We’ve read about a variety of frauds lately, some in the business world and some at the government trough. We hear about the fraudsters being sanctioned, but never the people who were responsible for ladling out the cash. Our first example happened at JPMorgan (source: Association of Certified Fraud Examiners):
In late 2021, JPMorgan announced they were acquiring Frank, a fintech startup founded by [precious female entrepreneur] Charlie Javice that promised to simplify the college financial aid application process. The company reportedly had more than four million users who used the app to help them navigate the complex and difficult process of applying for financial aid. However, by December 2022, JPMorgan filed a civil lawsuit against Javice, alleging fraudulent claims over the amount of customers Frank had. Instead of the around four million customers Javice reported, Frank had fewer than 300,000 actual users. Federal prosecutors then brought criminal charges in early 2023, and in March 2025, Javice was found guilty on multiple counts, including securities fraud, wire fraud, bank fraud and conspiracy charges.
The discrepancy was significant, as Frank had only about 7% of the users it claimed to have during negotiations with JPMorgan Chase. Evidence showed that Javice had actually hired a data scientist for around $18,000 to create synthetic user data, which was then presented to JPMorgan during the acquisition process as a selling point.
Wims Morris, a JPMorgan executive, relied heavily on Javice’s claims about user data.
How’s Wims Morris doing now? Her LinkedIn profile says that she’s now in charge of $88 billion in auto loans:
Next we go to the geniuses at BlackRock, in charge of $12.5 trillion in assets (mostly index funds?). “BlackRock Stung by Loans to Business Accused of ‘Breathtaking’ Fraud” (WSJ):
The lenders have accused [enricher] Bankim Brahmbhatt, the owner of little-known telecom-services companies Broadband Telecom and Bridgevoice, of fabricating accounts receivable that were supposed to be used as loan collateral. The lenders filed suit in August. They said Brahmbhatt’s companies owe them more than $500 million.
The lenders allege in their complaint that their investigation determined that every customer email Brahmbhatt-owned companies had provided to verify invoices over the past two years was fake. They also said they discovered fraudulent contracts from customers dating back to 2018.
In other words, it seems that anyone able to type “Please generate some invoices and customer emails for my hypothetical telecom company” into an LLM could collect $500 million from the smartest folks on Wall Street. A Google search for “BlackRock firings after Brahmbhatt fraud” yields zero relevant results.
The same lack of accountability can be observed in government. Somalis living in Minnesota managed to defraud taxpayers of more than $1 billion via various welfare program schemes (on top of the taxpayer-funded housing, health care, food, and smartphone to which two-thirds of Somali households in Minnesota are entitled by virtue of having over-the-table income lower than 200 percent of the poverty line (MNCompass)). It got to the point that even the New York Times was willing to implicitly criticize war veteran Tim Walz: “How Fraud Swamped Minnesota’s Social Services System on Tim Walz’s Watch”:
The fraud scandal that rattled Minnesota was staggering in its scale and brazenness. … fraud took root in pockets of Minnesota’s Somali diaspora as scores of individuals made small fortunes by setting up companies that billed state agencies for millions of dollars’ worth of social services that were never provided. Federal prosecutors say that 59 people have been convicted in those schemes so far, and that more than $1 billion in taxpayers’ money has been stolen in three plots they are investigating. That is more than Minnesota spends annually to run its Department of Corrections. … Ms. Hassan is of Somali ancestry, as are all but eight of the 86 people charged in the meals, housing and autism therapy fraud cases, according to prosecutors. A vast majority are American citizens, by birth or naturalization.
“The message here in Minnesota,” [Tampon Tim] Walz said, “is if you commit a crime, if you commit fraud against public dollars, you are going to go to prison.”
The worst part is not the $1 billion extracted from taxpayers who had to work extra hours to send money to Somalis and Somalia, but that people might mistakenly believe that Somalis, two-thirds of whom are entitled to every form of welfare (see above), aren’t “hardworking”:
“The actions of a small group have made it easier for people already inclined to reject us to double down,” said Abdi Mohamed, a filmmaker in Minneapolis. “The broader Somali community — hardworking, family-oriented, deeply committed to Minnesota — is left carrying that burden.”
Missing from the article: “Joe Bureaucrat was fired for not noticing this obvious fraud and ladling out more than one $billion in tax dollars.” Also missing… reader comments. The NYT disabled comments on the article from the beginning so that none of their readers could commit Wrongthink and erroneously suggest that Minnesota would be better off without enrichment by Somalis.
The Somalis who defrauded the white say-gooders of Minnesota weren’t Hollywood-style supervillains with IQs of 160. JPMorgan could have discovered precious female entrepreneur Charlie Javice’s fraud by making about 10 phone calls. Ditto for BlackRock and Bankim Brahmbhatt (believed to be back in India now after enriching the U.S. for enough years to obtain U.S. citizenship (FCC filings)). If nobody can be fired then what’s the incentive to perform basic due diligence?
Maybe I am out of step with the rest of humanity. For example, I would have imprisoned the Theranos Board, its attorneys, and anyone who invested other people’s money in Theranos rather than prosecuting and imprisoning Elizabeth Holmes. Believing that a Stanford dropout knew stuff that all of Europe’s PhD chemists didn’t know is criminal-level idiocy in my opinion! I would have sent Elizabeth Holmes out on a speaking tour (not a Hillary-style “listening tour”) where she could tell venture capitalists and money managers that sometimes credentials actually do matter.
To start, from the Chase “Leadership” page:
> Wims Morris holds a Master of Business Administration from the Harvard Business School and a Bachelor of Arts in English from Yale University.
Javice is to Wims, as “precious [Ivy League] female entrepreneur” is to “unicorn Ivy League black fin-grrl”, game-set-and-match properly goes to the latter, as per DEI. I (you can assume my gender is male) got tossed from a banking consulting gig for wearing the wrong pinstripe; the client wouldn’t trust me was the implication. The people we trust our money to have some wack-ass dynamics, yo.
Maybe Javice can get knocked up by a baby daddy and to get a few years knocked off her sentence. Like Liz Holmes, she is a cutie-pie–those eyes, right? Probably what got her believed in the first place.
> sometimes credentials actually do matter
Not really. Javice vs. Holmes, one degreed the other not. (Both are on Forbes 10 Hall of Shame for 30 under 30.)
We will certainly find further guidance on this topic from (if you have a stomach for Russian literature in the current political climate):
https://en.wikipedia.org/wiki/Crime_and_Punishment
where the main character “seeks to convince himself that certain crimes are justifiable if they are committed in order to remove obstacles to the higher goals of ‘extraordinary’ men [sic].” I’d really trust this extraordinary little guy more than anyone mentioned in this post:
https://www.theguardian.com/environment/gallery/2025/dec/05/week-in-wildlife-a-studious-deer-and-a-partying-raccoon?CMP=share_btn_url#img-7
[I look at The Week in Wildlife every Friday, after looking at Phil’s consistently great photography. I try to ignore the cultural nonsense, but like ignoring Liz H.’s pokies, it’s kinda hard.]
Weren’t the Somali’s infamous for their piracy (just a handful)? Seems like that is what they are bringing to the table in Minnesota. Trump was was critiqued in the Liberal Media as saying (paraphrasing), “Somalis are bad people, why don’t they go home and fix their own problems?” The National People’s Radio didn’t mention your minor $1B in fraud in their defense of Somali immigrants. I think the answer to Trump’s question is “Why would they? Why be a tick on a mouse when you can go for a buck deer with all your friends? (Especially when you have approximately 50% of the deer population rooting for you and yours.)”
Phil, thank you so much for another wonderful post!
I found your comment at the end particularly enlightening (“credentials actually do matter”) because it made me think back to my many hours of hard work researching substantive, worldly, and of course ground-breaking, matters for my PhD dissertation and associated degree (my “credential”). There really is no substitute for a credential from a Great University like Harvard, where everyone is an ‘A’ Player. Nothing could have prepared me better to be the Leader of this Great University!
The Somali community accused anyone who noticed the fraud of racism. Just do a news search for “Somali racist” to see the current coverage of Trump’s vicious ‘racist’ attacks on the Somali community.
Now that the fraud is a national scandal, Somalians are making the excuse “the money continued to flow” i.e., all the checks cleared so how were Somalians supposed to realize the cultural differences in attitudes toward fraud?
https://nypost.com/2025/12/02/opinion/minnesotas-somali-scammers-scandal-is-what-happens-when-officials-blindly-believe-the-racism-grift/
Theranos was basically the same grift, but with gender instead of race, at a time when Hillary was being groomed to be the first woman president.
The Board of Directors of Theranos consisted of: Holmes, her boyfriend, two former Secretaries of State, former Secretary of Defense, retired Marine Corps General, retired CEO of Wells Fargo, and retired CDC director. A who’s who of elderly bureaucrats who once presided over corrupt organizations.
All of these are identitarian frauds. The lack of due diligence is the point.
Honorable State Rep. Omar,
Ignore the commenters here who judge you, it is for God to judge, not the extremely-informed, politically-savvy people who read Phil. I don’t see the conflict of interest with you, a Somolian-born Noble Immigrant, allegedly doling out money to your Somali grifter/refugee comrades, just like I don’t see the conflict of interest granting your 3rd (or 4th? I forget) husband contracts.
Ignore the comments about the government leaders doling out welfare money needing to learn about closed-loop systems and feedback. It is expensive to audit how the money is spent, and hasn’t enough money been wasted? Also, there was plenty of Covid-19 fraud by other entities, why shouldn’t the Somalis share the spoils of tricking the American Devils led by the Antichrist Trump, who selfishly provided you sanctuary from the machete squads and European toxic waste in Somalia.
You don’t look like me (few alleged con-women, grifters, Ponzi-schemers, or welfare fraudsters do), but that doesn’t mean I hate you for that. I just might have an extreme distaste for you because you allegedly allowed food to be snatched from the mouths of deserving non-Somalian widows and orphans, probably now freezing on the streets of Minneapolis. Good thing, as Wikipedia neutrally notes, your “father and grandfather emphasized the importance of democracy during [your] upbringing”. That way you are fully informed when you allegedly subvert it. I also read that you got gum put in your hijab at school. In America we say “Thank You” when someone gives us a piece of gum, honey, we don’t make up stories and tattle. I, WASPy 8th generation American, was bullied TOO in American schools for being a geek and got atomic wedgies. In that way, and only that way, we are alike! I don’t force my first and only wife to wear a hijab, but I do ask her to avoid driving in Somalia American neighborhoods by herself.
I’m working all weekend on a startup company, and being so busy that I never heard of you before — we’ll have to leave it at that. Best wishes!
Anyone who criticizes the Somali community is racist! Trump is a white supremacist and Islamophobe!
Also, the money continued to flow. How could we possibly have know that American culture frowns on fraud when all of the welfare checks continued to arrive? If you were against the fraud, you would have stopped payment like the racists that you are!
As for my other sister Elizabeth Holmes (whom I also want to marry!), she was Steve Jobs and Hillary Clinton rolled into one! Wall Street wanted more female led technology founders, and Liz provided.
The Board of Directors of Theranos was the most experience ever, with an average age of 76 (older the most Congresspersons!), and consisted of Liz’s boyfriend, two former Secretaries of State, a former Secretary of Defense, a retired Marine Corps General, a retired CEO of Wells Fargo, and a retired CDC director.
Minnesota is in good hands with its expert witness commuters. Give us the Minnesota blog posts.
JP Morgan also had to pay something like $115 MM toward Charlie Javice legal expenses in the criminal case, even though Javice was convicted. Something the superstars at JPMorgan agreed to in the deal to buy Javice’s fraudulent company.
Ms. Wims Morris gets promoted every two years.
It will be interesting to see what happens to Ms. Wims-Morris. According to them: https://youtu.be/Qd7akdDtPXA?si=lBe3qi1XKqYkbXYd
Auto finance is about to blow up, and not in a good way.
I should have known when Morgan Stanley started trying to sell my mom consumer-credit-based private equity vehicles.
One thing I found really surprising: When the tech startup I used to work for was raising “B rounds” and that sort of thing, the founders described the venture capitalists they were pitching to as very sharp and quite difficult. I remember being sort of shocked to later hear that Sam Bankman-Fried was playing video games and otherwise being rather dismissive while he spoke to them.
In retrospect, I have come to believe that everyone involved knew the whole thing was fraudulent in some way, and the fix was basically in. Either they knew it was a ponzi scheme and just assumed that they’d be out in time, or it was designed from the start to be a vehicle with which to funnel money to politicians and other regulators.
So, maybe the people from your examples didn’t get fired because either. so much of the market is in one way or another fraudulent. or enough of the money got to the “right people” before the scheme fell apart.
In retrospect, I have come to believe that everyone involved knew the whole thing was fraudulent
That everyone already knew about the fraud is the safest bet you could ever possibly make.
The much bigger fraud that everyone also knows about (because the profits get recycled into machine politics) is the SBA DEI pass-through scam; a woman or minority owned small business gets a no-bid contract, and then hires a big firm filled with white and asian men to do all the work at a fraction of the price.
https://x.com/peterschweizer/status/1993503214872735947
> SBA DEI pass-through scam; a woman or minority owned small business gets a no-bid contract, and then hires a big firm
Not just big firms, but yes, even I’ve heard of that one, a variation of the old bait and switch grift — 30 years ago — and I live under a rock. Still, are you sure? At some point, you think the programs would monitor their results. “Are there more minorities and women doing better in the areas we are targeting than when we last checked? No? Cut the program.”
I asked WokeGPT if it thought DEI-pass-through schemes were legal and ethical. It responded that they were probably illegal and for sure unethical because the minorities/women wouldn’t benefit. Who cares? Non-DEI entities are the ones being screwed from opportunity cost, doing still doing the work, and getting paid less. WokeGPT also admonished me to please be careful in implementing such a scheme. I responded, “How dare you call me a potential scumbag? A.I. is the biggest grift of all time.” Then it apologized, and said everyone was doing it, including its own LLM model, so it just assumed I was. Apology accepted, and we’re friends again. [The Host crawls back under his comforting rock of ignorance.]
Not hard to defraud those who want to believe you. A case from Australia:
https://www.dailymail.co.uk/news/article-15333461/mum-iq-NDIS.html
“mum with an IQ of just 71 played key role in ripping off $1million from taxpayers”