NewEgg Accused of Ponzi Scheme Involvement

[AncientNerd]

24 minutes ago, dizmo said:

Yes, but if they were looking at order numbers, then they'd have been given proof.

The thing is that " looking at order numbers" was never enough. We had to show what we were producing and the purchasing paper-trail to validate the costs involved, having something that went from having say a 100% margin to a 3000% margin would raise all kinds of red flags with the auditors/loan officers I worked with. They questioned jumps of 1-5% in gross margin and wanted to know that we could justify it and were not just pulling the numbers out of the air. Because it is one thing to say oh yea we can sell this for $100x and it will only cost us $1x to make, its completely another thing to prove it. And from my experience you have to prove it to the banks, so it wouldn't just be the order numbers that would have to work out right, but the purchasing numbers and they would have to work out as matched with the loan officers experience with the industry. If the bank(s) didn't send loan officers that were experienced with the industry involved and didn't get an outside expert to sanity check the values then the case should be thrown out because of lack of due-diligence. 

[mr moose]

I would have thought if Newegg placed orders for X amount, then that would be the limit of their liability.  Ergo If I promised to buy $100 worth of tee-shirts from LTT,  the best anyone can do is argue I promised to buy stock, lack of stock being provided is not evidence the order was fraud.  Unless evidence exists that newegg would profit from such orders without actually taking any stock, then a motive of fraud doesn't really hold up.

[Crosseyed Sniper]

On 10/21/2017 at 9:56 AM, Misanthrope said:

Yikes. I am fairly glad I always avoid their "Asia direct" or whatever items. It's a common trap on Amazon too: Uncommon item, fairly competitive price, Vendor with no ranking shipping from China. That's about the fastest way to convince me not to buy.

You mean to tell me you wouldn't buy a GTX 1080Ti for $5, even if it was shipped from Big Dong, China? 

 

And yes, I noticed on Amazon not long ago, where some 3rd party sellers were asking you to contact them BEFORE ordering an item. That seems strange right there. Always look for Sold and Shipped by Amazon or Newegg, depending on where you're shopping at.

[vanished]

wow, interesting, and unexpected.  So when does the bankruptcy clearance sale start?

[PlayStation 2]

All these companies caught up in some bullshit.

Seems to be a trend with South Korean tech companies and companies who have associations with them.

[michaelocarroll007]

On 10/21/2017 at 11:54 AM, paddy-stone said:

Seems like 2 different things here to me. IF newegg did falsify documents, then yes of course it could be considered fraudulent behaviour maybe, but the definition of fraud

 

 

 

I can't see where Newegg gained anything from this?  unless the allegation of a kickback is true?, which we don't know and may never know.

 

But the bank still has to take the blame for not checking things properly.. if I were in the business of lending money, I would for damn sure check someone's numbers on their paperwork to make sure they added up, in the sense of double checking with an independent entity or at least the company contact that they had this proposal from. If not. someone could say that he wants to buy a million toasters for 2 billion dollars, and fake an invoice somehow if all they do is look at the piece of paper with a big company's name on it. There must be checks in place to prevent this?  If I missed where they checked with newegg about this business proposal to buy/sell to that company, please enlighten me?

 

 

It stinks of passing the buck to me. But I don't know the full story, so can only guess as to the reason this was allowed to happen in the first place.

Ill take 2 of your $2,000 toasters please. seems likely that youll have a good shot at selling thoese. Let me actually lend you the money to do the business venture.  when something looks sketchy it is. the bank of all people should know this.  Newegg should still get in trouble though if they purposely signed a order contract for a fake price. 

[mr moose]

5 hours ago, Dan Castellaneta said:

All these companies caught up in some bullshit.

Seems to be a trend with South Korean tech companies and companies who have associations with them.

All companies the world over, this is not unique to south Korea.   The aim of the game is to stay financial,  no-one chooses to go down with their ship on moral grounds.

[vanished]

1 minute ago, mr moose said:

All companies the world over, this is not unique to south Korea.   The aim of the game is to stay financial,  no-one chooses to go down with their ship on moral grounds.

well, *no company perhaps.  People have before

[mr moose]

2 minutes ago, Ryan_Vickers said:

well, *no company perhaps.  People have before

I didn't think we needed to qualify the difference between a company that has financial motive as it's prime driver with an ideologist that has some grand vision for humanity self immolating to prove a point. 

[vanished]

1 minute ago, mr moose said:

I didn't think we needed to qualify the difference between a company that has financial motive as it's prime driver with an ideologist that has some grand vision for humanity self immolating to prove a point. 

It never hurts to be specific

[mr moose]

3 minutes ago, Ryan_Vickers said:

It never hurts to be specific

 

The problem is it makes for long detailed posts that people misinterpret. 

[vanished]

1 minute ago, mr moose said:

 

The problem is it makes for long detailed posts that people misinterpret. 

I think they're more likely to misinterpret if it's vague or inaccurate

[dalekphalm]

Interesting allegations.

 

I have no idea if they are true, but I caution people: Do not assume guilt until they are proven guilty.

 

Far too often on this forum, I see people convict a company in the court of public opinion with nothing but hearsay or one side of a story with zero evidence.

 

Lets wait for the courts to sort this out. If true, it says one thing:

Those 10 banks are goddamn incompetent. As bad as scamming them is, they should have never been fooled.

 

I eagerly await new information as the case develops.

[vanished]

1 minute ago, dalekphalm said:

Interesting allegations.

 

I have no idea if they are true, but I caution people: Do not assume guilt until they are proven guilty.

 

Far too often on this forum, I see people convict a company in the court of public opinion with nothing but hearsay or one side of a story with zero evidence.

 

Lets wait for the courts to sort this out. If true, it says one thing:

 Those 10 banks are goddamn incompetent. As bad as scamming them is, they should have never been fooled. 

 

I eagerly await new information as the case develops.

It wouldn't be the first time.  Remember that story about a bank using a second hand consumer-grade router with default passwords?

[dalekphalm]

Just now, Ryan_Vickers said:

It wouldn't be the first time.  Remember that story about a bank using a second hand consumer-grade router with default passwords?

Don't recall hearing that one. But sheesh - I hope whoever set that up (and whoever approved it) were both fired on the spot when it came out.

[vanished]

8 minutes ago, dalekphalm said:

Don't recall hearing that one. But sheesh - I hope whoever set that up (and whoever approved it) were both fired on the spot when it came out.

I've tried searching for it in many ways and can't find it but hopefully someone else recalls it and can link it

[dalekphalm]

35 minutes ago, Ryan_Vickers said:

I've tried searching for it in many ways and can't find it but hopefully someone else recalls it and can link it

Heh well I will read a link if provided.