The scandal surrounding Phoebe Gates, daughter of Microsoft founder Bill Gates, could have serious consequences for her: she faces up to 20 years in prison if her knowledge of the fraudulent scheme at the startup Phia is confirmed, according to infohub.kz.
American intellectual property lawyer Ariel Givner said that Phoebe Gates and her partner, Phia co-founder Sophia Kianni, may have known about the use of forged cookies to obtain commissions on purchases. According to Givner, such actions are typically treated by U.S. courts as federal wire fraud, which carries a maximum penalty of up to 20 years in prison, as well as fines and restitution.
The investigation was prompted by Bloomberg reports, based on sources claiming that Phoebe Gates and Sophia Kianni were aware of the use of forged cookies for at least seven months. Phia is positioned as a digital assistant for finding great deals: the service receives a percentage of the purchase if the user goes to the seller's website through the app. However, it turned out that the app, without the user's knowledge, attached its data to any purchase, regardless of how the user reached the marketplace, allowing it to earn a commission even on transactions it had nothing to do with.
In July, Phia claimed it was a software bug that came to light only on the day journalists reached out. However, Bloomberg's data indicates that the startup's executives knew about the issue since at least December. After fixing the bug, the company's average daily revenue dropped from $80,000 to $10,000-$28,000. Internal communications among Phia employees, obtained by the agency, show that the share of goods for which the company received commissions illegally was 51% in June alone.
Phia, which raised $35 million in venture funding from several prominent investors in January, has already begun returning some commissions to retailers, the article notes.