Break It 'Til You Make It
This Week In Blunders – July 20-26
“If you must break the law, do it to seize power: In all other cases, observe it.” – Julius Caesar
Skirting laws to launch a business has been a common business strategy in the digital age.
Airbnb evaded zoning, hotel and tax laws. Uber dodged taxi regulations. Tesla said to hell with state auto dealership laws. And Lime and Bird littered sidewalks across America with electric scooters, violating public right-of-way laws and safety codes.
This break-it-’til-you-make it strategy has resulted in welcome revolutions, but unless you can afford to pay millions of dollars to lawyers and lobbyists, it does not alway work out.
On Tuesday, a federal judge issued final judgments for five guys who ran an illegal streaming company called Jetflix that offered access to 183,285 TV episodes for $9.99 a month.
Not even Netflix, Hulu, Vudu, Amazon Prime, or any other licensed streaming service offers this many shows.
Jetflix used software to scrape shows from pirate websites around the world. It became a one-stop shop for stolen entertainment.
For many customers, it solved the problem of having to subscribe to too many streaming services.
Popular offerings included plenty of shows that portray humanity at its worst: “American Horror Story,” “Breaking Bad,” “Game of Thrones” “Shameless,” and “The Walking Dead” – to name a few.
Jetflix launched in 2007 and it wasn’t shut down until 2019, despite receiving its first cease-and-desist letter from the Motion Picture Association in 2012.
Prosecutors said CEO Kristopher Dallman, 42, personally made millions while his company committed a conservatively estimated $37.5 million worth of copyright infringement.
He was sentenced to 84 months in prison. Plenty of time to catch up on shows.
UnitedHealth finally admits it’s under investigation.
UnitedHealth Group finally admitted this week that it’s under criminal investigation in a surprise move to no one.
In May, the health care giant’s CEO Andrew Witty made a sudden and unexpected exit. A day later, The Wall Street Journal reported that UnitedHealth Group is “under criminal investigation for possible Medicare fraud.”
The company (which is the parent of health insurance company UnitedHealthCare) responded in a press release, saying that it had not been notified by the Justice Department and called the report “deeply irresponsible.”
What’s “deeply irresponsible” is having highest patient denial rate in the industry. What’s “deeply irresponsible” is handing your shareholders a 44% stock price plunge this year. What’s “deeply irresponsible” is defrauding the U.S. government, if that’s what this investigation ultimately shows.
What are they afraid of at UnitedHealth? Ending up in the same cellblock with Luigi Mangionne?
Meanwhile, Mangionne, who has pleaded not guilty to gunning down UnitedHealthCare CEO Brian Thompson in December, has inspired a musical.
After an extended run in San Francisco, the producers of “Luigi: The Musical”, hope to expand internationally.
“We are hearing from the audiences that the show helps them process our current society,” Caleb Zeringue, an executive producer, writer and actor in the show, told the San Francisco Chronicle. “We want to give more people the chance to see it.”
Everyone at UnitedHealth is welcome to sing along while the Justice Department does its thing.
Florida Man gets 60 months for dodging taxes
An update: The Miami tax-dodger, who Business Blunders covered in March, received a five-year prison sentence on Wednesday for hiding more than $20 million at five different Swiss banks, including UBS, Credit Suisse, Bank Bonhôte, and Bank Julius Baer.
Brazilian-American businessman Dan Rotta, 78, made his fortune importing Seiko watches, but he never made the time for the IRS.
“There was no low to which Dan Rotta would not descend to in order to cheat the government of the taxes owed,” prosecutors said in a sentencing memo.
Rotta should have known this was coming since investigators have been cracking down on offshore bank accounts since 2008. Among the Justice Department’s big wins:
In 2009, UBS reached a deferred prosecution agreement and paid $780 million for helping ultra-wealthy Americans hide assets from the IRS. As part of the deal, UBS agreed to rat out its tax-cheating customers.
In 2013, private Swiss bank Wegelin was ordered to pay $58 million for helping U.S. taxpayers hide $1.5 billion in the first-ever sentencing of a foreign bank.
In 2014, UBS Group AG, paid a $2.6 billion fine after pleading guilty to helping thousands of Americans evade taxes.
In May 2025, Credit Suisse, which UBS acquired in 2023, pleaded guilty to hiding more than $4 billion from the IRS in at least 475 offshore accounts.
The lesson here is clear: Once your Swiss bank gets busted it’s only a matter of time before Uncle Sam finds your illegal stash.
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