More evidence on Lance Armstrong

Sports Illustrated published a column today that discusses how the information that Floyd Landis recently provided about how riders get away with doping may change things at this year's Tour de France. For example, Floyd explained how riders combine blood transfusions with micro-doses of EPO at night to boost their red blood cell count and to keep the number of immature red blood cells within normal ranges. The blood transfusions increase the number of mature red blood cells and the EPO produces an increase in the number of immature red blood cells. Because the amount of EPO is small, the tests for EPO show normal levels after a few hours. As such, if riders are not tested in their sleeping hours then they appear to be clean.

The Sports Illustrated column gives more details about Floyd's revelations than I've seen before. For example, it says that Floyd claims that his Phonak team owned a Sysmex machine that he learned to use to monitor his blood count levels. Imagine that--Phonak provides their riders with a sophisticated medical device for blood monitoring! These guys are serious!

One interesting point that the article makes is that the rigor of the Tour de France is such that hemoglobin counts should decline over the race period. Thus, if a rider's hematocrit levels don't decline over the 3-week race period, it's an indication that he is doping. Here is a quote:

Supreme Court gives challengers of the PCAOB an empty victory

The WSJ and other news outlets are reporting that the U.S. Supreme court ruled that the PCAOB is unconstitutional. From what I can tell, the ruling basically changes the structure of the PCAOB so now directors can be fired at will instead of "for cause" as before. In any case, the news reports are saying that the PCAOB can continue operating as is. The main change is that the directors have less job security. Talk about anti-climactic!

Strategic Fraud

Fraudsters go to great lengths to structure their fraud around regulators, auditors, and other interested parties to avoid detection.  Such is the case with an online scam that was recently disrupted by the FTC.  Scammers set up over 100 fake companies and then submitted fictitious transactions to credit card processors.  The transactions were structured to be inconspicuous to the owners of the credit cards--transactions were usually between $0.25 and $9.00 and many of the fictitious companies had names similar to legitimate companies.  Per the FTC, the fraudsters charged 1.35 million credit cards a total of $9.5 million, but only 78,724 of these fake charges were ever noticed.  (via Macworld) 

Ethics Optional

What good is a public code of ethics ending in a provision saying:

From time to time, the firm may waive certain provisions of this Code.

Sounds pretty shady, right?  At a minimum such a provision seems odd--why even publish a code of ethics when you acknowledge that the code is non-binding?  Actually, these kind of cop-out statements are pretty common for companies who publish their code of ethics.  The above disclosure comes from Goldman Sachs and similar clauses can be found in codes of ethics of companies like Exxon Mobil.  The Motley Fool has a great article discussing these clauses.  Here is one paragraph I particularly enjoyed (referring to waivers of a firm's code of ethics):

Davis, California's CG

If you ever go to Davis, California, beware of "The Crying Girl" (aka The CG) who will tearfully plead for $37 or so for a train ticket to escape an abusive boyfriend. According to this NY Times article, she's been running this racket long enough in Davis that many of the citizens have caught on and are not happy about it! Apparently, she is very convincing as all good "con men" or con girls are. Hey, if you can turn on the tears at will, why not make a few bucks while you're at it?! If I were her agent, I'd suggest she go to a new market. Maybe Chico? Watch for her show to be played at a town near you...

The career path of a convicted fraudster: Jack Abramoff

The NY Times reported this week that former lobbyist, con man, and convicted fraudster, Jack Abramoff, completed 3.5 years of prison and is now working in a pizza shop in Baltimore, making less than $10 per hour. The article suggests that management subscribes to the marketing philosophy that "There’s no such thing as bad publicity." Maybe so but I would hesitate to give him access to the cash register...

Skilling and the Supreme Court

The WSJ just reported that the U.S. Supreme Court has ruled that at least part of Skilling's conviction in the Enron fraud case needs a closer look. The article is quite short right now but the key quote is as follows:

The justices sent the cases back to two different lower courts to determine whether portions of Skilling and Black's convictions should be thrown out.

An AP news release explained further that:

More doping among amateur cyclists.

The Giro d'Italia (aka the Tour of Italy) is one of the biggest stage races in pro cycling along with the Tour de France and a few other races known as the "grand tours." In an amateur version of the race, known as the Baby Giro, the organizers have gone to great lengths to encourage the riders to avoid any form of doping. An article in Velonation reports that the leading team in this year's race was caught running a serious doping operation and was immediately kicked out of the race. Here are a few quotes:

A free lunch without a catch...

I'm a firm believer that there are no free lunches in this world. However, here's one that may be an exception to that rule. The Utah Division of Securities and several other organizations are sponsoring a free conference on how to avoid becoming a victim of fraud. Those who register also get a free lunch!

Topics for the conference include such things as affinity fraud, Ponzi schemes, the psychology of fraud perpetrators and fraud victims, and common markers of fraud. In addition, one of the sessions I'm most interested in is hearing from Carolyn Jessop who escaped with her five children from a polygamous sect. She has written two books documenting her experiences and has been a guest on the Oprah Show and Good Morning America. She will be speaking on "How to say no when everyone around me is saying yes."

The conference is on June 30th from 8:30 am - 4:30 pm. They asked me to be on a panel session from 10-11 am. See you there!

The legal implications of Floyd Landis' accusations against Lance Armstrong

Sports Illustrated has a good article written by a law professor that outlines the legal implications of Floyd Landis' accusations against Lance Armstrong. The government, under the FDA, is investigating Armstrong's role in various criminal activities. The article discusses potential crimes that Jeffrey Novitzky's investigation could charge Lance with. The author also discusses the statute of limitations, Kristin Armstrong's obligations and whether Lance could sue Floyd for slander.

More on the cycling mafia

After posting yesterday about Tyler Hamilton's comments about a pro-cycling mafia, a friend emailed me the following comments that I think are interesting:

A pro-cycling mafia?

About 20 months ago, VeloNews posted an interview with Tyler Hamilton. Tyler was found to have doped and was suspended and then tried to return to cycling but had limited success in doing so. This interview is interesting because Hamilton refers to a "cycling mafia." Here is a quote:

More on the Lance Armstrong fraud investigation

I read an interesting analysis of who, in pro cycling, is likely to talk to Jeffrey Novitzky as he investigates the doping/fraud allegations against Lance Armstrong. The analysis names many top cyclists and others who will likely cooperate including Frankie Andreu, Jonathan Vaughters, Tyler Hamilton, Lance's ex-wife, Dave Zabriskie and others. Interestingly, he says that Levi Leipheimer is likely to crack down emotionally when confronted. He also lists and discusses those he doesn't expect to talk including George Hincapie.

One of the most interesting parts of the analysis is a link to an article that documents an IM exchange between Frankie Andreu and Jonathan Vaughters as they discussed doping among the pro cyclists including Lance, Floyd Landis and others. I've extracted some of the exchange below.

The latest commentary on Landis and Lance

Dick Pound, former Olympic swimmer, is known best as the Inspector Clouseau in the professional cycling community. Pound was appointed to run the World Anti Doping Agency (WADA) for nearly ten years after WADA was formed in response to the huge doping revelation in pro cycling known as the Festina scandal. Yesterday, VeloNews published an interview with Pound where he commented on the latest doping news regarding both Floyd Landis and Lance Armstrong. Here are a few quotes:

Fraud alert: LifeLock is a joke! (A bad one too...)

Have you ever seen the ads for LifeLock? They are the company that posted the social security number of its CEO, Todd Davis, on a truck and claimed that they could protect you from identity theft with a $1 million guarantee. They did the same in TV ads, until the FTC accused them of false advertising and made them pay $12 million earlier this year. An article in CNN/Money states:

Motorized doping: What will fraudster-cyclists think of next?!

Just as in financial fraud, cheaters in sports are constantly innovating and finding new ways to beat the system. In baseball, they not only have been found to use steroids but they also have been known to put cork in their bats. In cycling, the methods we have known about have been largely biological using performance enhancing drugs. Word has it that cyclists have starting using their version of corked bats. If so, I'm totally appalled and disgusted!

Rumor has it that the latest method of cheating in cycling is to put an electric motor inside your bike frame and to use it to get an extra 100 watt power boost when the EPO and steroids are just not cutting it. When my brother sent me a Youtube video that details this "motorized doping" (see below), I thought it must be some sort of joke. Is this video some sort of hoax or what?!