and other abuses described by whistleblowers during a congressional hearing last year.

    U.S. District Judge Edward Davila, who sentenced Balwani and denied his request to remain free on appeal, had recommended he serve his time in a Lompoc prison. That facility is located about 250 miles (400 kilometers) from the San Jose, California, courtroom where his trial unfolded last year.

    The judge’s denial of Balwani’s request to remain free on appeal may not bode well for Holmes, Theranos’ CEO and founder. Her lawyers are also pushing Davila to allow her to stay out of prison during an appeal of her conviction on four felony counts of investor fraud and conspiracy. A March 17 hearing has been scheduled for Holmes’ lawyers to try to persuade Davila to allow her to remain free until the appeals case is resolved.

    Holmes, 39, is scheduled to start a sentence of more than 11 years on April 27. That will separate her from a 1-year-old son she had shortly before her trial began in September 2021 and a recently born child she was carrying at her November sentencing.

    Although they had separate trials, Holmes and Balwani were accused of essentially the same crimes centered on a ruse touting Theranos’ blood-testing system as a revolutionary breakthrough in health care. The claims helped the company become a Silicon Valley sensation that raised nearly $1 billion from investors.

    But its technology never came close to working like Holmes and Balwani boasted, resulting in Theranos’ scandalous collapse and a criminal case that shined a bright light on Silicon Valley greed and hubris.

    Davila hasn’t yet decided on how much money Holmes and Balwani each should have to pay for their crimes. Federal prosecutors are seeking restitution of nearly $900 million.

    In a hearing last month on Balwani’s bid to remain free, his attorneys alleged federal prosecutors had distorted and misrepresented trail evidence in a manner that makes it likely Balwani will prevail in his appeal of the convictions. The lawyers also pointed to Balwani’s non-violent history and past charity work in India as justification for him remaining free, asserting that he poses no danger to the community.

    Although Davila agreed Balwani is neither a flight risk nor dangerous, he concluded that still wasn’t enough to allow him to delay his time in prison. Davila wrote that he didn’t find evidence raising “substantial question of law or fact” during Balwani’s four-month trial that would merit overturning the jury’s verdict.

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  • Theranos exec Sunny Balwani loses bid to delay prison term

    Theranos exec Sunny Balwani loses bid to delay prison term

    A federal judge has rejected former Theranos executive Ramesh “Sunny” Balwani’s bid to remain free while he appeals his conviction for crimes he committed during a blood-testing scam he orchestrated with his former boss and lover, Elizabeth Holmes.

    The 17-page ruling issued late Thursday pushes Balwani, 57, a step closer to having to begin a nearly 13-year prison sentence he received after a jury convicted him of 12 counts of fraud and conspiracy last year.

    Balwani is scheduled to report to prison March 15 unless he can win a reprieve from a federal appeals court in a motion his lawyers say they plan to file.

    Unless the appeals court rules he can remain free, Balwani has been ordered to report to an Atlanta federal prison, according to court documents. The 121-year-old prison has been plagued by misconduct and other abuses described by whistleblowers during a congressional hearing last year.

    U.S. District Judge Edward Davila, who sentenced Balwani and denied his request to remain free on appeal, had recommended he serve his time in a Lompoc prison. That facility is located about 250 miles (400 kilometers) from the San Jose, California, courtroom where his trial unfolded last year.

    The judge’s denial of Balwani’s request to remain free on appeal may not bode well for Holmes, Theranos’ CEO and founder. Her lawyers are also pushing Davila to allow her to stay out of prison during an appeal of her conviction on four felony counts of investor fraud and conspiracy. A March 17 hearing has been scheduled for Holmes’ lawyers to try to persuade Davila to allow her to remain free until the appeals case is resolved.

    Holmes, 39, is scheduled to start a sentence of more than 11 years on April 27. That will separate her from a 1-year-old son she had shortly before her trial began in September 2021 and a recently born child she was carrying at her November sentencing.

    Although they had separate trials, Holmes and Balwani were accused of essentially the same crimes centered on a ruse touting Theranos’ blood-testing system as a revolutionary breakthrough in health care. The claims helped the company become a Silicon Valley sensation that raised nearly $1 billion from investors.

    But its technology never came close to working like Holmes and Balwani boasted, resulting in Theranos’ scandalous collapse and a criminal case that shined a bright light on Silicon Valley greed and hubris.

    Davila hasn’t yet decided on how much money Holmes and Balwani each should have to pay for their crimes. Federal prosecutors are seeking restitution of nearly $900 million.

    In a hearing last month on Balwani’s bid to remain free, his attorneys alleged federal prosecutors had distorted and misrepresented trail evidence in a manner that makes it likely Balwani will prevail in his appeal of the convictions. The lawyers also pointed to Balwani’s non-violent history and past charity work in India as justification for him remaining free, asserting that he poses no danger to the community.

    Although Davila agreed Balwani is neither a flight risk nor dangerous, he concluded that still wasn’t enough to allow him to delay his time in prison. Davila wrote that he didn’t find evidence raising “substantial question of law or fact” during Balwani’s four-month trial that would merit overturning the jury’s verdict.

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  • 29 arrested in Egypt after thousands were swept up in Hoggpool cryptocurrency investment scam

    29 arrested in Egypt after thousands were swept up in Hoggpool cryptocurrency investment scam

    Cairo — Egyptians who invested in a cryptocurrency mining app were hit last week with the daunting realization that the incredible profits they thought they were making all boiled down to fiction. The platform, called Hoggpool, was launched in August.

    In a promotional video, a man introduced the company with a claim that it was founded in Colorado in
    2019 and was investing in cutting-edge industries, from “life sciences technology” to “space tech and blockchain.” He called it “one of the leading energy providers worldwide” and said it offered “cryptocurrency mining at all levels.”

    A screengrab from a YouTube video shows a man promoting an investment company called Hoggpool to Egyptians. The company was the target of raids by Egyptian police, who arrested 29 individuals in early March 2023 in connection with the cryptocurrency scam.
    A screengrab from a YouTube video shows a man promoting an investment company called Hoggpool to Egyptians. The company was the target of raids by Egyptian police, who arrested 29 individuals in early March 2023 in connection with the cryptocurrency scam.

    Potential investors were offered various plans starting from only about $10, with a fixed profit promised of $1 per day over a specific period. The investment options ranged up to an $800 crypto-mining “machine” with a $55 per-day payout.

    Hoggpool told investors they could withdraw their money daily, minus a 15% tax, or wait until the end of the month and withdraw all their returns tax-free.

    To Tarek Abd El-Barr, who works in medical supplies, it sounded like an incredible opportunity.

    “They said they were ‘workers in mining,’” he told CBS News. “No one in Egypt knows what mining coins is. We don’t know anything about these things. We thought it was electronic investing — that they were like Amazon or Microsoft.”

    Pyramid and Ponzi schemes are nothing new in Egypt, but cryptocurrency scams are. Receptions, parties and meetings held by the people behind Hoggpool, in fancy hotels and other venues, gave users the impression that it was all aboveboard.

    Lawyers and victims told CBS News that ads on social media platforms lured some in, but for many, it was acquaintances who had already been hooked.

    A photo shared with CBS News by Egyptian lawyer Hussein El-Faham shows people attending an event organized by the Hoggpool company in Cairo, Egypt. Egyptian police announced on March 4, 2023, that 29 people had been arrested in connection to the cryptocurrency investment scam.
    A photo shared with CBS News by Egyptian lawyer Hussein El-Faham shows people attending an event organized by the Hoggpool company in Cairo, Egypt. Egyptian police announced on March 4, 2023, that 29 people had been arrested in connection to the cryptocurrency investment scam.

    Courtesy of Hussein El-Faham


    Abd El-Barr’s brother-in-law, who was using the app and seeing consistent profits, convinced him to join. Skeptical at first, he started with an investment of just 6,000 Egyptian pounds (about $200) in February. It seemed to work as promised, as such scams often do, and he got his money back with profits, so he tripled his investment.

    The platform’s biggest and final offer was a new “deposit funds” feature, with which users were told they could earn as much as five times the value of their existing investment in just five days. Abd El-Barr was skeptical again, but as it had worked thus far, he went ahead and took the risk, throwing all of his savings into the app.

    On February 27, when he tried to withdraw his money, it didn’t work. Two days later, on March 1, the app stopped working completely and the website vanished.

    “Many people took loans from banks to invest in it. I used my car instalment money. Now I have missed two installments and the bank is calling me,” he said.

    Dozens of videos of people sharing their stories and crying out for help quickly flooded the internet.

    A photo posted on Facebook by Egypt's Ministry of Interior on March 4, 2023, shows some of the 29 people arrested in connection with a cryptocurrency investment scam that saw unwitting investors robbed of hundreds of thousands of dollars, according to Egyptian police.
    A photo posted on Facebook by Egypt’s Ministry of Interior on March 4, 2023, shows some of the 29 people arrested in connection with a cryptocurrency investment scam that saw unwitting investors robbed of hundreds of thousands of dollars, according to Egyptian police.

    Egyptian Ministry of Interior


    On Saturday, Egyptian authorities announced the arrest of 29 suspects, including 13 foreign nationals, in connection with the scam. Police seized 95 phones, 3,367 SIM cards and about $194,000 worth of Egyptian and foreign currency as they made the arrests, the Ministry of Interior said in a statement. It said the culprits used 88 digital currency wallets to collect the money, then divided it into 9,965 e-wallets and converted it into bitcoin before transferring it into accounts around the world.

    The statement said the suspects had bilked unsuspecting investors of at least 19 million pounds, or about $615,000, but many in Egypt believe the real total was likely much higher.

    Lawyer Abdulaziz Hussein told CBS News he was representing more than 1,000 victims of the scam in Cairo alone, but that as many as 800,000 people around the country may have fallen prey to the scheme, losing as much as 6 billion pounds in total — the equivalent of about $194 million.

    Cryptocurrency trading is illegal in Egypt, and another lawyer representing some of the victims said that had likely kept many from reporting the crime.

    “Some of the victims might turn into suspects if the investigations prove they knew what they were doing was illegal,” said Mahmoud El-Semri.

    It is hard to tell how many of the victims might have continued investing, and recruiting others, with knowledge that the scheme involved banned cryptocurrency, especially as most appear to have joined through recommendations from friends or family — people they trusted and who, in many cases, probably meant well.

    “Most people didn’t look into the details of how this works, we just understood they would invest the money in programing,” Hussein El-Faham, a lawyer who was swept up in the scam himself, told CBS News.

    He said it was an elaborate scam that looked and sounded legitimate, complete with forged documentation.

    A falsified document purporting to show the Hoggpool company’s U.S. business credentials was shared with CBS News by Egyptian lawyer Hussein El-Faham, who was swept up in the cryptocurrency scam himself.

    Courtesy of Hussein El-Faham


    El-Faham said he and others heard warnings about it being a scam, but as the app initially continued paying out money as promised, it was easy to dismiss those reports. The people behind the app even used the warnings of fraud as a marketing tool, he said.

    El-Faham shared a screenshot with CBS News that showed the scammers warning users of “fake” apps, asking them — in poorly written Arabic — to “please be cautious, those scammers have a low-tech level, and they are stupid enough to copy our system layout. Keep your eyes open.”

    El-Faham lost about $6,000 to the scheme.

    Dr. Sarah Zain, a physiotherapist, told CBS News she had her doubts about the app even as she used it, as it appeared to be an unsustainable business model, but she thought it would take longer to fall apart. She didn’t get her money out in time and ended up losing more than $7,000, which she said she needed for an upcoming surgery.

    “A friend of mine and her family invested two million pounds (about $65,000), she is not talking to anyone now,” she said. “I can’t believe we were that stupid! They did brainwash us.”

    Zain also put some blame on the government for allowing the scammers to operate openly for months.

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  • ‘Bling Bishop’ Lamor Whitehead Allegedly Faked Bank Docs | Entrepreneur

    ‘Bling Bishop’ Lamor Whitehead Allegedly Faked Bank Docs | Entrepreneur

    “Bling Bishop” Lamor Whitehead, who first drew worldwide attention when he was robbed while livestreaming a sermon in July 2022, is facing new federal fraud charges. Citing Manhattan Federal Court documents, the Daily News reports that Whitehead “told a bank his business had $2 million in its coffers when it had less than $10.”

    The Rolls Royce-driving Whitehead—arrested in December last year and charged with embezzling from one of his congregation members’ retirement fund—applied for a quarter-million dollar business loan in the summer of 2018, reports the News. He didn’t get the loan, which was good, given that prosecutors allege that Whitehead made up some vital documents to support the loan application he filled out online.

    The new indictment against Whitehead states that his documents were for “a bank account that did not in fact exist.” They also made it look like his company, Anointing Management Services LLC, had over $2 million in assets, even though “during that time period [the business] had an average ending balance of less than ten dollars.”

    Despite not obtaining the 2018 loan, Whitehead allegedly tried again in 2019, using faked documents as part of an application for a $1.3 million mortgage on his home in Paramus, New Jersey, described by the Daily News as a “six-bedroom, seven-bath…mansion.”

    Bishop Whitehead was already facing charges that included fleecing a member of his flock to the tune of $90,000. He is currently free on a $500,000 bond.

    Steve Huff

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  • Lawsuit against Fox shows the news behind the Trump news

    Lawsuit against Fox shows the news behind the Trump news

    Dominion Voting System’s $1.6 billion defamation lawsuit against Fox News is producing plenty of behind-the-scenes news about what the network’s personalities and executives thought about Donald Trump

    ByDAVID BAUDER AP Media Writer

    NEW YORK — Fresh revelations flowing from a major defamation lawsuit are shedding light on what was happening inside Fox News following the 2020 presidential election. Here are some things to know about the case.

    THE CASE

    Dominion Voting Systems is suing Fox for $1.6 billion, claiming the news outlet repeatedly aired allegations that the company engaged in fraud that doomed President Donald Trump‘s re-election campaign while knowing they were untrue. Fox contends that it was reporting newsworthy charges made by supporters of the president and is supported legally by libel standards. The case is scheduled for trial next month.

    ELECTION DISCONNECT

    Dominion has produced evidence that prominent people at Fox knew the fraud allegations were untrue, even as they and the president’s allies were given airtime to repeat them. Fox’s Sean Hannity said in a deposition that he did not believe the fraud claims “for one second,” but he wanted to give accusers the chance to produce evidence. Fox founder Rupert Murdoch, questioned under oath, agreed the 2020 presidential election was free and fair: “The election was not stolen,” he said. Murdoch also said he was aware some Fox commentators — Lou Dobbs, Maria Bartiromo, Jeanine Pirro and Hannity — at times endorsed false claims, but he did nothing to stop them.

    FOX’S FEAR

    The court papers have laid out a profound concern at Fox over the impact of its election night call that Democrat Joe Biden had beaten Trump in the battleground state of Arizona — a call that was accurate. Fox scooped its rivals on the call, but it infuriated Trump and many Fox viewers, who expressed their anger and began tuning in to rival conservative media outlets such as Newsmax. The call was making so many people uncomfortable at Fox that news anchor Bret Baier even suggested it be overturned and Arizona counted in Trump’s column. The Washington executive responsible for the declaration held firm and was proven right — then paid for it with his job two months later.

    LIBEL LAW

    In its defense, Fox has relied on a doctrine of libel law in place since a 1964 U.S. Supreme Court ruling that has made it difficult for plaintiffs to prove defamation. Public figures, and Dominion fits that standard in this case, have to prove not only that the information reported was incorrect, but that the news organization acted with “reckless disregard” about whether it was true or not. Fox says Dominion can’t prove its case, but some First Amendment advocates suggest the company has a strong argument. Their worry is that a prolonged legal battle would give the Supreme Court a chance to change libel laws that would weaken protection for all the media.

    TRUMP’S INTEREST

    Trump has taken a keen interest in the case, judging by his social media posts. Always concerned about loyalty, and nursing a long grudge about the Arizona call, he has expressed anger at revelations in the case that many people at Fox not only did not support his fraud allegations but privately disdained them. Court exhibits released this week contained blunt, dismissive assessments of Trump by some people who thought they were involved in private conversations — including host Tucker Carlson, who said in a text message in January 2021 about the president, “I hate him passionately.”

    THE ELECTION

    Federal and state election officials, exhaustive reviews in multiple battleground states where Trump challenged his loss and Trump’s attorney general found no widespread fraud that could have changed the outcome of the 2020 election. Nor did they uncover any credible evidence that the vote was tainted. Trump’s allegations of fraud also have been roundly rejected by dozens of courts, including by judges he had appointed.

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  • Lawsuit against Fox shows the news behind the Trump news

    Lawsuit against Fox shows the news behind the Trump news

    Dominion Voting System’s $1.6 billion defamation lawsuit against Fox News is producing plenty of behind-the-scenes news about what the network’s personalities and executives thought about Donald Trump

    ByDAVID BAUDER AP Media Writer

    NEW YORK — Fresh revelations flowing from a major defamation lawsuit are shedding light on what was happening inside Fox News following the 2020 presidential election. Here are some things to know about the case.

    THE CASE

    Dominion Voting Systems is suing Fox for $1.6 billion, claiming the news outlet repeatedly aired allegations that the company engaged in fraud that doomed President Donald Trump‘s re-election campaign while knowing they were untrue. Fox contends that it was reporting newsworthy charges made by supporters of the president and is supported legally by libel standards. The case is scheduled for trial next month.

    ELECTION DISCONNECT

    Dominion has produced evidence that prominent people at Fox knew the fraud allegations were untrue, even as they and the president’s allies were given airtime to repeat them. Fox’s Sean Hannity said in a deposition that he did not believe the fraud claims “for one second,” but he wanted to give accusers the chance to produce evidence. Fox founder Rupert Murdoch, questioned under oath, agreed the 2020 presidential election was free and fair: “The election was not stolen,” he said. Murdoch also said he was aware some Fox commentators — Lou Dobbs, Maria Bartiromo, Jeanine Pirro and Hannity — at times endorsed false claims, but he did nothing to stop them.

    FOX’S FEAR

    The court papers have laid out a profound concern at Fox over the impact of its election night call that Democrat Joe Biden had beaten Trump in the battleground state of Arizona — a call that was accurate. Fox scooped its rivals on the call, but it infuriated Trump and many Fox viewers, who expressed their anger and began tuning in to rival conservative media outlets such as Newsmax. The call was making so many people uncomfortable at Fox that news anchor Bret Baier even suggested it be overturned and Arizona counted in Trump’s column. The Washington executive responsible for the declaration held firm and was proven right — then paid for it with his job two months later.

    LIBEL LAW

    In its defense, Fox has relied on a doctrine of libel law in place since a 1964 U.S. Supreme Court ruling that has made it difficult for plaintiffs to prove defamation. Public figures, and Dominion fits that standard in this case, have to prove not only that the information reported was incorrect, but that the news organization acted with “reckless disregard” about whether it was true or not. Fox says Dominion can’t prove its case, but some First Amendment advocates suggest the company has a strong argument. Their worry is that a prolonged legal battle would give the Supreme Court a chance to change libel laws that would weaken protection for all the media.

    TRUMP’S INTEREST

    Trump has taken a keen interest in the case, judging by his social media posts. Always concerned about loyalty, and nursing a long grudge about the Arizona call, he has expressed anger at revelations in the case that many people at Fox not only did not support his fraud allegations but privately disdained them. Court exhibits released this week contained blunt, dismissive assessments of Trump by some people who thought they were involved in private conversations — including host Tucker Carlson, who said in a text message in January 2021 about the president, “I hate him passionately.”

    THE ELECTION

    Federal and state election officials, exhaustive reviews in multiple battleground states where Trump challenged his loss and Trump’s attorney general found no widespread fraud that could have changed the outcome of the 2020 election. Nor did they uncover any credible evidence that the vote was tainted. Trump’s allegations of fraud also have been roundly rejected by dozens of courts, including by judges he had appointed.

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  • In fraud case, embattled Ozy Media is a no-show

    In fraud case, embattled Ozy Media is a no-show

    Ozy Media billed itself as “the New and the Next” as its charismatic cofounder, former MSNBC and CNN host Carlos Watson, attracted millions of dollars from investors on a promise to attract young, sophisticated audiences.

    But on Wednesday, the once-buzzy company didn’t even have representation in court as it was arraigned on securities fraud and wire fraud charges. There was confusion when representatives for the company were a no-show at its arraignment at a federal courthouse in Brooklyn. A judge had to enter a plea of “not guilty” on its behalf.

    Outside the courtroom, a public defender who had been hurriedly assigned to represent the company at the hearing quickly tried to make sense of the case. She asked a journalist what Ozy did and what the case was about.

    Later, she was excused from what is expected to be a complex and sprawling case involving hundreds of thousands of documents and allegations that the company’s executives misrepresented its financial standing and the size of its audience.

    Allegations of fraud

    Founded in California’s Silicon Valley in 2013, Ozy marketed itself as a progressive digital platform, providing a place for fresh perspectives on news, culture entertainment, business and technology. It published stories on a website, produced podcasts and TV shows and held an annual festival in New York’s Central Park that was a mix of big-name music performances and talks by public figures.

    But prosecutors said that while the company initially successfully raised tens of millions of dollars to fund its growth, it got desperate as it began hemorrhaging money.

    Between 2018 and 2021, prosecutors said, Ozy and its founders lied to investors about the company’s debts and other pertinent financial information. The SEC contends that Watson and his company defrauded investors of about $50 million.

    The company shut down in 2021, a week after a report by the New York Times detailed an episode in which the company’s chief operating officer impersonated a YouTube executive during a pitch to Goldman Sachs, which had been considering infusing money into the media enterprise.

    Federal prosecutors filed criminal charges in late February accusing Watson and the company of bilking investors. Watson was also charged with identity theft over the alleged impersonation of several media executives. He has denied the charges and pleaded not guilty.

    If convicted, Watson faces at least two years in prison up to a maximum of 37 years, according to prosecutors.

    The company’s former chief operations officer, Samir Rao, pleaded guilty last month, as did Ozy’s former chief of staff, Suzee Han. Both were released on bail to await sentencing.

    It was unclear why the company has been unable to retain a lawyer. Watson’s attorney could not be reached for comment. The company ceased business operations last week.

    Assistant U.S. Attorney Jonathan Siegel told the judge that prosecutors wanted to proceed with the case and asked the judge to appoint a lawyer for the company until it can find an attorney of its own.

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  • In fraud case, embattled Ozy Media is a no show

    In fraud case, embattled Ozy Media is a no show

    NEW YORK — Ozy Media billed itself as “the New and the Next” as its charismatic cofounder, former MSNBC and CNN host Carlos Watson, attracted millions of dollars from investors on a promise to attract young, sophisticated audiences.

    But on Wednesday, the once-buzzy company didn’t even have representation in court as it was arraigned on securities fraud and wire fraud charges.

    There was confusion when representatives for the company were a no-show at its arraignment at a federal courthouse in Brooklyn. A judge had to enter a plea of “not guilty” on its behalf.

    Outside the courtroom, a public defender who had been hurriedly assigned to represent the company at the hearing quickly tried to make sense of the case. She asked a journalist what Ozy did and what the case was about.

    Later, she was excused from what is expected to be a complex and sprawling case involving hundreds of thousands of documents and allegations that the company’s executives misrepresented its financial standing and the size of its audience.

    Founded in California’s Silicon Valley in 2013, Ozy marketed itself as a progressive digital platform, providing a place for fresh perspectives on news, culture entertainment, business and technology.

    It published stories on a website, produced podcasts and TV shows and held an annual festival in New York’s Central Park that was a mix of big-name music performances and talks by public figures.

    But prosecutors said that while the company initially successfully raised tens of millions of dollars to fund its growth, it got desperate as it began hemorrhaging money.

    Between 2018 and 2021, prosecutors said, Ozy and its founders lied to investors about the company’s debts and other pertinent financial information. The SEC contends that Watson and his company defrauded investors of about $50 million.

    The company shut down in 2021, a week after a report by the New York Times detailed an episode in which the company’s chief operating officer impersonated a YouTube executive during a pitch to Goldman Sachs, which had been considering infusing money into the media enterprise.

    Federal prosecutors filed criminal charges in late February accusing Watson and the company of bilking investors. Watson was also charged with identity theft over the alleged impersonation of several media executives. He has pleaded not guilty.

    The company’s former chief operations officer, Samir Rao, pleaded guilty last month, as did Ozy’s former chief of staff, Suzee Han. Both were released on bail to await sentencing.

    It was unclear why the company has been unable to retain a lawyer. Watson’s attorney could not be reached for comment. The company ceased business operations last week.

    Assistant U.S. Attorney Jonathan Siegel told the judge that prosecutors wanted to proceed with the case and asked the judge to appoint a lawyer for the company until it can find an attorney of its own.

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  • Tucker Carlson’s scorn for Trump revealed in court papers

    Tucker Carlson’s scorn for Trump revealed in court papers

    NEW YORK — A defamation lawsuit is revealing scornful behind-the-scenes opinions by Fox News figures about Donald Trump, including a Tucker Carlson text message declaring, “I hate him passionately.”

    Carlson’s private text comments were revealed in court papers at virtually the same time the former president was hailing the Fox News host on social media. Trump said he was doing a “great job” in presenting excerpts of U.S. Capitol security video of the Jan. 6, 2021, insurrection — though Carlson used the video to produce a false narrative of the attack.

    The documents are coming to light at a time of increased tension between Trump and Fox, the dominant media force appealing to conservatives, as he campaigns to regain the presidency.

    Voting machine manufacturer Dominion Voting Systems is suing Fox News for $1.6 billion, claiming the network broadcast false claims that the company was responsible for fraud in the 2020 presidential election. The case is to go to trial this spring, and a trove of documents related to Fox’s actions after the election are being publicly released in advance.

    A common theme emerging from the internal documents and depositions is that Fox executives and hosts doubted the election claims being peddled by Trump and his allies, but aired and emphasized them anyway. Fox was growing concerned about a decline in viewership as Trump supporters turned away from the network after it — correctly — called Joe Biden the presidential winner in Arizona on election night.

    The exchanges include Carlson’s text conversation on Jan. 4, 2021, with an unknown person, in which the prime-time host expressed anger toward Trump.

    Carlson said that “we are very, very close to being able to ignore Trump most nights” and that “I truly can’t wait.”

    Carlson said he had no doubt there was fraud in the 2020 election, but that Trump and his lawyers had so discredited their case — and media figures like himself — “that it’s infuriating. Absolutely enrages me.”

    Federal and state officials, courts, exhaustive reviews in battleground states and Trump’s attorney general found no widespread fraud that could have changed the outcome of the 2020 election, although Trump continues to falsely state that the presidency was stolen from him.

    Addressing Trump’s four years as president, Carlson said, “We’re all pretending we’ve got a lot to show for it, because admitting what a disaster it’s been is too tough to digest. But come on. There really isn’t an upside to Trump.”

    In another text exchange more than a month earlier, Carlson denigrated Trump’s business abilities: Trump’s talent, he said, is to “destroy things. He could easily destroy us if we play it wrong.”

    Publicly, Fox viewers heard very different views, such as a 2017 exchange with colleague Greg Gutfeld in which Carlson agreed that Trump was “the greatest president that ever will be.” On his show in 2019, Carlson said Trump had fought as hard as he could to make sure everyone in America was treated equally under the law.

    “You can say what you really believe in public,” Carlson said then. “You’re an American citizen. That is your right.” Trump could lose in 2020, he added, “but he’ll be a genuinely great president.”

    Fox, in response to the court exhibits quoting Carlson that were released late Tuesday, said that “Dominion has been caught red handed using more distortions and misinformation in their PR campaign to smear Fox News and trample on free speech and freedom of the press. We already know they will say and do anything to try to win this case, but to twist and even misattribute quotes to the highest levels of our company is truly beyond the pale.”

    Carlson has continued rolling out security video from the Capitol attack, footage handed to him by House Speaker Kevin McCarthy. For that, Trump said on his social media platform, “congratulations to Tucker Carlson on one of the biggest ‘scoops’ as a reporter in U.S. history.”

    The selective release of the footage to sway the historical account has drawn criticism, including from Senate Republican leader Mitch McConnell. Senate Majority Leader Chuck Schumer on Wednesday called on Fox to stop spreading election lies, which he said was eroding trust in American democracy.

    Fox’s founder, Rupert Murdoch, has a complex relationship with Trump: “I was not close to him,” Murdoch said in a deposition in the libel lawsuit.

    Indeed, though Murdoch acknowledged talking to Trump occasionally, he said he also sought inside information from Sean Hannity, one of his network’s primetime hosts, because Hannity was the closest person at Fox to Trump.

    Following Trump’s loss in November 2020, Murdoch despaired of the president’s behavior.

    “The real danger is what he might do as president,” Murdoch wrote in an email to a friend that month. “Apparently not sleeping and bouncing off walls! Don’t know about Melania, but kids no help.”

    But Murdoch told his network’s officials that he also didn’t want to “antagonize” Trump: “He had a very large following, and they were probably mostly viewers of Fox, so it would have been stupid,” Murdoch said in a deposition in the Dominion case.

    In separate questioning in the case, Murdoch acknowledged that he believed the 2020 presidential election “ was not stolen.”

    On social media recently, Trump was critical of Fox when other court papers released in the Dominion case made clear that a number of the network’s executives and personalities privately believed the election fraud claims were bunk.

    Trump and his team also have accused Fox of giving his latest campaign for the presidency little attention and favoring a potential challenger for the GOP nomination, Florida Gov. Ron DeSantis. Fox and Trump have long had a complicated relationship. While he frequently has used the network to reach its audience, he also has been furious at a perceived lack of loyalty, most prominently after the 2020 election.

    In a fiery speech at the Conservative Political Action Committee last week, Trump ally Steve Bannon complained that Fox had disrespected the former president.

    “You’ve deemed Trump’s not going to be president,” Bannon said. “Well, we deem you’re not going to have a network.”

    On Saturday afternoon, Fox News aired Trump’s speech to CPAC in its entirety.

    ___

    Riccardi reported from Denver. Associated Press writers Christina A. Cassidy in Atlanta, Jonathan J. Cooper in Phoenix, Gary Fields and Mary Clare Jalonick in Washington and Jennifer Peltz in New York contributed to this report, as did news researcher Randy Herschaft in New York.

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  • Fox chair Murdoch says 2020 election was fair: court filings

    Fox chair Murdoch says 2020 election was fair: court filings

    NEW YORK — Fox Corp. Chairman Rupert Murdoch said under oath that he believes the 2020 presidential election was free, fair and not stolen, according to court filings released Tuesday in a lawsuit over Fox News’ coverage of former President Donald Trump’s unfounded election fraud claims.

    In sworn questioning in January by lawyers for Dominion Voting Systems, Murdoch was asked, “Do you believe that the 2020 presidential election was free and fair?”

    “Yes,” he replied, according to a transcript.

    “The election was not stolen,” he said later.

    Dominion is suing Fox News for $1.6 billion, saying the network crippled the company’s business by broadcasting false claims from Trump’s lawyers that Dominion had changed votes in the 2020 election.

    Hundreds of pages of exhibits in the lawsuit, which is expected to go to trial next month, were released late Tuesday. They shed further light on internal skepticism at Fox over the fraud claims and the network’s worry about viewers angry with its own election-night declaration that Democrat Joe Biden had won Arizona. Those exhibits and earlier court filings demonstrate how Fox hosts and executives continued to promote those claims to viewers, despite strong doubts and denials behind the scenes.

    Federal and state election officials, exhaustive reviews in battleground states and Trump’s attorney general found no widespread fraud that could have changed the outcome of the 2020 election. Nor did they uncover any credible evidence that the vote was tainted. Trump’s allegations of fraud also have been roundly rejected by dozens of courts, including by judges he had appointed.

    Fox says Dominion is inventing its claims of lost business and has cherry-picked and misrepresented remarks by Fox hosts and leaders to paint a picture of a company that threw truth aside to keep its audience.

    “Dominion has been caught red-handed using more distortions and misinformation in their PR campaign to smear Fox News and trample on free speech and freedom of the press,” the company said in a statement Tuesday, complaining that “to twist and even misattribute quotes to the highest levels of our company is truly beyond the pale.”

    The documents revealed top Fox executives discussed ways of mollifying anger from Trump’s team over the election call, including a quick dismissal of a Washington executive who was behind the Arizona decision.

    “We don’t want to antagonize Trump further,” Murdoch said in a Nov. 16 memo. He explained in the deposition, “He had a very large following, and they were probably mostly viewers of Fox, so it would have been stupid.”

    In an earlier unsealed filing in the Dominion case, Murdoch acknowledged that some of the network’s hosts — Lou Dobbs, Maria Bartiromo, Jeanine Pirro and Sean Hannity — at times endorsed the false claims. He also said he didn’t stop the commentators from promoting the false claims from Trump allies that the election was stolen, even though he could have.

    Former House Speaker Paul Ryan, a Fox Corp. board member, said he never believed Trump’s conspiracy theories about the election.

    In a Dec. 7 text to Fox executive Lachlan Murdoch, Ryan suggested that Fox broadcast a “solid pushback” against the allegations of fraud, noting that “this is a key inflection point for Fox, where the right thing and the smart business thing to do line up nicely.”

    The exhibits included an extraordinary three-way text conversation on Nov. 16, 2020, among the stars of Fox’s prime-time lineup: Tucker Carlson, Sean Hannity and Laura Ingraham. In the conversation, the three opinion stars complained bitterly — and profanely — that they were being hurt by Fox’s news division.

    “We devote our lives to building an audience and they let (news anchors) Chris Wallace and Leland … Vittert wreck it,” Carlson said, using an expletive.

    “I’m disgusted at this point,” Hannity said.

    Ingraham said that “we should all think about how together we can force a change. The audience that exists comes for us.”

    Carlson, who just this week told Fox News viewers that the election that unseated Trump “was a grave betrayal of American democracy,” spoke bluntly about the former president in text messages that were revealed as part of Dominion’s case.

    On Jan. 4, 2021, Carlson told an unidentified person he was texting with that “we are very, very close to being able to ignore Trump most nights.” He said of the outgoing president, “I hate him passionately.”

    In another text exchange more than a month earlier, Carlson denigrated Trump’s business abilities: “What he’s good at is destroy things. He could easily destroy us if we play it wrong.”

    The pressure on Fox from its audience after its correct Arizona call was felt in Fox’s news ranks, too. In a memo sent two days after the election to Bill Sammon, Fox’s managing editor in Washington, Fox News anchor Bret Baier said it was getting “really uncomfortable” having to defend the decision on the air.

    Baier suggested that the sooner Fox changed its decision and declared Trump the winner in Arizona, “the better we are,” even if it caused the network embarrassment.

    Sammon replied, “It’s not pride that’s got us sticking to the call — it’s math. I’m confident we will be proven right.”

    He was — and two months later Fox forced him out of his job.

    The exhibits released Tuesday had several references to accusations against Dominion made by Trump attorneys Sidney Powell and Rudolph Giuliani. In one email, Fox’s Dana Perino references a Powell interview with Fox’s Maria Bartiromo, saying “this is nuts.” Carlson says in a text message that “Sidney Powell is lying.”

    An email sent Tuesday to a representative of Powell seeking comment was not immediately returned.

    Four days after the election, Powell forwarded an email to Bartiromo from a woman who claimed that voting irregularities in a number of states had Dominion as “one common thread.”

    Fox said the woman’s email has been misrepresented as being a key source of Fox’s reporting on Dominion. Bartiromo said in her deposition that she didn’t remember the email beyond forwarding it to her producer to check out.

    Also Tuesday, another voting tech company suing Fox News argued that Rupert and Lachlan Murdoch played a leading role in airing false claims that its technology helped “steal” the 2020 presidential election from Trump.

    Smartmatic said the Murdochs, as the ultimate authorities at the network’s corporate parent, “directed Fox News Network to embrace disinformation following the 2020 U.S. election as a business decision.”

    ___

    Associated Press writers Christina A. Cassidy in Atlanta; Jonathan J. Cooper in Phoenix; Gary Fields in Washington; and Nicholas Riccardi in Denver contributed to this report.

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  • Fox libel defense at odds with top GOP presidential foes

    Fox libel defense at odds with top GOP presidential foes

    NEW YORK — Fox News is on an unlikely collision course with two leading contenders for the Republican presidential nomination over the rights of journalists.

    In defending itself against a massive defamation lawsuit over how it covered false claims surrounding the 2020 presidential election, the network is relying on a nearly 60-year-old Supreme Court ruling that makes it difficult to successfully sue media organizations for libel.

    Former President Donald Trump and Florida Gov. Ron DeSantis, two favorites of many Fox News viewers, have advocated for the court to revisit the standard, which is considered the foundational case in American defamation law.

    “It is ironic that Fox is relying on a landmark case that was designed to help the news media play the watchdog role in a democracy and is under attack by Gov. DeSantis, Donald Trump and other figures who have been untethered in their attacks on journalists as enemies of the people,” said Jane Hall, a communication professor at American University.

    Eye-catching evidence has emerged from court filings in recent weeks revealing a split screen between what Fox was portraying to its viewers about the false claims of election fraud and what hosts and executives were saying about them behind the scenes. “Sydney Powell is lying,” Fox News host Tucker Carlson said in a text to a producer, referencing one of the attorneys pushing the claims for Trump.

    In an email a few weeks after the 2020 election, Fox Corp. Chairman Rupert Murdoch described a news conference featuring Powell and former New York City Mayor Rudy Giuliani, another attorney who pushed the election lies: “Really crazy stuff. And damaging.”

    Aside from the revelations about Fox’s inner workings, the outcome could have broad implications for media organizations because of how they and the courts have come to rely on the libel law Fox is using as a shield.

    In its $1.6 billion lawsuit, voting machine maker Dominion Voting Systems argues that Fox repeatedly aired allegations that the company helped rig the general election against Trump despite many at the news organization privately believing the claims were false.

    Fox says the law allows it to air such claims if they are newsworthy.

    In a 1964 decision in a case involving The New York Times, the U.S. Supreme Court greatly limited the ability of public officials to sue for defamation. It ruled that news outlets are protected against a libel judgment unless it can be proven that they published with “actual malice” — knowing that something was false or acting with a “reckless disregard” to whether it was true or not.

    In one example of how the law was applied, editors at the Times acknowledged last year that an editorial mistakenly linked former Republican vice presidential nominee Sarah Palin’s rhetoric to an Arizona mass shooting. Palin lost her libel suit because she couldn’t prove the newspaper erred without concern for the truth.

    Some advocates for free speech worry that the Dominion-Fox lawsuit ultimately could give a conservative Supreme Court a chance to revisit the standard set in the case, known as New York Times Co. v. Sullivan. While the case has been among the court’s most durable precedents, the newly empowered conservative majority has indicated a willingness to challenge what had been considered settled law — as it did last year in overturning abortion rights.

    Two Supreme Court justices, Clarence Thomas and Neil Gorsuch, have publicly expressed interest in giving the precedent another look.

    In dissenting from a 2021 decision not to take up a libel case, Gorsuch wrote that what began in 1964 as a decision to tolerate occasional errors to allow robust reporting “has evolved into an ironclad subsidy for the publication of falsehoods by any means and on a scale previously unimaginable.” He said the modern media landscape is much different today, and suggested it was less careful.

    “My wish is that the parties would settle and this case would go away,” said Jane Kirtley, director of the Silha Center for the Study of Media Ethics and the Law at the University of Minnesota. “I don’t see any good coming out of it.”

    A perceived strength in Dominion’s case also worries some supporters of the press.

    Dominion says Fox was, in effect, torn between the truth that Joe Biden legitimately won the race and pleasing viewers who wanted to believe Trump’s lies. In depositions released last week, Murdoch argued that Fox as a network did not endorse the claims, but that some of its commentators — Maria Bartiromo, Lou Dobbs, Jeanine Pirro and Sean Hannity — at times did.

    Murdoch was among several at Fox to say privately they didn’t believe the claims made by Trump and his allies that widespread fraud cost him reelection. In his deposition, Murdoch said he could have prevented guests who were spouting conspiracies from going on the air, but didn’t.

    “One of the defenses is that even false speech about public figures is protected so long as it is believed by the speaker,” First Amendment attorney Floyd Abrams said. “But no one at Fox appears ready to say that he or she did believe the assertions … and there now appears to be substantial evidence that no one there at Fox did so. It’s a major blow.”

    Fox’s entire prime-time lineup privately disparaged Trump lawyer Sidney Powell, according to court papers. Laura Ingraham, in a text to Carlson, called her a “nut.” In a deposition, Hannity said he did not believe her theories “for one second.” Nevertheless, Powell was interviewed on Fox 11 times between Nov. 8 and Dec. 10, 2020, according to court papers.

    Dominion’s lawyers say Fox is arguing that it has no legal responsibility for broadcasting even the most horrible allegations, knowing they are false, as long as they are deemed newsworthy.

    Fox said Dominion is presenting an extreme view of defamation, one in which the network had a duty not to report the allegations but to suppress them or denounce them as false.

    “Under Dominion’s approach, if the president falsely accused the vice president of plotting to assassinate him, the press would be liable for reporting the newsworthy allegations so long as someone in the newsroom thought it was ludicrous,” Fox lawyers said in court papers.

    “Such a rule would stop the media in its tracks,” Fox said.

    There’s a high bar for proving libel — and that’s deliberate, First Amendment attorney Lee Levine said. Dominion has to show that a reasonable audience could conclude that someone at Fox was making these allegations, not just the interview subjects, he said.

    Still, Levine said, Dominion has the strongest defamation case he’s seen in 40 years of being involved in the topic.

    George Freeman, executive director of the Media Law Resource Center, said Fox should cite a lesser-known “neutral reportage” standard that dates back to a court case from the 1970s. It holds that news organizations should not be discouraged from reporting something newsworthy even if there are serious doubts about the truth, as long as that information comes from responsible and prominent sources.

    But the U.S. Supreme Court has not weighed in on that argument, and a number of lower courts have rejected it. It’s also not clear that the defense would be legally applicable in the Dominion case against Fox.

    There is sentiment in Republican circles that the Sullivan standard goes too far in protecting news organizations.

    DeSantis last month urged the Supreme Court to revisit libel laws, saying they are used to smear politicians and discourage people from running for office. A bill being considered in the Florida Legislature would significantly weaken standards in the state. Trump said last year that the court should consider his own defamation lawsuit against CNN a “perfect vehicle” for revisiting precedents.

    Some media law advocates that the University of Minnesota’s Kirtley has talked to privately, people who are usually eager to support the press in libel cases, are queasy about publicly backing Fox in the voting machine lawsuit.

    Many see the case as a surrogate to hold Fox and Trump supporters accountable for what happened after the 2020 election, she said.

    “I don’t think a libel suit is the vehicle to deal with this, and you have to think about what damage could be done to libel law if Dominion wins,” she said.

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  • Murdaugh’s fall from grace ends in life sentence for murder

    Murdaugh’s fall from grace ends in life sentence for murder

    WALTERBORO, S.C. (AP) — One of the last pieces of a legal dynasty that doled out justice in rural South Carolina for decades crumbled Friday as lawyer Alex Murdaugh was sentenced to spend the rest of his life in prison for the murder of his wife and son at their sprawling estate.

    In the quiet Lowcountry that Murdaugh’s family had dominated since the days of Jim Crow, a judge talked to Murdaugh in a way that few probably have — not in his days playing college football, making millions as a high-powered attorney or gaining favor because of his name — and reminded Murdaugh that he had to remove the portrait of the defendant’s grandfather from its place of honor in that same courtroom to ensure a fair trial.

    At sentencing, Murdaugh maintained his innocence, just as he did when he testified in his own defense during the six-week trial. But Circuit Court Judge Clifton Newman wanted to know if he saw the mangled bodies of Maggie and Paul Murdaugh as he tried to sleep or thought about how he disgraced his family’s three-generation reputation for justice through lying, stealing and — eventually — murder.

    “As I tell you again, I respect this court. But I am innocent. I would never under any circumstances hurt my wife Maggie and I would never under any circumstances hurt my son Paul-Paul,” Murdaugh responded.

    “And it might not have been you. It might have been the monster you become,” Newman said.

    Murdaugh faced the judge in the Colleton County courtroom on the circuit where his father, grandfather and great-grandfather tried cases as the elected prosecutor for more than 80 years. Murdaugh’s family founded the area’s most powerful law firm a century ago in neighboring Hampton County. For decades, that meant that practically anyone who ended up in court — whatever side of the law they found themselves on — would have a Murdaugh either watching their back or staring them down.

    Prosecutor Creighton Waters noted that stare each day in court.

    “I looked in his eyes. He liked to stare me down as he would walk by me during this trial. And I could see the real Alex Murdaugh when he looked at me,” Waters said.

    Prosecutors decided not to seek the death penalty in this case, and Newman handed down the harshest possible sentence he could — consecutive life sentences without parole.

    “Over the past century, your family — including you — have been prosecuting people here in this courtroom, and many have received the death penalty, probably for lesser conduct,” the judge said.

    Waters said none of the victims of the crime — members of Murdaugh’s family and the parents and relatives of his wife — wished to speak on behalf of the prosecution before sentencing. Murdaugh’s brother and surviving son sat behind him in the courtroom every day.

    “After six weeks of trial, they came away more convinced he did not do this. They are steadfastly in his camp,” defense attorney Jim Griffin said after the hearing.

    The jury deliberated for less than three hours Thursday before finding Murdaugh guilty of killing his 22-year-old son with two shotgun blasts and his 52-year-old wife with four or five rifle shots.

    Juror Craig Moyer told ABC News that when deliberations began, the jury immediately took a poll that came back with nine guilty votes. It didn’t take long to convince the other three.

    The juror agreed with prosecutors that the key piece of evidence was a video locked on his son’s cellphone for a year — video shot minutes before the killings at the same kennels near where the bodies would be found.

    The voices of all three Murdaughs can be heard on the video, though Alex Murdaugh had insisted for 20 months that he hadn’t been at the kennels that night. When he took the stand in his own defense, the first thing he did was admit he had lied to investigators about being at the kennels, saying he was paranoid of law enforcement because he was addicted to opioids and had pills in his pocket the night of the killings.

    “A good liar. But not good enough,” Moyer said.

    And the apparent tears Murdaugh cried throughout the trial, even on the witness stand? Moyer said he didn’t buy them.

    “All he did was blow snot,” Moyer said. “No tears. I saw his eyes. I was this close to him.”

    Friday’s hearing again took place in a packed courtroom. The Murdaugh case has attracted true crime fans from around the world with its threads of power, danger, money and privilege.

    Tracy Kinsinger came to the courthouse with a homemade sign reading “Murderer” that he made the night before.

    “The truth is he brought shame upon himself, his family, the community, his profession,” Kinsinger said. “It’s disgraceful.”

    Murdaugh didn’t look at the sign as he was hustled into the courthouse with his head down.

    Prosecutors didn’t have the weapons used to kill the Murdaughs or other direct evidence like confessions or blood spatter. But they had a mountain of circumstantial evidence, including the video putting Murdaugh at the scene of the killings five minutes before his wife and son stopped using their cellphones forever.

    Through more than 75 witnesses and nearly 800 pieces of evidence, jurors heard about betrayed friends and clients, Murdaugh’s failed attempt to stage his own death in an insurance fraud scheme, a fatal boat crash in which his son was implicated, the housekeeper who died in a fall in the Murdaugh home and the grisly scene of the killings.

    The now-disbarred attorney admitted stealing millions of dollars from the family firm and clients, saying he needed the money to fund his drug habit. Before he was charged with murder, Murdaugh was in jail awaiting trial on about 100 other charges ranging from insurance fraud to tax evasion.

    Defense attorneys said they will appeal, based largely on the judge allowing the evidence of crimes that Murdaugh has not been convicted of, which they say smeared his reputation.

    “They had cast Alex as a despicable human being. And that was the reason they offered it,” Griffin said.

    After sentencing, Murdaugh returned to the Colleton County jail to gather his possessions and will be taken to an evaluation center in Columbia for medical, mental health and education testing. In a month or so, he will move to a maximum security state prison like all new inmates serving life sentences.

    ___

    Find more AP coverage of the case: https://apnews.com/hub/alex-murdaugh

    ___ Collins reported from Columbia, South Carolina.

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  • Alex Murdaugh gets life in prison in murder of wife, son

    Alex Murdaugh gets life in prison in murder of wife, son

    WALTERBORO, S.C. — In the culmination of the once-prominent lawyer’s fall from grace, Alex Murdaugh was sentenced to life in prison without parole Friday after being convicted of murdering his wife and son.

    Judge Clifton Newman asked Murdaugh if he had anything he wanted to say before sentencing him to two consecutive life terms, and the South Carolina attorney maintained his innocence.

    “As I tell you again, I respect this court. But I am innocent. I would never under any circumstances hurt my wife Maggie and I would never under any circumstances hurt my son Paul-Paul,” Murdaugh responded.

    “And it might not have been you. It might have been the monster you become when you take 15, 20, 30, 40, 50, 60 opioid pills. Maybe you become another person,” Newman replied, noting Murdaugh’s decadeslong addiction to painkillers.

    In lengthy comments, Newman asked Murdaugh what he meant when he said “oh, what a tangled web we weave” while on the stand in his own defense, when he admitting lying to investigators about being at the kennels where Maggie and Paul Murdaugh were killed.

    “I meant when I lied, I continued to lie,” Murdaugh replied.

    “And the question is when will it end? You continued to lie and lie throughout your testimony,” Newman said.

    Newman also touched on the Murdaugh family’s history as they stood in a courtroom on the circuit where his father, grandfather and great-grandfather tried cases as the elected prosecutor for more than 80 years.

    “A lawyer, a person from a respected family who has controlled justice in this community for over a century. A person whose grandfather’s portrait hangs at the back of the courthouse that I had to have ordered removed in order to insure a fair trial,” Newman said.

    Prosecutor Creighton Waters said none of the victims of the crime — members of Murdaugh’s family and the parents and relatives of his wife — wished to speak on behalf of the prosecution before sentencing.

    “The depravity, the callousness, the selfishness of these crimes are stunning. The lack of remorse and the effortless way in which he is, including here, sitting right over there in this witness stand — your honor, a man like that, a man like this man, should never be allowed to be among free, law abiding citizens,” Waters said.

    Outside the courthouse Friday, Tracy Kinsinger, 58, had one goal: to ensure that Murdaugh saw his homemade sign reading “Murderer” that he made after a “mad dash” to Walmart for crafting supplies. For Kinsinger, who came from Beaufort, South Carolina, the outcome was a vindication of the legal system.

    “The truth is he brought shame upon himself, his family, the community, his profession,” Kinsinger said. “It’s disgraceful.”

    Prosecutors asked for a life sentence to hold Murdaugh responsible for what they say are decades of lying, stealing and using his family’s considerable clout in their tiny county to his advantage. The Colleton County jury deliberated for less than three hours before finding Murdaugh guilty of killing his 22-year-old son with a shotgun and his 52-year-old wife with a rifle on June 7, 2021.

    Juror Craig Moyer told ABC News that when deliberations began, the jury immediately took a poll that came back with nine guilty votes. It didn’t take long to convince the other three.

    The juror agreed with prosecutors that the key piece of evidence was a video locked on his son’s cellphone for a year — video shot minutes before the killings at the same kennels near where the bodies would be found.

    The voices of all three Murdaughs can be heard on the video, though Alex Murdaugh had insisted for 20 months that he hadn’t been at the kennels that night. When he took the stand in his own defense, the first thing he did was admit he had lied to investigators about being at the kennels, saying he was paranoid of law enforcement because he was addicted to opioids and had pills in his pocket the night of the killings.

    “A good liar. But not good enough,” Moyer said.

    Prosecutors didn’t have the weapons used to kill the Murdaughs or other direct evidence like confessions or blood spatter. But they had a mountain of circumstantial evidence, including the video putting Murdaugh at the scene of the killings five minutes before his wife and son stopped using their cellphones forever.

    Through more than 75 witnesses and nearly 800 pieces of evidence, jurors heard about betrayed friends and clients, Murdaugh’s failed attempt to stage his own death in an insurance fraud scheme, a fatal boat crash in which his son was implicated, the housekeeper who died in a fall in the Murdaugh home and the grisly scene of the killings.

    The now-disbarred attorney admitted stealing millions of dollars from the family firm and clients, saying he needed the money to fund his drug habit. Before he was charged with murder, Murdaugh was in jail awaiting trial on about 100 other charges ranging from insurance fraud to tax evasion.

    At a news conference after the sentencing, South Carolina Law Enforcement Division Chief Mark Keel said the case serves as a notice to anyone who aided in Murdaugh’s dozens of other alleged crimes.

    “Today is not the end. It’s the next step in the long road to justice for every person who has been victimized by Alex Murdaugh,” Keel said.

    ___

    Find more AP coverage of the case: https://apnews.com/hub/alex-murdaugh

    ___ Collins reported from Columbia, South Carolina.

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