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Waste Of The Day: Alleged Data Center Fraud

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3 weeks 3 days ago
Waste Of The Day: Alleged Data Center Fraud

Authored by Jeremy Portnoy via RealClearInvestigations,

The Securities and Exchange Commission paid $10.7 million to store its electronic data at a Maryland facility that was allegedly certified by a company that does not exist.

AiNET Corp. and its former CEO Deepak Jain recently agreed to pay $1.8 million to settle allegations that they violated the False Claims Act by knowingly defrauding the government. The settlement does not contain an admission of guilt.

Key facts: When the SEC began looking for a new data center in 2012, it required applicants to have a Tier III certification. That means the data center is fully operational even when undergoing maintenance.

Jain submitted paperwork to the SEC showing that AiNET had been certified by the company Uptime Council. No such company exists.

The Department of Justice later alleged that Jain wrote the certification letters himself, and that nobody had ever inspected AiNET's data center. Jain allegedly purchased a web domain for Uptime Council to make it appear like a legitimate business.

The name also closely resembled the Uptime Institute, a legitimate company that certifies data center infrastructure.

When SEC employees toured the facility before signing the contract, an AiNET employee allegedly prevented them from viewing infrastructure that would have shown the center did not meet the claimed standards.

The SEC later experienced issues involving security, cooling and power and spent additional money and resources addressing them.

When the SEC requested a new certification in 2017, Jain allegedly drafted another Uptime Council letter stating that the center had been reinspected. Prosecutors claimed no inspection occurred.

The SEC stopped using the facility in 2018. Prosecutors allege that Jain was still advertising the data center's false certification to private customers as of 2024.

Jain's attorneys previously maintained that AiNET fulfilled the contract and that no SEC data was lost or compromised.

Summary: An independent certification is not much of a safeguard when the contractor allegedly creates the certifier himself.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

Tyler Durden Mon, 09/14/2026 - 20:05
Tyler Durden

"I'd Be Okay With That": Trump Says He's Open To Chinese Automakers Building Cars In US

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3 weeks 3 days ago
"I'd Be Okay With That": Trump Says He's Open To Chinese Automakers Building Cars In US

In comments that most people missed on Friday, President Donald Trump suggested that he's open to letting Chinese automakers build cars on US soil. 

The new cars unloaded from the BYD Changzhou ship at the Zarate Port on the Parana River in Zarate, Buenos Aires Province, Argentina taken on Jan. 19, 2026. Tomas Cuesta / AFP via Getty Images

Speaking with Fox News, Trump said that while he wouldn't allow Chinese cars to operate in the United States because the US market would be overrun - he might be open to manufacturing them here. 

"We don't allow his cars into the United States, and I never did," he said, referring to Chinese leader Xi Jinping, noting that then-President Joe Biden had kept his policies on Chinese cars. 

"If China wanted to come in and open a plant to build their cars here, I'd be okay with that. Japan does it, but they hire our people. The big thing is they hire our people," he continued, adding "What I don't want is them to build in Mexico and just ... build it inexpensively and ship it across the border."

As The Epoch Times notes further, a regulation imposed by the Biden administration in early 2025 effectively bans all Chinese automakers from selling or building passenger vehicles in the United States. Washington also maintains more than 100 percent tariffs on Chinese electric vehicles.

Trump's remarks came ahead of Xi's planned visit to the United States later this month. The president said on July 23 that he would discuss artificial intelligence with the Chinese leader during the visit. The two leaders last met during Trump's visit to Beijing in May, where Trump formally invited Xi and his wife, Peng Liyuan, to the White House.

The Alliance for Automotive Innovation, a Washington-based group representing major U.S. automakers, on Sept. 3 urged Congress to permanently ban the sale, import, and manufacture of Chinese-connected vehicles, hardware, and software before the current congressional session ends.

"Right now, Chinese automakers are dumping subsidized vehicles with connected software and hardware around the world," John Bozzella, the group's president and CEO, said in a letter to the congressional leadership.

Bozzella warned that China is gaining market share in Europe, Australia, Southeast Asia, Mexico, and South America with vehicles that can collect, process, and transmit "sensitive vehicle and consumer data to the Chinese Communist Party."

It hasn't happened yet inside the United States, he said. He urged lawmakers to act quickly, given the scale and urgency of the threat.

Reuters contributed to this report.

Tyler Durden Mon, 09/14/2026 - 19:40
Tyler Durden

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