[UPDATE, 5/26: POLITICS: NYT's Latest infoUSA Story Looks at Clinton Connection.]
[UPDATE, 5/21: BIZ: infoUSA Responds to the 5/20 NYT Article]
[UPDATE, 5/21: This story is the most-e-mailed story of the last 24 hours on NYTimes.com + photo of former president Clinton with Vin Gupta added below.]
Two desi connections to a sad, maddening investigative story in Sunday's NYT story by Charles Duhigg - "Bilking the Elderly, With A Corporate Assist" - about lonely old people (including a 92-year-old army veteran named Richard Guthrie) being cheated by scam artists. The first connection is in the opening sentence:
The thieves operated from small offices in Toronto and hangar-size rooms in India. Every night, working from lists of names and phone numbers, they called World War II veterans, retired schoolteachers and thousands of other elderly Americans and posed as government and insurance workers updating their files.
The second is the company that is implicated (though not formally charged) in this, infoUSA.
InfoUSA was founded by Vinod Gupta in 1972 as American Business Information with a $100 initial investment. Today it's a "$600-million public company with 4 million customers" and 600 employees. It offers information on 14 million U.S. businesses and 210 million U.S. consumers. On Friday, May 18, 2007, the last day of trading before this story, infoUSA's stock closed at $10.64 (see latest price here).
Gupta,who is still chairman and CEO after all these years, is a well-known Indian-American business executive, philanthropist and Democratic Party donor (he was appointed to the Kennedy Center by Bill Clinton, who also nominated for him U.S. Consul General to Bermuda and Ambassador to Fiji (but never served). Here is a YouTube video about the Clinton Science & Technology Center in a village in India, which Gupta built and Clinton himself inaugurated in 2001 (see Clinton-Gupta photo below). It's just one of several multimillion-dollar donations to education Gupta has made; beneficiaries include the Vinod Gupta School of Management and the Rajiv Gandhi School of Intellectual Property Law at IIT Kharagpur, his alma mater - see a full list at VinGupta.com).
He is so closely identified with the company that the Wikipedia entry for infoUSA redirects to the one for Vinod Gupta (as of this writing; and has been since July 2006 when it was created) and VinGupta.com redirects to a page off infoUSA.com. You can see a "60 Minutes II" interview with Gupta here.
Mr. Guthrie, who lives in Iowa, had entered a few sweepstakes that caused his name to appear in a database advertised by infoUSA, one of the largest compilers of consumer information. InfoUSA sold his name, and data on scores of other elderly Americans, to known lawbreakers, regulators say.
InfoUSA advertised lists of “Elderly Opportunity Seekers,” 3.3 million older people “looking for ways to make money,” and “Suffering Seniors,” 4.7 million people with cancer or Alzheimer’s disease. “Oldies but Goodies” contained 500,000 gamblers over 55 years old, for 8.5 cents apiece. One list said: “These people are gullible. They want to believe that their luck can change.”
...neither that bank nor infoUSA stopped working with criminals even after executives were warned that they were aiding continuing crimes, according to government investigators. Instead, those companies collected millions of dollars in fees from scam artists. (Neither company has been formally accused of wrongdoing by the authorities.)
But infoUSA has also helped sell lists to companies that were under investigation or had been prosecuted for fraud, according to records collected by the Iowa attorney general. Those records stemmed from a now completed investigation of a suspected telemarketing criminal.
- But internal infoUSA e-mail messages indicate that employees did not abide by those standards. In 2003, two infoUSA employees traded e-mail messages discussing the fact that Nevada authorities were seeking Richard Panas, a frequent infoUSA client, in connection with a lottery scam. “This kind of behavior does not surprise me, but it adds to my concerns about doing business with these people,” an infoUSA executive wrote to colleagues. Yet, over the next 10 months, infoUSA sold Mr. Panas an additional 155,000 names, even after he pleaded guilty to criminal charges in Nevada and was barred from operating in Iowa.
- Senior executives at infoUSA were contacted by telephone and e-mail messages at least 30 times. They did not respond."
[You can listen to audio excerpts of chilling phone calls to learn how the scammers deal with elderly folks in this audio feature on the NYT site.]
Here's an excerpt from infoUSA's code of conduct:
infoUSA's commitment to the highest level of ethical conduct should be reflected in all of the Corporation's business activities including, but not limited to, relationships with employees, customers, vendors, competitors, the government and the public. All of our employees, officers and directors must conduct themselves according to the language and spirit of this Code and seek to avoid even the appearance of improper behavior.
[Unconnected to this particular story, Vinod Gupta and the board of directors of infoUSA (which has two other desis out of nine in all, Anshoo Gupta, president of JAG Operations, LLP and Dr. Vasant Raval
professor and chair, Creighton University) are in the midst of a major shareholder battle with Dolphin Limited Partnership, a hedge fund. Here's infoUSA's side of the story, here is Dolphin's (they have a whole website dedicated to this). The last two links include items from as recently as Thursday, May 17, 2007. The NYT's Gretchen Morgenson wrote about the dispute on Aug. 27, 2007, saying, in part, that he "seems not to recognize that he is running a public company and needs to look out for his non-Gupta shareholders."]
Even though India is mentioned in the first sentence of this story, the writer never explains how the crimes happen via India. Anyone familiar this type of scam? Has this been covered in India?
What do you make of all this? Do you know more about any or all of it? Reax? Please post in the comment section below.
APRIL 8, 2001: Former President Bill Clinton greeted by a group of students as he arrives at "The William Jefferson Clinton Science & Technology Center" near Saharanpur, India, the village where Vinod "Vin" Gupta,(left, with sunglasses) comes from. Photo: Jay Mandal/On Assignment (contact for more pix: jay[at]jaymandal.com)
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