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This Week's Updates:
North Carolina Taxpayer Dollars Head to Private Schools, Crisis Pregnancy Centers
In 2014, North Carolina launched a program that directed $4.6 million in taxpayer dollars into a school voucher program for low-income families, who could use the money to send their children to private schools. Since then, the program has exploded into a $500 million slush fund and helped fuel the re-segregation of the state’s education system. Now, the state’s Republican lawmakers are leading a push to fully eliminate income requirements for private school vouchers, meaning even the wealthiest families could participate. At the same time, the state is using funds from the federal Temporary Assistance to Needy Families (TANF) program to support anti-abortion crisis pregnancy centers (CPCs), even though these facilities have few reporting requirements and do not appear to be providing a high volume of services.
Regardless of their policy impacts, both programs appear to distribute funding with minimal oversight, making them targets for fraud. MultipleCPCprograms in other states have been investigated for misusing funds or providing low quality care, while one North Carolina private school has already been investigated for having more vouchers than students. In 2020, CfA called on Pennsylvania governor Tom Wolf to end the state’s contract with Real Alternatives, a third-party CPC administrator which appeared to waste taxpayer dollars and failed to provide adequate pregnancy care. Three years after CfA filed its complaint, the newly-elected Gov. Josh Shapiro finally ended Real Alternative’s contract. In North Carolina, Democrats who sit on the General Assembly’s Government Operations Committee have asked for increased transparency into both programs, but say they have been stonewalled by their colleagues.
Meta Rescinds Job Offer to Sextortion Expert
Until recently, cyber-intelligence expert Paul Raffile thought he had a job lined up at Meta, where he planned to combat cyber threats and keep children safe from online sexual exploitation. Before being onboarded, though, he criticized the company’s approach to child safety in a closed-door webinar which was attended by Meta employees. His offer was rescinded only hours later. A company spokesperson told The Guardian that Raffile’s comments played no role in their hiring decision, despite the unusual timing.
Regardless of Meta’s true intent, the episode draws attention to the company’s failure to address sextortion schemes, which have already led to the deaths of over 20 children by suicide. Raffile’s work focused on a group of scammers known as “Yahoo Boys,” who build fake social media profiles to trick victims into sending nude photos of themselves. Scammers will then threaten to send the photos to a victim’s friends, family, or employer. Speaking to The Guardian, Raffile pointed out that Meta had failed to make simple design changes to protect users; hiding minors’ followers by default, for instance, would prevent blackmailers from accessing their contacts. Unfortunately, Meta’s current approach puts engagement before safety, and prioritizes the creation and viewing of content over user wellbeing.
North Korea Launders Millions Through Crypto Exchange
In August 2022, the U.S. Treasury announced sanctions against Tornado Cash, a cryptocurrency “mixer” that blends multiple transactions together to obfuscate their origins and destinations. Mixers can allow criminals to launder immense amounts of money, according to Treasury officials, and Tornado Cash failed to create basic safeguards that would have minimized this risk. Inevitably, the mixer was used to launder almost half a billion dollars for a group of North Korean hackers, and processed a total of $2.3 billion on behalf of illicit and sanctioned entities between 2019 and 2022.
This week, Tornado Cash developer Alexey Pertsev was found guilty of money laundering by Dutch authorities and sentenced to five years in prison. His case underscores the role that cryptocurrencies play in money laundering, and the threat that unregulated crypto service providers pose to the U.S. and its allies. Days after Pertsev’s sentencing, the Treasury released its 2024 National Strategy for Combatting Terrorist and Other Illicit Financing, which identified the creation of cryptocurrency anti-money laundering requirements as a key priority. The agency’s Financial Crimes Enforcement Network (FinCEN) has already begun the process of cracking down on mixers, after proposing a rule that would identify them as a primary money laundering concern.
