Two people charged with hacking Ring security cameras to livestream swattings

In a reminder of smart home security’s dark side, two people hacked Ring security cameras to livestream swattings, according to a Los Angeles grand jury indictment (according to a report from Bloomberg). The pair called in hoax emergencies to authorities and livestreamed the police response on social media in late 2020.

James Thomas Andrew McCarty, 20, of Charlotte, North Carolina, and Kya Christian Nelson, 21, of Racine, Wisconsin, hacked into Yahoo email accounts to gain access to 12 Ring cameras across nine states in November 2020 (disclaimer: Yahoo is Engadget’s parent company). In one of the incidents, Nelson claimed to be a minor reporting their parents for firing guns while drinking alcohol. When police arrived, the pair used the Ring cameras to taunt the victims and officers while livestreaming — a pattern appearing in several incidents, according to prosecutors.

The pair were charged with conspiracy to access computers without authorization, which carries a maximum five-year sentence. Nelson, currently serving time in Kentucky for an unrelated case, was charged with two additional counts of intentionally accessing a computer without authorization and two counts of aggravated identity theft, which carries a mandatory two-year consecutive sentence.

More than 10 million users own Ring doorbells and home security cameras. Although the smart devices can deter things like robberies and “porch pirates,” Amazon admits to providing footage to police without user consent or a court order when it believes someone is in danger. Inexplicably, the tech giant made a zany reality series using Ring footage, which didn’t exactly quell concerns about the tech’s Orwellian side.

FTX founder Sam Bankman-Fried agrees to extradition to the US

When the Bahamas Attorney General’s office announced that it had arrested former FTX CEO Sam Bankman-Fried, it noted that the former FTX CEO was likely to be extradited at the request of the United States. Just over a week later, that prediction has co…

The year organized labor finally took root in big tech

Blessedly 2022, a year that by most people’s estimation will be remembered as lousy, will soon be in the rear view mirror of history. Hallelujah, life goes on.

There are any number of reasons to give a failing grade to The Year That Was: Inflation and the still-looming threat of another global recession, critical legislative losses on abortion and trans rights, yet another new covid variant, having to pay attention to Elon Musk — take your pick. But, in the realm of labor, there’s at least one reason to feel hopeful. 2022 was the year unions won elections to represent workers at two of the world’s biggest tech companies, with a third likely on the way.

Workers at an Apple Store in Towson, Maryland made history in June, becoming the first 110 unionized members of the tech giant’s approximately 160,000 person workforce. They chose to be represented by the International Association of Machinists and Aerospace Workers, but the Baltimore-area staffers are far from alone. Retail workers at a store in Oklahoma City became the second unionized faction within Apple in October — backed by the Communications Workers of America — while another in Glasgow, Scotland — joining GMB — became the third in November.

Many other Apple Store locations have been agitating for better conditions as well, a non-exhaustive list of which includes two stores in New York City, one in St. Louis, and one in Atlanta. Some of these have stalled or been frustrated by the usual union-busting tactics, like an alleged policy created by management in New York’s World Trade Center location to curtail organizing. The company’s anti-union tactics in Atlanta have since been deemed illegal by the National Labor Relations Board. And of course, Apple reportedly hasn’t given up on undermining already unionized locations. Workers at that same Towson store claim the company is withholding new benefits seemingly in retaliation.

Amazon workers in Staten Island have likewise become the first to organize one of the company’s warehouses — and not with an established union, either. Amazon Labor Union (ALU), a grassroots effort which officially established itself last April, secured a win against tremendous odds, less than a year after forming. Those odds, incidentally, included retaliatory firings of leaders, using police to intimidate and arrest organizers and an (unsuccessful) attempt to overturn the unionization vote. Amazon has previously illegally interfered with a union election and reportedly retains the services of operatives from the infamous Pinkerton agency to spy on workers and labor groups. The company’s new CEO, Andy Jassy, recently violated labor laws in several interviews by openly stating his employees would be “better off without a union.” This is all to say ALU had a tremendous uphill climb and, incredibly, managed to pull it off.

As with Apple though, what we’re talking about is a first step. The company has not bargained a contract yet with workers from ALU, and will likely forestall and undermine that process as much as possible, whether by legal or illegal means.

ALU’s organizing efforts have branched out but have so far not found the same success. A warehouse in upstate New York voted overwhelmingly against unionization. However, management had put up digital banners at the same location ahead of its organizing drive instructing workers specifically not to sign union cards, again in apparent contravention of labor law. ALU withdrew a union petition to organize a warehouse in California in October, but has remained open to refiling. Apart from ALU, the International Brotherhood of Teamsters claimed last December that organizing Amazon facilities would be a top priority — seemingly it has focused those efforts on an Amazon Air hub in San Bernardino, where workers have walked out in August and October. The surrounding area — California’s inland empire — is believed to be home to the highest density of Amazon facilities in the company’s logistics network.

Microsoft, too, received an early Christmas present in the form of quality assurance testers at its subsidiary ZeniMax Media announcing their intention to unionize with the Communications Workers of America. While that election has not yet taken place, Microsoft’s president Brad Smith penned a lengthy screed earlier this year supposedly espousing the company’s openness to union representation within its ranks. To many (this author especially) Brad’s words were hot air intended to assuage regulators who are weighing whether to allow the company to merge with games giant Activision-Blizzard. Incidentally if that deal goes through, Microsoft will be home to three bargaining units: this past year QA testers at Raven Software and Blizzard Albany successfully joined the CWA in May and December, respectively, becoming the first workers not only at Activision but at any major games publisher to do so.

Necessarily a huge number of other labor actions in the tech space have been left out of this recollection, but for the most part they fit the pattern above: lower-paid workers at wildly profitable companies whose wages have not even remotely kept up with inflation. Adding insult to injury, tech companies, broadly, did extremely well during the pandemic while these same frontline workers risked their health and safety. Then this year, once economic forecasts became gloomier, many were swept up in downsizing decisions. It’s perfectly logical Amazon warehouse workers, games testers at Microsoft and Activision, support staff at Meta, cafeteria workers with Alphabet and Waymo, janitors at Twitter and retail associates at Apple, Google Fiber and Verizon would be unhappy with their work arrangements. It’s the same reason rail workers, nurses and Starbucks baristas have been agitating, and the same reason approval for unions is the highest it’s been since 1965. Things aren’t working. The hand they’ve been dealt is unwinnable. And though an imperfect tool, unions are one of the few ways workers can attempt to renegotiate the terms.

Unfortunately, labor law in the US leaves much to be desired. Companies have incredible power to delay bargaining, wearing down their own workforces by attrition while cooking up excuses to fire, lay off or manage out organizing leaders. Even after the hurdle of winning a union election, according to Bloomberg Law, the mean negotiation time to secure a contract is over 13 months — and many take significantly longer. The penalties for breaking labor law are so minimal, especially for companies of Big Tech’s size, as to be non-existent. Whether this groundswell of organizing continues to grow in the coming year remains in every way an open question, depending at least in part on economic realities. With layoffs continuing to ravage not just frontline workers but higher-wage tech jobs, there’s reasons enough to suspect it might.

YouTube removes Pornhub channel over ‘multiple violations’

YouTube has removed PornHub’s official channel over what it called “multiple violations” of its community guidelines, Variety has reported. Pornhub’s YouTube channel first launched in 2014 and had 900,000 subscribers, but it no longer appears in YouTube search and its URL now shows a 404 error. 

YouTube said that Pornhub violated its policy against linking to sites that host content not allowed on YouTube. “Upon review, we terminated the channel Pornhub Official following multiple violations of our community guidelines,” a spokesperson said. “We enforce our policies equally for everyone, and channels that repeatedly violate or are dedicated to violative content are terminated.”

Pornhub’s parent MindGeek said that it “vehemently denied” YouTubes claims that it linked out to porn sites. “Pornhub maintains the absolute best trust and safety measures on the internet and takes special care to ensure it does not violate any of YouTube’s Community Guidelines,” a spokesperson said in a statement. “Unfortunately, this is just the latest example of discrimination against those in the adult industry.”

On Friday, the anti-pornography group National Center on Sexual Exploitation (NCOSE) wrote on its blog that it had flagged content that it believed violated YouTube policies. “After review, YouTube alerted NCOSE that they had terminated the channel for violations of their Community Guidelines.” MindGeek, meanwhile, said that performers and sex workers are marginalized groups and called YouTube’s “haphazard and arbitrary enforcement… dangerous and harmful.” 

Mastercard and Visa cut off payments to Pornhub in 2020, with Mastercard saying at the time that it found illegal content on the site. A federal judge refused to remove Visa from a lawsuit alleging that it aided MindGeek in monetizing child pornography. In September, Instagram banned Pornhub permanently, also citing violations of community guidelines. 

Ex-Twitter employee sentenced over spying for Saudi Arabia

In a rare case of Twitter drama unrelated to its owner, a former employee convicted of spying for Saudi Arabia received a three-and-a-half-year sentence on Wednesday. Ahmad Abouammo was found guilty in August of taking bribes from an aide to Saudi Crown Prince Mohammed bin Salman. In return, he allegedly supplied sensitive account info that could help track and silence dissidents.

Abouammo, a US resident born in Egypt, received about half of the more than seven years prosecutors sought. The former Twitter media partnership manager said he was only doing his job, but evidence revealed that he received $300,000 and a $20,000 Hublot watch from bin Salman’s aide. A Twitter whistleblower suggested in late August that the scandal reflected a broader practice of lax data security at the company.

Two other men were charged in the scheme. Ali Alzabarah, a Saudi citizen, is another former Twitter employee who prosecutors say acquired personal info for over 6,000 accounts, including that of high-profile dissident (and Jamal Khashoggi ally) Omar Abdulaziz. A third man, Ahmed Almutairi, was also charged but didn’t work at Twitter. Instead, he allegedly served as a contact between Twitter staffers and the Saudi government. Of the three, only Abouammo was in the US to face charges.

Here’s everything Sam Bankman-Fried is accused of by the US government

On Monday evening, Bahamian authorities arrested FTX founder and former CEO Sam Bankman-Fried at the request of the US government. The following morning, the Securities and Exchange Commission (SEC), Department of Justice (DOJ) and Commodity Futures Trading Commission (CFTC) filed formal civil and criminal charges against Bankman-Fried in “parallel actions.” It was a lot to take in all at once, so below Engadget has broken up current charges against SBF by agency, with some additional context provided.

Those indictments likely represent only the start of Bankman-Fried’s troubles. In addition to the charges it announced on Tuesday, the SEC said it was investigating Bankman-Fried for other securities violations. The agency also announced that it’s actively examining the actions of other FTX executives and employees. As more charges are unsealed, Engadget will continue to update this article.

Securities and Exchange Commission

The Securities and Exchange Commission accused SBF of defrauding FTX investors and customers of more than $1.9 billion. Starting as early as May 2019 until as recently as this past November, “Bankman-Fried was orchestrating a massive, years-long fraud, diverting billions of dollars of the trading platform’s customers funds for his own personal benefit and to help grow his crypto empire,” the SEC said.

All the while, Bankman-Fried portrayed himself as a responsible business leader building a safe trading platform with “sophisticated, automated measures to protect customer assets.” In reality, the SEC says, “Bankman-Fried orchestrated a fraud to conceal the diversion of customer funds to his privately-held crypto hedge fund, Alameda Research.”

Bankman-Fried told investors and customers FTX’s sister company was just another platform on the exchange with no special privileges to speak of. “These statements were false and misleading,” according to the SEC. Alameda had access to a “virtually unlimited ‘line of credit” unknowingly funded by FTX customers. In May 2022, when Alameda’s lenders demanded the firm repay loans worth billions of dollars, Bankman-Fried allegedly directed FTX to divert even more money to the hedge fund.

The SEC seeks to bar Bankman-Friend from trading securities in the future. The agency also wants to seize his ill-gotten gains and bar him from acting as an officer or director at another company.

Current FTX CEO John Ray III testified before the House Financial Services Committee on Tuesday — SBF had said he would attend the hearing before his arrest. Ray spoke to some of the allegations detailed by the SEC. “This is really old-fashioned embezzlement,” he told the panel. “We’ve lost $8 billion. I don’t trust a single piece of paper in this organization.”

Department of Justice

In addition to civil charges, Bankman-Fried faces a criminal indictment from the Justice Department. On Tuesday, prosecutors from the Southern District of New York filed eight charges against the former executive, including multiple counts of wire fraud. The Justice Department alleges SBF conspired with other individuals to defraud investors by sharing misleading information about FTX and Alameda’s financial condition. Prosecutors further accused him of attempting to commit commodities and securities fraud. On top of that, Bankman-Fried allegedly broke federal election laws by donating more than is legally allowed and in the names of other people.

SBF spoke about his political donations in a recent interview with journalist Tiffany Fong. “I donated to both parties. I donated about the same amount to both parties,” he said. “All my Republican donations were dark. The reason was not for regulatory reasons, it’s because reporters freak the fuck out if you donate to Republicans.”

It’s worth emphasizing how serious the criminal charges against Bankman-Fried are. For context, a federal judge recently sentenced Theranos founder and former CEO Elizabeth Holmes to 11 years in prison for defrauding the company’s investors and patients. Meanwhile, Ramesh “Sunny” Balwani, the startup’s former chief operating officer, was sentenced to nearly 13 years in prison for his role in the scheme. Sam Bankman-Fried stands accused of defrauding investors of almost $2 billion, or about twice what investors lost to Theranos.

Commodity Futures Trading Commission

Rounding out the current charges against Bankman-Fried, the Commodity Futures Trading Commission accused the former executive of using Alameda Research to “surreptitiously” siphon customer funds. “At Bankman-Fried’s direction, FTX executives created features in the underlying code for FTX that allowed Alameda to maintain an essentially unlimited line of credit on FTX,” the regulator alleges. It adds that Alameda had other “unfair” advantages, including an exemption from the platform’s auto-liquidation risk management process.

As early as May 2019, SBF and “at least one” other Alameda executive directed the firm to use FTX customer funds to trade on competing platforms and buy “high-risk” digital assets. Additionally, the CFTC alleges that Bankman-Fried and his cohorts “took hundreds of millions of dollars in poorly-documented ‘loans’ from Alameda,” which they then used to purchase real estate and make political donations.

For his actions, the CFTC is seeking to ban Bankman-Fried from trading derivatives and impose civil penalties against him. It also wants to bar him from acting as a director or officer in the future.

Eight charged in $114 million pump-and-dump stock scheme on Discord and Twitter

The US government just clamped down on a prominent online financial fraud. A federal grand jury and the Securities and Exchange Commission have charged eight men with allegedly operating a stock pump-and-dump scheme on Discord and Twitter between January 2020 and April 2022. They reportedly used their social media presences (including a combined 1.5 million Twitter followers) to artificially inflate the value of stocks, only to sell their shares without disclosing their plans. They made a $114 million profit off the campaign, the Justice Department said.

In addition to tweets, the group supposedly used a Discord server (Atlas Trading) to share misinformation about stocks. One participant, Daniel Knight, also co-hosted a podcast that apparently played a role in the fraud. He brought some of the others on his show and falsely portrayed them as experts, according to the SEC.

All eight are facing at least one charge of conspiracy to commit securities fraud. Edward Constantinescu (aka Constantin), Perry “PJ” Matlock, John Rybarczyk, Gary Deel, Stefan Hrvatin, Tom Cooperman and Mitchell Hennessey are facing additional charges that revolve around securities fraud and (in Constantinescu’s case) unlawful monetary transactions. The SEC has further charged Knight with aiding and abetting the scheme.

The conspiracy and fraud charges carry a maximum sentence of 25 years in prison for each count, while the transactions charge against Constantinescu carries a 10-year maximum. The SEC charges could add financial penalties, including disgorgement of the ill-gotten profits. 

The nature of the manipulation isn’t surprising. The meme stock saga on Reddit showed that online communities can influence share prices in the right circumstances. However, the charges suggest a trend — fraudsters now see social media as a viable way to fool many investors with relatively little effort. Don’t be surprised if you see more cases like this going forward.

US prosecutors are reportedly investigating FTX founder Sam Bankman-Fried for fraud

US federal prosecutors could be building a fraud case against FTX founder and former CEO Sam Bankman-Fried. Bloomberg reports Justice Department officials met with the crypto exchange’s bankruptcy team this week to discuss documents investigators aim t…

Former Theranos COO Sunny Balwani sentenced to 12 years and 11 months in prison

Ramesh “Sunny” Balwani, Theranos’ former chief operating officer, has been sentenced to nearly 13 years in prison. Balwani was found guilty of all charges in a trial earlier this year that charged him with defrauding the blood testing startup’s patients and investors.

Of note, his sentence is slightly longer than the 11 years and three months given to Elizabeth Holmes, the former CEO of Theranos. Ahead of his sentencing, Balwani’s legal team had asked for probation or house arrest, The Wall Street Journal reported. A probation officer had recommended a nine-year sentence, while prosecutors wanted 15 years in prison.

Balwani will also have to pay restitution, though the amount hasn’t yet been set. He is due to surrender March 15th.

Unlike Holmes, who was not convicted on seven out of 11 total fraud charges in her trial, Balwani was convicted of defrauding Theranos patients in addition to the company’s wealthy investors. As COO, Balwani oversaw the operations of the company’s troubled laboratory, and prosecutors argued that he had detailed knowledge of problems with its blood tests, and the risk they posed to patients.

Though Balwani never rose to the same level of fame as his former partner during his time at Theranos, his relationship with Holmes has played heavily into the intrigue surrounding the company’s downfall. Holmes and Balwani’s relationship featured prominently in The Dropout, a Hulu miniseries about Theranos, and text messages between the two were read aloud in both trials. 

Balwani was also a major part of Holmes’ defense. During her trial, she testified that Balwani had been abusive during their romantic relationship, and that had misled her about issues in the company’s lab. Balwani didn’t testify at his trial or speak during his sentencing hearing. 

NLRB says Apple violated federal law with anti-union meetings in Atlanta

Apple’s attempts to quell employees’ unionization efforts violated federal law, according to the National Labor Relations Board. The NLRB’s Atlanta regional director concluded that Apple held mandatory “captive audience” meetings and made coercive sta…