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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 378.35

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Nov 10 4:00 PM EST

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From: dybdahl	12/7/2008 3:24:23 PM
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IT Factory collapses. Although this is not a globally big story, it is interesting in several ways: techcrunch.com In very short: - CEO steals at least $150 million and runs away, and then turns himself into the police in California - Non-existing data centers were invoiced and leased, so that the company "IT Factory" seemed like a successful, fast growing company, but in reality, banks were sending a lot of money to fake companies that they will never see again. - The fake turnover was made through IBM as a reseller, making things look very credible. As far as I see it, the scheme involves several interesting things: - The financial crisis may have been the factor that triggered the revelation. - It could only be hidden from the owners because they were selling software that is obviously hard to understand. Many who understood the software didn't understand how they could make money, but those in charge of the money didn't understand the software guys. - The banks who lost money relied on risk ratings from others, they did obviously not make their own investigations or judgments. For instance, some of the fake invoices are about non-existing products and could easily have revealed the scam. - The CEO says that he has been under extortion for 4 years by others and was forced to do this. If that is true (which is very uncertain), then I wonder who those people were (russian mafia?), and whether they have got the money now. But even more important: How many other companies in the western world have they successfully managed to exploit in the same way, in other countries?

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