[jakubp]

I wonder... what's the actual crime here? I don't know how US law works. In my country there is no "bribe" in the private sector, it's probably still not allowed in some cases (certainly publicly traded companies), but I'm assuming Netflix wasn't a public company during that time. Can someone explain?

If a director is given freedom to make certain purchasing decisions on behalf of a company (private company at that point, I assume), why specifically is it a criminal offense in the US to be rewarded money for it? (I don't mean money laundering i.e. hiding source of income, I mean the actual "bribe")

[Edit] I did just find out that my country also has "management bribery" as a criminal offense within the private sector.

[sgt101]

I believe that as an employee of a company charged with setting up relationships to support the delivery of revenue you have a duty to fairly and openly select the offers that are in the best interest of your employers without considerations for yourself.

If you accept considerations for your own interest - like payments or offers of subsequent employment and so on, then you are defrauding your employers. Since the payments mean that effectively there is a transfer of money from your employer to the contractor and then to you I believe that this is also a kind of theft.

At the least, it's dishonest - unless your employer understood you were doing it - in which case it's a kind of hidden remuneration I guess.

[lars512]

It would be tax evasion at minimum, unless you declared everything in your tax return.

[lstroud]

I’m not sure he was a c-suite executive. So, likely no fiduciary responsibility.

[praptak]

In most countries there are laws for dealing with breach of trust, which covers all kinds of damage that a person can do when hired to manage someone else's company.

So my guess is that while bribes in private sector are not illegal per se, you can still go to jail for the decisions made as the result of taking the bribe.

[colechristensen]

In california at least, private sector bribery is explicitly a felony.

On the federal level you get charged for using mail or telecommunications to lie for financial gain or for hiding the source of the money.

[capableweb]

It might give you a better overview to go straight to the source: https://www.justice.gov/usao-ndca/pr/former-netflix-executiv...

It outlines that Michael Kail was convicted of wire fraud, mail fraud, and money laundering, so it seems the "preference of products for payments" was just a small piece of the puzzle here.

[enkid]

He was defrauding his own company by rigging the selection process. The kickbacks are explicitly stated as the core of the case on the DoJ site.

[1_person]

Frankly, being convicted of wire fraud, mail fraud and money laundering might as well be an acquittal.

The wire fraud and mail fraud statutes are written to be vague enough that basically existing is a violation, money laundering is existing with money.

If they had real crimes they would have charged them, this is just some "because I don't like you" political bullshit.

[rsynnott]

... Wait, are you suggesting that everyone is doing fraud and six figure money laundering?

[enkid]

Are you saying he didn't commit a crime or he shouldn't be held legally responsible for what he did? I don't see how your view is consistent with anything else.

[michael1999]

There are many jurisdictions where this would be a tort, not a criminal matter. Being sued into the ground is another way to be held legally responsible. It is a reasonable question if this is the best use of scarce criminal justice resources.

[cutemonster]

Enough people like him could damage and eventually destroy many American companies, I'd think. That'd create unemployment and weaken the country, so seems to me it's something worth to try to stop and discourage, from the DOJ's point of view, even if the company doesn't want to sue? Netflix even withdrew their lawsuit -- but then the DOJ continued anyway (if I understood correctly) good that they could do that I think

[1_person]

I don't really know enough about what happened to have an opinion on it, and neither do you, but the media's told you to hate him, so here we are I guess.

Moving on, what I actually said, and what I actually meant, was that those laws are incredibly vague and have been used to convict more or less everything under the sun except actual wire or mail frauds.

If a conviction involves only wire, mail, and money laundering charges then it is because the only guilt that could be proven was axiomatic.

Pardon me for pausing a moment to ponder before picking up a stone and joining you.

[enkid]

So, you admit there is such a thing as wire and mail fraud, and those laws should exist, and yet if someone is convicted of those crimes it is automatically because they couldn't convict them of another crime. And you don't know enough about this case to make a judgement and yet the only reason they convicted this person of this crime is because it is "axiomatic." You aren't convincing me these are bad laws from this argument.

[1_person]

I'm not trying to, either.

Read the laws or remain ignorant, I don't care.

[colechristensen]

In the US legal system individual states and the federal governments both have enforceable laws. This case was federal and it boils down to “fraud” of a few types which comes down to lying for financial gain and “money laundering” which involves hiding the source of money.

California though (but it doesn’t seem this was charged by the state) explicitly has a law criminalizing commercial bribery where if you take money secretly and privately to make a decision at your job, you have committed a felony.

[rlpb]

> "When an inquiry from the Netflix CEO ensued, Kail falsely denied that he was formally working with Platfora. Kail resigned from his advisory position at Platfora the next week."

Apparently he lied to the CEO for personal financial gain. That's fraud, isn't it?

[meepmorp]

> I wonder... what's the actual crime here? I don't know how US law works.

Fraud and money laundering - it clearly says so, in the second paragraph in the article:

> Michael Kail, the ex-Netflix executive, was convicted by a federal jury of wire fraud, mail fraud, and money laundering.

[jakubp]

My point was I didn't understand why making a decision that gives a manager an extra (hidden) benefit is a crime - i.e. it's not money laundering (money laundering is misrepresenting the source of money, right?, and "wire fraud" and "mail fraud" is too elusive to me - it's a name, not an explanation of the nature of the wrongdoing :)

It's clearer now.

[Hamuko]

The article says "wire fraud, mail fraud, and money laundering". So basically he used telecommunications/the Internet and the US postal system to defraud his employer, and then laundered his dirty money (I assume using the family trust mentioned in the article).

[lodovic]

Was wondering the same thing. The article mentions the suit is Netflix vs the exec, so this will at least be breach of contract.

[jeffbee]

There may indeed by a Netflix vs. the exec, but this article is United States vs. the exec. Fraud is a crime. Wire/mail fraud is a federal crime.

[jeffwilcox]

Their standard employee agreement must include a set of clauses relating to conflict of interest.

[Mauricebranagh]

Actually in Anglo Saxon employment law its very "naughty" as lawyers put it :-)

[bryanrasmussen]

it looks like the crime is not so much that he accepted bribes but how he did it.

For example if a company came and gave him §10000 in hand and he reported in on his taxes he would probably be alright but reading the article I can see he was found guilty of multiple cases of money laundering - like you indicated that is against the law not the 'bribe' per se, furthermore he got convicted of fraud - I think because as it says

"To facilitate kickback payments, the evidence at trial showed that Kail created and controlled a limited liability corporation called Unix Mercenary, LLC," the DOJ said. "Established on February 7, 2012, Unix Mercenary had no employees and no business location. Kail was the sole signatory to its bank accounts."

So basically the company he created was involved in fraudulent activities.

There may be other forms of fraud involved here - for example if he said to Netflix I think we should use X because it is the best but he actually wants to use X because he is getting 10000 for it - I could envision a law being written in such a way that it could be interpreted as him defrauding Netflix of 10000 worth of value.

on edit: I can also see in the article it says "When an inquiry from the Netflix CEO ensued, Kail falsely denied that he was formally working with Platfora. Kail resigned from his advisory position at Platfora the next week." so he explicitly stated he was not doing something while getting value for doing that thing - that would generally be considered fraudulent.

[enkid]

You can't lie to your employer about receiving money from another company in exchange for preferential treatment. That's the definition of fraud. So, yes, receiving the bribes was absolutely illegal

[bryanrasmussen]

>You can't lie to your employer about receiving money from another company in exchange for preferential treatment.

but can you receive money from another company for preferential treatment and when asked by your employer say yes, I did it? If you can do that then can you lie by omission? I think these things might depend on the jurisdiction, but I guess this was federal so easier to figure out.

[conanbatt]

But is that money laundering?

[throw_m239339]

> But is that money laundering?

fraud isn't money laundering, however cashing out fraudulent gains by using a corporation is the textbook of money laundering.

> Kail set up a corporation to receive bribes from Netflix contractors, the DOJ said.

The article is quite clear about that.

[jjeaff]

It is if you try to disguise the source of that bribery income as something else in order to declare it as income.

[gambiting]

Yeah I don't think there's a crime here, not in a legal sense. I work at a large software company where doing this is prohibited by contract and you can be dismissed due to it, but I'm not aware of any legal problems outside of this.

[khuey]

At least in California this is "commercial bribery" which is a crime. https://law.justia.com/codes/california/2011/pen/part-1/639-...

[Mauricebranagh]

The US and most countries have very strict anti bribery laws

[gambiting]

For public sector, absolutely 1000%, very illegal.

However, please point me to a law that says it's illegal to give a gift from one private company to another for any kind of advantage.

[throw_m239339]

> However, please point me to a law that says it's illegal to give a gift from one private company to another for any kind of advantage.

Company B,Z or X didn't gift Netflix, they gifted a Netflix employee who then defrauded the company he worked for of its money, in exchange for these personal gifts and money. The "defrauding" part is his hierarchy not being aware of that arrangement.

It's called fraud and it's illegal. It's so illegal it is a federal crime.

[MaxBarraclough]

> It's called fraud

Is it really just counted as fraud in the US? Here in the UK, bribery is a different offence from fraud.

[hulitu]

Yes , but when bribery takes the form of lobbying those laws are useless.