EPO and the Amgen Tour of California

I have always thought it was odd (perverse may be a better word) that the Tour of California is sponsored by the drug company that markets the performance enhancing drug that has been most responsible for the doping scandals in professional cycling over the past two decades: EPO. That's right, the "Amgen" in the Amgen Tour of California is the company that markets EPO.

The Next Financial Crisis

Harvard economist Jeremy Stein predicts that the next financial crisis will come from a bubble in green energy industry.  Sound familiar?

What about Floyd Landis?

Recently I've written a lot about Floyd Landis' accusations regarding doping in cycling and focused a lot on his claim that other cyclists, including Lance Armstrong, are using performance enhancing drugs and therefore committing a fraud of sorts. However, an email from a friend made me realize that I might also write about who it appears that Floyd Landis is. Here is an excerpt from my friend's email that makes the point pretty clearly:

Fraudbytes is now on facebook

In an effort to make it easier for people to follow our blog, we have created a facebook page.  Check it out here.

Regulation and Fraud

A few days ago I had an interesting discussion with a friend about regulation. He argued that regulation tends to make individuals more likely to fall prey to scams. One of his arguments in particular made me pause to think a little more deeply about regulation and fraud:

More on how cyclists may be cheating

Last Saturday, I posted a short discussion that referenced an article by Edmund Burke on how cyclists can avoid detection while cheating the doping rules. Yesterday's NY Times reports that doctors have figured out how to administer microdoses of EPO to cyclists such as Floyd Landis or Lance Armstrong in a way that avoids detection by the current doping tests. Apparently, this method of administering microdoses works as long as the tests are not administered at night.

Will Lance Armstrong be charged with fraud?

The NY Times reported yesterday that two "authorities" have revealed that U.S. government officials are considering investigating Lance Armstrong on fraud charges. One of the authorities said that they are particularly interested in "whether money from the United States Postal Service, the main sponsor of Armstrong’s team from 1996 to 2004, was used to buy performance-enhancing drugs." If the government could prove fraud, the sentence for committing fraud is generally longer than that of drug distribution.

The article also states:

Signs of deception in Lance Armstrong's denials

There is a vast amount of research on detecting deception by observing how individuals respond to questions. Both verbal and non-verbal signs have been tested and the research suggests that verbal cues are often quite revealing of whether a person is lying.

More on doping in cycling

Edmund R. Burke, has written many books on cycling and has been involved in the science of the sport for decades. In a recent article, Burke restates what I've said on this blog before as he says that as long as there's money (in cycling) there will be fraud (in the form of doping).

How about a legal performance enhancing drink...

After yesterday's post about Floyd Landis and the sad state of affairs in professional sports, I received an offer that is so far into the "too good to be true" category that I had to blog about it. Before I tell you what the offer was, I should give some context.

First, I posted a link to the Wall Street Journal article on Floyd Landis' emails on my Facebook page and had several comments. In the comments, we discussed how these illegal drugs are used to boost performance and have been found to do amazing things such as increase cyclists' power output by 20%. We also discussed how athletes involved in these drugs are committing fraud as I blogged about yesterday on Fraudbytes. One of my friends that was participating in this dialogue made the following comment on his Facebook status:

Fraud, cycling and Floyd Landis

This one is hot off the press. Last night, I received a news alert from the Wall Street Journal (of all places) that Floyd Landis finally admitted to have used illegal performance enhancing drugs as a cyclist. Because I race bicycles as a hobby, this was of interest to me. Not because it shattered any of my beliefs but because he finally admitted it. I posted a link to this news on Facebook and had a former student friend ask me what I think. I thought I'd share it here since it definitely is fraud relevant.

Credit Agencies and Auditors

There has been a lot of press lately about the three credit rating agencies, Moodys, Standard and Poors, and Fitch, and their role in the credit crisis. In particular, some have pointed to the fact that companies hire these credit rating agencies to rate their securities and this creates a conflict of interest that leads to higher ratings. The same criticism has been lobbed at financial statement auditors for decades--especially when there have been some highly publicized audit failures involving undetected fraud. Interestingly, Congress is doing something about this conflict for the credit rating agencies as described in a recent Bloomberg article that says:

What's the difference between a con-man and a politician?

It appears that the answer is "not much," at least in the case of the former NY State Senator, Efrain Gonzalez, Jr. They both attempt to build confidence in themselves and it appears that many people vote on how well someone can speak persuasively but that's another story for another blog...

Click here to read more about Efrain Gonzalez, Jr....

To What Extent Should We Bail Out Madoff Victims?

For some time now, I've been thinking about the extent to which victims in a Ponzi scheme such as the Madoff scheme should be bailed out by the government. Given the attention in Congress to reform the regulatory environment of the U.S. financial industry, I think this is a timely topic. Also, I've heard many complaints of Madoff investors who think the government should do more for them. (These complaints have been voiced in both the comments on this blog and in the news). To what extent should the American taxpayers help victims of Ponzi schemes? I know this will be a controversial topic but maybe it will generate some comments. I hope you share your thoughts in the comments!

Rating Agencies and The Great Recession

There is a provocative editorial in Saturday's NY Times that criticizes Moody's, Standard and Poor's and Fitch for their role in rating the subprime residential mortgage-backed securities and C.D.O.’s that turned toxic and led to the failure of numerous financial institutions. The article states that these securities were rated as AAA investments or as safe as U.S. Treasury Bonds! It also argues that the fees paid to the rating agencies create an independence problem akin to auditor independence issues. It's interesting that this significant "assurance service" is rarely scrutinized and has managed to stay out of the spotlight even during this current economic meltdown where they were heavily involved.