December 6, 2011

Government Sets a Thief to Catch... a Business

Justin Katz

Yes, the story isn't as simple as a gut reaction allows, but broken down into a summary, this story feels like a cautionary tale of the leviathan state:

David Whitaker's cooperation with the Google investigation was called extraordinary several times during his sentencing [for Internet fraud crimes] in U.S. District Court in Providence. Assistant U.S. Attorney Andrew Reich said that because of the probe, millions of Americans have been protected from rogue online Canadian pharmacies advertising prescription drugs through Google's AdWords program. ...

After his arrest, Whitaker disclosed to investigators that he had been selling prescription drugs online in Mexico with the help of Google's AdWords program, Reich said. Whitaker described how he developed relationships with Google employees who allowed him to place ads for drugs obtained from overseas without a prescription, Reich said.

Whitaker helped investigators construct phony websites that purported to sell the drugs, officials said. Then, an undercover investigator would tell Google employees who were creating the advertising for the products that they were manufactured overseas and did not require customers to have a valid prescription, officials said.

Ailing people seek legal drugs sold in Canada because U.S. government regulations (among other things) drive up the cost in their own country. Canadian pharmacies advertise on the World Wide Web, and American customers follow those links and purchase their products. So, the U.S. government enlists a criminal to help set up essentially a scam designed to relieve Google of $500 million. (Funny how, in the context of government spending, that hardly seems like a significant amount of money.)

Somehow, I can't help but think of some of our government's other activities that have been in the news lately, such as this one (although, at least in this case, the targets are criminal organizations selling drugs that are illegal with or without prescription):

Fast and Furious was a Bureau of Alcohol, Tobacco, Firearms and Explosives program, overseen by the Justice Department, which facilitated the sale of thousands of weapons, via straw purchasers, to Mexican drug cartels. Straw purchasers are people who can legally purchase guns in the United States but do so with the intention of illegally trafficking them into Mexico.

At least 300 Mexicans were killed with Fast and Furious weapons, as was U.S. Border Patrol agent Brian Terry. Gosar said Holder bears responsibility for the operation. Holder is expected to face another round of questions about the scandal on Thursday when he appears before the full House oversight committee.

And that stops short of consideration of state involvement with the gambling industry...

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Who is the winner in this story?

Google loses $500 million.
The world loses $500 million worth of valuable web services and research.
Seller goes to jail.
Sick people pay more for prescription drugs.

Presumably, a bunch of DOJ attorneys got promotions and bonuses from the operation. So there's that silver lining.

Posted by: Dan at December 6, 2011 8:54 AM

1984 has arrived. Big brother has been here for quite a while. Now Big Bro and Big Sis are plotting against their own people in order to control them. HusseinCare wants your life. IRS wants your cash. FDA wants your diet. TSA wants your privates. Congress wants insider stock info. The die has been cast and the rifle scope reveals the real target(s)...... the American people especially the productive worker who pays for this mess in DC.

Posted by: ANTHONY at December 6, 2011 11:12 AM
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