Goldman Sachs the bully

Michael Lewis looks at the case of Sergey Aleynikov, a brilliant computer programer who was sent to prison after sending himself some of Goldman Sachs proprietary code before leavinhttp://m.vanityfair.com/business/2013/09/michael-lewis-goldman-sachs-programmerg the company. Although the code he took was pretty much useless to him, and not usable at his next job, Goldman Sachs reported the crime to the FBI, and had him arrested and prosecuted. Because it seems as if no one prosecuting the case understood what it was about, Lewis convenes a panel of Wall St programmers to act as a jury.

“If Person A steals a bike from Person B, then Person A is riding a bike to school, and Person B is walking. A is better off at the expense of B. That is clear-cut and most people’s view of theft. In Serge’s case, think of being at a company for three years and you carry a spiral notebook and write everything down. Everything about your meetings, your ideas, products, sales, client meetings—it’s all written down in that notebook. You leave for your new job and take the notebook with you (as most people do). The contents of your notebook relate to your history at the prior company, but have very little relevance to your new job. You may never look at it again. Maybe there are some ideas or templates or thoughts you can draw on. But that notebook is related to your prior job, and you will start a new notebook at your new job which will make the old one irrelevant. . . . For programmers their code is their spiral notebook. [It enables them] to remember what they worked on—but it has very little relevance to what they will build next. . . . He took a spiral notebook that had very little relevance outside of Goldman Sachs.”

The real mystery, to the insiders, wasn’t why Serge had done what he had done. It was why Goldman Sachs had done what it had done. Why on earth call the F.B.I.? Why coach your employees to say what they need to say on a witness stand to maximize the possibility of sending him to prison? Why exploit the ignorance of both the general public and the legal system about complex financial matters to punish this one little guy? Why must the spider always eat the fly?

And I’m still waiting for Liars’ Poker to be made into a movie.

Goldman Sachs the bully

Art scam

I always like the super long art scam/crime stories in Vanity Fair. This one’s no different.

During the 1970s and early 80s, young Wolfgang Fischer led a nomadic life—like Peter Fonda in Easy Rider, Helene says. He spent a year and a half on a beach in Morocco, and lived in a commune in Spain. He drifted around Barcelona, London, and Paris, buying and selling paintings at antique markets. He lived on a houseboat in Amsterdam, where he put on psychedelic light shows at the Paradiso nightclub. He enjoyed some early success as a painter in his own right, contributing three works to a prestigious art exhibition in Munich in 1978. But, by his own admission, he was more drawn to the outlaw life. One day during his wanderings, he bought a pair of winter landscapes by an unknown 18th-century Dutch painter for $250 apiece. Fischer had noticed that tableaus from the period which depicted ice skaters sold for five times the price of those without ice skaters. In his atelier, he carefully painted a pair of skaters into the scenes and resold the canvases for a considerable profit. Thirty years ago, fakes were even harder to detect, than they are now, he tells me. “They weren’t the first ones I made, but they were an important step.” Soon he was purchasing old wooden frames and painting ice-skating scenes from scratch, passing them off as the works of old masters.

Art scam

This week’s best crime stories

These are the types of stories I would read all day if I had time. Two fascinating crime pieces from this week.

Do quarter horses count as real horses? Never mind. Mexican drug cartels and horse racing.

The business was “so far out there it’s hard to believe,” said Morris Panner, a former prosecutor who handled drug cases. “Maybe they were using some kind of perverse logic that told them they could hide in plain sight, precisely because people wouldn’t believe it or question it.”

The Treviño brothers devised an elaborate scheme in which Mexican businessmen paid for the horses — some of them worth hundreds of thousands of dollars — from their own bank accounts so the purchases would appear legitimate, according to the affidavit. The Zetas would later reimburse the businessmen, and the horses’ ownership would be transferred to Tremor.The brothers’ activities on either side of the border made for a stark contrast. One week in May began with the authorities pointing fingers at Miguel Ángel Treviño for dumping the bodies of 49 people — without heads, hands or feet — in garbage bags along a busy highway in northern Mexico. The week concluded with José Treviño fielding four Tremor horses in a prestigious race at Los Alamitos Race Course, near Los Angeles.

Rudy Kurniawan’s counterfeiting of prestigious maybe have broken wine collecting forever. That he was able to pull it off for so long gives credence to the idea that most people can’t taste the difference between a $4 bottle of wine and a… say, $42,500 bottle of champagne. Alternate title for this story? The Talented Mr. Ripple.

On March 8 of this year, Kurniawan was arrested by F.B.I. agents at his home in Arcadia, California, a suburb of Los Angeles, and charged with multiple counts of wire and mail fraud, notably in connection with the attempted sale of the bogus Ponsots. According to court documents, when agents entered Kurniawan’s house, they discovered a counterfeiting factory, with scores of bottles being converted to knockoffs and thousands of fake labels for the most prestigious wines from Burgundy and Bordeaux. It appears now that Kurniawan may have sold millions of dollars’ worth of counterfeit wines and scammed some of the world’s biggest collectors. It is potentially the largest case of wine fraud in history and may have left the market for rare and old wines irredeemably corrupted.

Also, this spoke to me, because basically, these people moved from comic book speculation to wine speculation… And you know what comic books are worth now.

In 2000, wine auctions worldwide grossed $92 million; by last year, that figure had quintupled, to $478 million. The buying frenzy was driven in large part by young collectors in the United States.

This week’s best crime stories

Jack Dorsey profile

In this Vanity Fair profile of Twitter/Square founder Jack Dorsey, he’s described as extremely focused (“Dorsey is unusually good at staying focused”), but then it also describes the year he spent learning botanical illustration, the year he spent becoming certified in massage therapy, his interest in fashion design, and his long time interest in transportation logistics. It seems kind of contradictory to me, but really what’s being described is the ability to focus intensely on what’s interesting at the moment. Not a bad thing, just different than extreme focus.

Jack Dorsey profile

21 Best Structures in the World

Vanity Fair magazine asked 52 experts to pick the five most important architecture works since 1980. There were 132 listed, and here’s a link to the top 21. See also the complete results and a slide show on Gehry’s buildings. Kudos to VF for at least making it possible to look at the top 21 buildings on one page. Slide shows are killing the internet.

I’ve been to 2 of the buildings, what about you?

21 Best Structures in the World