'Banks Are Not Your Friends'
This Week In Blunders – May 4-10
Alex Mashinsky, the CEO of Celsius Network, wore a T-shirt that read: “Banks are not your friends.”
Some friend he turned out to be.
The crypto klepto told customers that banks were untrustworthy and greedy. Then he left them financially broken while he walked off with $48 million.
On Thursday, the court sentenced Mashinsky, 59, to 12 years in prison for fraud and market manipulation.
He joins a pantheon of blockchain blockheads sent to cellblocks, including FTX founder Sam Bankman-Fried, Terraform Labs founder Do Kwan, and Binance founder Changpeng Zhao.
Mashinsky touted Hoboken, N.J.-based Celsius Network as the safest place to bank your digital currencies. You could deposit your bitcoin and earn interest rates as high as 18% – at least until this massive grift filed a $4.7 billion bankruptcy in 2022.
More than 200 victims filed letters with the court. They’re cautionary tales for anyone trying to find an edge in a world full of swindlers:
“Alex Mashinsky preyed upon the lowest hanging fruit – yearning people in need of financial success – which is why so many people were hurt by his actions. Myself included. … Thousands of us are left scrounging and praying ...”
“I was emotionally devastated into darkness followed by the shame of confronting all those I had convinced to invest in Celsius … My will to live remained only because I was a father to triplets and was responsible for their well-being.”
“I lost my apartment, I could no longer help my very sick mother, I had to liquidate everything else I owned just to scrape by. I literally had to ‘camp’ out of my vehicle for nearly a year until I could begin to get back on my feet. The suffering, depression, humiliation & despair was far beyond any jail term.”
“Celsius didn’t just take my money; they stole my stability, my dreams, my family. . . It is crucial to understand that Mashinsky’s didn’t just affect our finances; they destroyed lives. He portrayed himself as someone we could trust, but his greed led us all to unimaginable suffering.”
“I am a retired school teacher and I was counting on my cryptocurrency holdings to fund my retirement and to pass on to future generations. Mr. Mashinsky has changed my financial trajectory and that of my family. He will never understand the damage he has done to me and other victims.”
Sometimes you have to ask yourself what would Bitcoin Jesus do?
This credit union wasn’t your friend, either
Kelly Jo Muzzana, 40, managed the fraud-alert process at the Altana Federal Credit Union in Billings, Mont.
She must have thought it was a perfect cover while she created duplicates of customers’ bank cards for her shopping pleasure. She racked them up at Target, Walmart and other retailers – and when the fraud reports rolled into her office, she handled the claims.
On Thursday, she received a year and a day prison sentence and a $65,000 restitution order. She could have gotten as much as 30 years, but perhaps since she agreed to plead guilty last year, prosecutors gave her extra credit.
Kill the story, not the reporter
At the New York Times, a reporter has reportedly complained to HR that his editor threatened to kill him and then herself – with a gun.
Perhaps she was just being a little prosaic. Or perhaps he was being too sensitive.
It just goes to show that the good ol’ days of menacing your subordinates are gone. Supervisors need to watch how they manage their employees or they might just spark a viral conversation that embarrasses the whole operation.
I used my social media accounts to ask my journalism colleagues what they thought of of this newsroom debacle. Here are some of their responses:
“My college newspaper once had an editor who would light a 2x4 on fire and wave it over the heads of reporters who were missing their deadlines.”
“Grabbed by the throat once. I might’ve deserved it.”
“Had a gun waved at me in the editor’s office.”
“It’s usually the reporter who wants to kill the editor.”
“No editor ever threatened to kill me. They knew I’d shoot back.”
“Homicide threats typically come from the news desk, directed at the editor who's holding up copy on deadline. Just routine.”
“Well, YOU were my editor for many a story I turned in. I can't remember you ever threatening to kill me and/or yourself, but I do recall that once, you turned to me during the editing process, and said, ‘You just can't polish a turd.’”
“I think I might have threatened to kill you a time or two.”
“At my first job as a reporter, judging from how the editor called me, I thought my first name was “Goddammit.’”
“We are talking about a profession that has ‘deadlines’ and ‘kill fees.’”
“And if you want an old story … just check the morgue.”
“I raised my voice to a staff member three times during my career as an editor and deeply regretted it each time. They were just honest moments of frustration and disagreement that can happen among human beings. ... I can't imagine the idiocy required for an editor to truly threaten someone (or even joke about it). Oh wait a minute – yes, I can. I’ve been threatened three times by editors.”
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https://www.justice.gov/usao-edwa/pr/washington-jury-finds-spokane-valley-couple-guilty-fraud-charges-connection-covid-19
https://www.justice.gov/usao-sdny/pr/former-new-york-city-real-estate-developer-charged-defrauding-investors#:~:text=FBI%20Assistant%20Director%20in%20Charge,portrayals%20of%20his%20business's%20reputation.
https://www.foxnews.com/us/disgraced-lawyer-michael-avenatti-seeks-mercy-resentencing-citing-model-inmate-record
Never threatened by an editor. Never threatened anyone as an editor, at least not with bodily harm. As a crime reporter, you may recall, our view was: "If your life isn't being threatened at least once a week, you aren't doing your job..." Have had my life threatened, not by editors - who only threatened my livelihood. Though you may recall one editor from our Amarillo days who said to me once: "You, too, can be replaced by a football. I can get anyone I want to kick around here."
I have trouble with sympathy for bitcoin's voluntary "victims". It's such a blatantly obvious swindle. I guess my life experience hardened me to this particular swindle. I was a bookkeeper for many years, then a programmer for the latter half of life. I could see instantly that bitcoin was NOT a ledger, it was just an abstract computer array without any foundation in actual value or transactions. When you bought a "coin" you were simply buying one element of an array, one row of a spreadsheet. Who would pay for that?