fraud

top-harvard-cancer-researchers-accused-of-scientific-fraud;-37-studies-affected

Top Harvard Cancer researchers accused of scientific fraud; 37 studies affected

Lazy —

Researchers accused of manipulating data images with copy-and-paste.

The Dana-Farber Cancer Institute in Boston.

Enlarge / The Dana-Farber Cancer Institute in Boston.

The Dana-Farber Cancer Institute, an affiliate of Harvard Medical School, is seeking to retract six scientific studies and correct 31 others that were published by the institute’s top researchers, including its CEO. The researchers are accused of manipulating data images with simple methods, primarily with copy-and-paste in image editing software, such as Adobe Photoshop.

The accusations come from data sleuth Sholto David and colleagues on PubPeer, an online forum for researchers to discuss publications that has frequently served to spot dubious research and potential fraud. On January 2, David posted on his research integrity blog, For Better Science, a long list of potential data manipulation from DFCI researchers. The post highlighted many data figures that appear to contain pixel-for-pixel duplications. The allegedly manipulated images are of data such as Western blots, which are used to detect and visualize the presence of proteins in a complex mixture.

DFCI Research Integrity Officer Barrett Rollins told The Harvard Crimson that David had contacted DFCI with allegations of data manipulation in 57 DFCI-led studies. Rollins said that the institute is “committed to a culture of accountability and integrity,” and that “Every inquiry about research integrity is examined fully.”

The allegations are against: DFCI President and CEO Laurie Glimcher, Executive Vice President and COO William Hahn, Senior Vice President for Experimental Medicine Irene Ghobrial, and Harvard Medical School professor Kenneth Anderson.

The Wall Street Journal noted that Rollins, the integrity officer, is also a co-author on two of the studies. He told the outlet he is recused from decisions involving those studies.

Amid the institute’s internal review, Rollins said the institute identified 38 studies in which DFCI researchers are primarily responsible for potential manipulation. The institute is seeking retraction of six studies and is contacting scientific publishers to correct 31 others, totaling 37 studies. The one remaining study of the 38 is still being reviewed.

Of the remaining 19 studies identified by David, three were cleared of manipulation allegations, and 16 were determined to have had the data in question collected at labs outside of DFCI. Those studies are still under investigation, Rollins told The Harvard Crimson. “Where possible, the heads of all of the other laboratories have been contacted and we will work with them to see that they correct the literature as warranted,” Rollins wrote in a statement.

Despite finding false data and manipulated images, Rollins pressed that it doesn’t necessarily mean that scientific misconduct occurred and the institute has not yet made such a determination. The “presence of image discrepancies in a paper is not evidence of an author’s intent to deceive,” Rollins wrote. “That conclusion can only be drawn after a careful, fact-based examination which is an integral part of our response. Our experience is that errors are often unintentional and do not rise to the level of misconduct.”

The very simple methods used to manipulate the DFCI data are remarkably common among falsified scientific studies, however. Data sleuths have gotten better and better at spotting such lazy manipulations, including copied-and-pasted duplicates that are sometimes rotated and adjusted for size, brightness, and contrast. As Ars recently reported, all journals from the publisher Science now use an AI-powered tool to spot just this kind of image recycling because it is so common.

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elizabeth-holmes-barred-from-federal-health-programs-for-90-years

Elizabeth Holmes barred from federal health programs for 90 years

Excluded —

The former Theranos CEO is barred from receiving payments from federal health program.

Theranos CEO and founder Elizabeth Holmes.

Theranos CEO and founder Elizabeth Holmes.

Elizabeth Holmes—the disgraced and incarcerated founder of the infamous blood-testing startup Theranos—is barred from participating in federal health programs for nine decades, according to an announcement from the health department Friday.

The exclusion means that Holmes is barred from receiving payments from federal health programs for services or products, which significantly restricts her ability to work in the health care sector. It also prevents her from participating in Medicare, Medicaid, and other federal health care programs. With a 90-year term, the exclusion is lifelong for Holmes, who is currently 39.

The exclusion was announced by Inspector General Christi Grimm of the Department of Health and Human Services’ Office of Inspector General.

Holmes is serving an 11-year, three-month sentence for defrauding investors of her blood-testing startup, Theranos, which she founded in 2003. At the time, Holmes claimed to have developed proprietary technology that could perform hundreds of medical tests using just a small drop of blood from a finger prick. The remarkable claim helped her drive the company’s valuation to a stunning $9 billion in 2014, and set up lucrative partnerships. But, in reality, the technology never worked. The company collapsed in 2018, and she was convicted of fraud in 2022.

In today’s announcement, the health department noted that the statutory minimum on exclusions for convictions like Holmes’ is just five years. But other factors are considered when determining the term, including how long the fraud took place, the length of the prison sentence, and the amount of restitution ordered. In addition to her 11-year prison sentence, Holmes was ordered to pay approximately $452,047,200 in restitution, the HHS-OIG noted.

“Accurate and dependable diagnostic testing technology is imperative to our public health infrastructure. False statements related to the reliability of these medical products can endanger the health of patients and sow distrust in our health care system,” Grimm said. “As technology evolves, so do our efforts to safeguard the health and safety of patients, and HHS-OIG will continue to use its exclusion authority to protect the public from bad actors.”

HHS-OIG also excluded former Theranos President Ramesh Balwani from federal health programs for 90 years. Balwani was also convicted of fraud and is serving a nearly 13-year sentence.

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from-cz-to-sbf,-2023-was-the-year-of-the-fallen-crypto-bro

From CZ to SBF, 2023 was the year of the fallen crypto bro

From CZ to SBF, 2023 was the year of the fallen crypto bro

Aurich Lawson | Getty Images (Bloomberg/Antonio Masiello)

Looking back, 2023 will likely be remembered as the year of the fallen crypto bro.

While celebrities like Kim Kardashian and Matt Damon last year faced public backlash after shilling for cryptocurrency, this year’s top headlines traced the downfalls of two of the most successful and influential crypto bros of all time: FTX co-founder Sam Bankman-Fried (often referred to as SBF) and Binance founder Changpeng Zhao (commonly known as CZ).

At 28 years old, Bankman-Fried made Forbes’ 30 Under 30 list in 2021, but within two short years, his recently updated Forbes profile notes that the man who was once “one of the richest people in crypto” in “a stunning fall from grace” now has a real-time net worth of $0.

In November, Bankman-Fried was convicted by a 12-member jury of defrauding FTX customers, after a monthlong trial where federal prosecutors accused him of building FTX into “a pyramid of deceit.” The trial followed months of wild headlines—comparing Bankman-Fried to a cartoon villain, accusing Bankman-Fried of stealing $2.2 billion from FTX customers to buy things like a $16.4 million house for his parents, and revealing that Bankman-Fried casually joked about losing track of $50 million.

Defending against his crimes at FTX, Bankman-Fried argued that “dishonesty and unfair dealing” aren’t fraud and even claimed that he couldn’t recall what he did at FTX, while FTX scrambled to recover $7.3 billion and put out the “dumpster fire.”

Ultimately, Bankman-Fried’s former FTX/Alameda Research partners, including his ex-girlfriend Caroline Ellison, testified against him. Ellison’s testimony led to even weirder revelations about SBF, like Bankman-Fried’s aspirations to become US president and his professed rejection of moral ideals like “don’t steal.” By the end of the trial, it seemed like very few felt any sympathy for the once-FTX kingpin.

Bankman-Fried now faces a maximum sentence of 110 years. His exact sentence is scheduled to be determined by a US district judge in March 2024, Reuters reported.

While FTX had been considered a giant force in the cryptocurrency world, Binance is still the world’s biggest cryptocurrency exchange—and considered more “systemically important” to crypto enthusiasts, Bloomberg reported. That’s why it was a huge deal when Binance was rocked by its own scandal in 2023 that ended in its founder and CEO, Zhao, admitting to money laundering and resigning.

Arguably Zhao’s fall from grace may have been more shocking to cryptocurrency fans than Bankman-Fried’s. Just one month prior to Zhao’s resignation, after FTX collapsed, The Economist had dubbed CZ as “crypto’s last man standing.”

Zhao launched Binance in 2017 and the next year was featured on the cover of Forbes’ first list of the wealthiest people in crypto. Peering out from under a hoodie, Zhao was considered by Forbes to be a “crypto overlord,” going from “zero to billionaire in six months,” where other crypto bros had only managed to become millionaires.

But 2023 put an abrupt end to Zhao’s reign at Binance. In March, the Commodity Futures Trading Commission (CFTC) sued Binance and Zhao over suspected money laundering and sanctions violations, triggering a Securities and Exchange Commission lawsuit in June and a Department of Justice (DOJ) probe. In the end, Binance owed billions in fines to the DOJ and the CFTC, which Secretary of the Treasury Janet Yellen called “historic penalties.” For personally directing Binance employees to skirt US regulatory compliance—and hide more than 100,000 suspicious transactions linked to terrorism, child sexual abuse materials, and ransomware attacks—Zhao now personally owes the CFTC $150 million.

On the social media platform X (formerly Twitter), Zhao wrote that after stepping down as Binance’s CEO, he will be taking a break and likely never helming a startup ever again.

“I am content being [a] one-shot (lucky) entrepreneur,” Zhao wrote.

From CZ to SBF, 2023 was the year of the fallen crypto bro Read More »

disgraced-nikola-founder-trevor-milton-gets-4-year-sentence-for-lying-about-evs

Disgraced Nikola founder Trevor Milton gets 4-year sentence for lying about EVs

Web of lies —

Prosecutors had asked for a heavier sentence to deter future fraud.

Trevor Milton, founder of Nikola Corp., arrives at court in New York on Monday, Dec. 18, 2023. Milton is set to be sentenced on Monday after being found guilty of securities fraud and wire fraud in October 2022.

Enlarge / Trevor Milton, founder of Nikola Corp., arrives at court in New York on Monday, Dec. 18, 2023. Milton is set to be sentenced on Monday after being found guilty of securities fraud and wire fraud in October 2022.

The disgraced founder and former CEO of the “zero emissions” truck company Nikola, Trevor Milton, was sentenced to four years in prison on Monday, Bloomberg reported.

That’s a lighter sentence than prosecutors had requested after a jury found Milton guilty of one count of securities fraud and two counts of wire fraud in 2022. During the trial, Milton was accused of lying about “nearly all aspects of the business,” CNBC reported.

From 2016 to 2020, Milton’s “extravagant claims” were fueled by a desire to pump up the value of Nikola stock, The New York Times reported. He was accused of misleading investors about everything from fake prototypes of emission-free long-haul trucks to billions worth of supposedly binding orders for hydrogen fuel cells and batteries that were never shipped. In a sentencing memo, prosecutors said that Milton targeted “less sophisticated investors,” the Times reported, engaging “in a sustained scheme to take advantage of” their inexperience.

Nikola’s stock peaked in 2020, but then dozens of fraud allegations were reported by the investment firm Hindenburg Research, causing Nikola stock to plummet promptly. “We have never seen this level of deception at a public company, especially of this size,” Hindenburg Research’s report said. Facing backlash, Milton resigned, voluntarily withdrawing from his company and selling off $100 million in Nikola stock to fund more than $85 million in luxury purchases, the Times reported. Today, Milton remains Nikola’s second-largest shareholder, Bloomberg reported.

By 2021, Nikola had admitted to the US Securities and Exchange Commission that nine statements made by Milton were “inaccurate.”

The price of these lies to investors was more than $660 million, prosecutors claimed.

Through it all, Milton has denied the charges, requesting to be sentenced to only probation while holding back tears, Bloomberg reported. At his sentencing hearing, he said that his “misstatements” came from a place of “deeply held optimism,” and he did not intend to cause any harm, Yahoo reported.

“I was not a very seasoned CEO,” Milton reportedly said.

Prosecutors sought heavier consequences, asking the judge to order Milton to pay a $5 million fine and sentence Milton to 11 years in prison.

Milton is likely to appeal, Bloomberg reported.

Nikola’s spokesperson provided Ars with a statement on the sentencing.

“Nikola has a strong foundation and is in the process of achieving our mission to decarbonize the trucking industry, which is our focus,” Nikola’s statement said. “We have made significant progress year-over-year and will continue with the same level of discipline and commitment in 2024. We are pleased to move forward and remind the public that the company founder has not had any active role in Nikola since September 2020.”

Nikola’s shaky road to recovery

Current Nikola CEO Steve Girsky has recently said that Nikola will recover by attracting “world-class people to execute on our business plan” and working toward “establishing ourselves as the leader in zero-emissions commercial transportation,” Forbes reported.

Girsky seems keen to move past the scandal by promoting Nikola’s latest successes. In September, Girsky boasted that daily tests showed that one of Nikola’s fuel cell trucks could successfully run for 900 miles.

“This was quite an accomplishment, and I defy anyone to find another zero-emission vehicle truck anywhere that can run up to 900 miles in a day,” Girsky said.

However, since the 2020 scandal, Nikola’s stock has dropped 99 percent, Forbes reported, and now an investor analytics company called Macroaxis has estimated that Nikola has an 81 percent chance of going bankrupt.

While Forbes credited Milton with most of Nikola’s current woes, it’s not just the scandal causing investment setbacks for Nikola. In August, Nikola also recalled most of its battery-electric trucks—about 209—after a fire probe revealed a “defective part” that “is believed to have caused a battery to overheat” and risk setting trucks on fire, The Wall Street Journal reported.

This represented “virtually all” the battery-electric trucks that Nikola had shipped to customers, the Journal reported. While engineers worked on a solution to keep battery-electric trucks on the roads, Nikola temporarily halted sales of the battery-electric trucks, ramping up production instead on hydrogen fuel-cell electric trucks that remain Nikola’s core focus.

In September, Girsky described the recall as a setback but pointed to all of Nikola’s progress since Milton’s departure.

“It’s a setback, but we’re in it for the long haul,” Girsky said. “We’ve proved the skeptics wrong who said we couldn’t engineer a truck, couldn’t build a truck, and couldn’t sell a truck, and we’re not planning on stopping any time soon.”

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