A former diversity manager at Facebook has pleaded guilty to stealing more than $4 million from the company in what the Justice Department says was an elaborate scheme involving fake vendors and cash kickbacks.
Barbara Furlow-Smiles, who led Facebook’s diversity, equity, and inclusion (DEI) programs for years, has pleaded guilty to defrauding the company of more than $4 million using fictitious charges and fraudulent invoices, according to the Department of Justice (DOJ).
“This defendant abused a position of trust as a global diversity executive for Facebook to defraud the company of millions of dollars, ignoring the insidious consequences of undermining the importance of her DEI mission,” U.S. Attorney Ryan K. Buchanan said in a statement.
Ms. Furlow-Smiles served as lead strategist and global head of employee resource groups and diversity engagement at Facebook, which is now known as Meta.
From 2017 to 2021, she was responsible for developing and executing a range of DEI initiatives, operations, and engagement programs, with access to company credit cards and the authority to submit purchase orders and approve invoices.
‘Elaborate Criminal Scheme’
Prosecutors said that, while in her role as a DEI executive, she devised a scheme that started with causing Facebook to onboard a number of vendors that were owned and operated by her friends and associates.
She approved purchase requisitions for these vendors to provide services to Facebook and then signed off on fraudulent and inflated invoices on the basis of which the company paid these vendors—who then gave her back most of the money.
“Motivated by greed, she used her time to orchestrate an elaborate criminal scheme in which fraudulent vendors paid her kickbacks in cash,” Mr. Buchanan said. “She even involved relatives, friends, and other associates in her crimes, all to fund a lavish lifestyle through fraud rather than hard and honest work.”
Some people Ms. Furlow-Smiles recruited to participate in her fraudulent scheme were interns from a prior job, nannies and babysitters, a hair stylist, and her university tutor.
Investigators said the fake vendors paid the DEI executive kickbacks both in cash (sometimes wrapped in T-shirts to conceal the ploy) and through transfers to accounts held in various people’s names, including her husband’s. In order to further hide the fraud, Ms. Furlow-Smiles also got the associates to pay one another or give funds to people to whom she owed money.
Most of the people she recruited for the scheme were unaware that the payments came from Facebook, as she linked PayPal, Venmo, and Cash App accounts to her Facebook credit cards and used those accounts to funnel money to associates for services that were never provided.
She submitted fraudulent expense reports to Facebook, falsely claiming that the associates performed work for the company, such as providing marketing services.
DEI in Focus
In recent years, DEI has surged to prominence, with many businesses and colleges jumping on the trend—and drawing pushback from conservatives.“Woke radicals are propagating the same racially focused, ideologically driven diversity, equity and inclusion (DEI) offices and training on community college campuses that have distracted four-year institutions from educating students,” wrote Jonathan Butcher, the Will Skillman Senior Research Fellow in Education Policy at The Heritage Foundation and lead author of the report.
“DEI is a racist cultural movement that puts the radical ideas from critical race theory, gender theory, and queer theory into practice.”
The explosion of the DEI phenomenon has led some Republican-led states to stand up in opposition. For instance, the GOP governors of Florida and Texas have signed bills banning public funding of DEI in colleges and universities.
Some DEI initiatives may also conflict with the recent U.S. Supreme Court decision against racial preferences in college admissions.
The Supreme Court issued a decision in June that struck down the use of racially discriminatory admissions policies at colleges and universities that receive federal money, ordering an end to the use of so-called affirmative action programs in higher education.
Following the Supreme Court ruling, state attorneys general from Tennessee, Kansas, and 11 other states put 100 of the largest U.S. corporations on notice “of the illegality of racial quotas and race-based preferences in employment and contracting practices.” They urged the firms to put an immediate halt to such policies.
“If your company previously resorted to racial preferences or naked quotas to offset its bigotry, that discriminatory path is now definitively closed,” the letter reads.
“Your company must overcome its underlying bias and treat all employees, all applicants, and all contractors equally, without regard for race.”
