Welcome to Black Sheep, a spin-off publication of my serialized memoir. SMIRK. While SMIRK was a deep dive into my unusual personal and professional relationship with one unique white-collar fraudster— Martin Shkreli — Black Sheep takes a broader view and tells the stories of a wider range of business crimes and failures.
This publication will examine cultural themes and motives that contribute to lying, cheating, stealing, and related self-inflicted disasters; the impacts of those events; and the characters who play starring roles in these dramas. I find these tales both cautionary and fascinating; I hope you will, too.
Remember Zulily?
Possibly not. The briefly inescapable e-commerce site, advertising “flash” deals in pop-up ads, blossomed in the 2010s into a $2.6 billion business. Then, just like one of its ephemeral sales, it started to fade. By the end of 2023, the site was defunct.
During its death throes, workers endured round after round of layoffs, “Game of Thrones”-style political maneuvering between managers, and a sense of tragic futility. Benefits were slashed. Demands and workloads constantly shifted. Souls were crushed.
“A slow, laborious swan dive,” one employee wrote in a Glassdoor review. Another wrote: “The ship is going down hard.” A third wrote: “Dusty1 mean girls. Chaotic environment. You wake up some mornings and you get an email from biz-dev: WE JUST LET 25 PEOPLE GO. (ping from teams); 'TEAM HUDDLE AT 10, RSVP?” I could go on, but you get the idea.
Morale sank so low workers contemplated rebelling by turning to crime. We know that’s true because one of them — then-28-year-old software engineer Ermenildo “Ernie” Valdez Castro — actually did it and got caught. Castro, who worked on Zulily’s check-out processes, secretly inserted lines of code that allowed him to skim off portions of transactions and siphon them into a personal account.
Appropriately enough, he called his scheme the “OfficeSpace project.”
“Office Space,” Mike Judge’s cult comedy about disgruntled software workers, was just one of several iconic films released in 1999 that dealt with the theme of challenging the corporate status quo. Others included “The Matrix,” “Fight Club,” and “American Beauty.” I turned 17 that year, old enough to see R-rated movies in the theaters, and I watched them all. All four remain among my top favorites.
Although they were written by Gex Xers and Boomers, the movies of the era spoke powerfully to Millennials — who, like myself, were in their formative teen years or late childhood. In the mid-to-late 1990s, economic stability spawned a vapid, cubicle-filled hellscape where many of our parents spent their working lives. Prosperity made us feel trapped and miserable instead of safe and hopeful. We idealized fictional heroes’ escape from materialism and corporate excess, which they often accomplished through crime.
In “American Beauty,” Lester Burnham quits a dull job and blackmails his boss “for $60,000,” he proudly announces to his disapproving wife over dinner. Before he meets Morpheus and takes the red pill, Neo is already a criminal – a hacker – and levels up his game by bestowing virtual superpowers on himself. In “Fight Club,” Tyler Durden recruits an army of frustrated men to commit anarchist mayhem including blowing up credit card company headquarters.
Only “Office Space” emphasizes the illegality of its characters’ actions – stealing from their employer using a computer virus to siphon off tiny percentages of transactions. Protagonist Peter Gibbons plants a seed that would sprout into justification for embezzlement in many young minds. Explaining his plan, he tells his girlfriend, Joanna: “It’s not wrong. Inotech is wrong. Inotech is an evil corporation.”
In another memorable exchange, the characters fret over whether they might go to a “white collar resort” or “federal pound me in the a** prison” when their crime is discovered. But they don’t end up in either. Their tracks are covered by a colleague, Milton the Stapler Guy, coming mentally unhinged and burning down the office building
Although they were either not yet born or too young to remember “Office Space,” “The Matrix,” “Fight Club” when they came out, Gen Z has embraced those films and their anti-corporate messaging. Viral sharing of scenes and quotes on social media by way of memes and GIFs probably helped. (“American Beauty,” winner of the 2000 Oscar for “Best Picture,” did not enjoy the same revival — possibly because of the sex pest controversy surrounding star Kevin Spacey…and the fact that the storyline includes his character being a sex pest.)
The themes landed even deeper. More socially conscious than Millennials, Gen Zers are also more OK with stealing from “evil corporations.” A fraud prevention company published survey data showing that 42% of Gen Zers (almost half!!) have lied to a credit card firm about their purchases to get charges wiped off their accounts. Meanwhile, 22% of Millennials have done the same. For Gen X, the number was 10%, and for Baby Boomers it was 5%.
For the sake of this argument, let’s assume that young people associate credit card companies closely with the term “evil corporation,” or at the very least consider them to be unsympathetic as fraud victims.
Only 5 years old when “Office Space” came out, Castro was probably introduced to the movie later in life, during its social media-fueled revival. Nonetheless, it left a significant impression on him. The former Zulily engineer’s scheme was less stealthy than the “Office Space” plot, but the motives and thought process behind it were roughly identical.
As explained by police in charging documents, Castro had worked at Zulily since 2018 and was part of the site’s “Shopping Experience” team. Starting in the spring of 2022, he “began a series of malicious software edits to Zulily.com’s checkout pages,” the document said. The first applied to a small percentage of orders and diverted shipping costs to his Stripe account, which he named “Zulily” so as not to arouse customers’ suspicions.
However, Zulily discovered the “bug” and fixed it. So Castro got bolder. He tried another script that double-charged a small percentage of customers for shipping fees and routed “full” shipping costs to both the company and his account. Perhaps getting overconfident, he then went for another scheme: Manipulating the prices of hundreds of merchandise orders and then purchasing them for pennies on the dollar, presumably to return them for full price.
The third scheme proved to be his undoing. Along with buying items himself at artificially low prices, he also directed orders to a woman he met on Tinder as a means of impressing her, according to the police documents. He called the practice “peacocking.”
Police showed the judge an email exchange between the pair that included confirmation of a purchase of 35 items, including home decor and workout gear. The subject line was “shopping” with multiple “heart” text symbols.
The orders to his Tinder date weren’t delivered, though. They were flagged by Zulily’s fraud team, which also visited his address and found “several Zulily labeled boxes piled outside of the home’s front door and driveway.” By June 2022, the company had pieced together enough of Castro’s scams to fire him. He was referred to law enforcement and arrested on multiple fraud charges later that year.
Charging documents detailed Castro’s interactions with investigators. At first, he clung to a narrative that he had merely been trying to “test an error by sending a large quantity in one order” and “forgot to cancel the items.” He claimed that he changed the price because he was using his personal credit card for the testing and didn’t want to incur large charges.
As questioning continued, however, the truth emerged — along with Castro’s bitterness toward his former employer. Investigators wrote:
He admitted that he did not ever notify Zulily staff of the orders being delivered. When asked what he did with the items delivered, he stated that once he was fired, he threw many of the items away. When asked why he never returned the items to Zulily, he said that once they fired him, his opinion was, “Fuck ‘em.”
Police had access to Castro’s work laptop, which he had returned to Zulily following his termination. It contained a OneNote document that outlined his shipping fee scheme, which he named the “OfficeSpace project.” It outlined details for covering his tracks, including a control to exclude transactions originating from a Zulily IP address and a comment about needing to “fudge exposure metrics.” Entries also described preparations to live “off-grid” if his plans were discovered.
Why he didn’t bother to wipe his work laptop, or why used it in the first place to chronicle his schemes, we’ll never know. Maybe Castro was proud of what he pulled off and wanted to be found out on some level. In any event, confronted by details of his “OfficeSpace project,” Castro gave up trying to hide his crimes. A detective noted:
In a June 21, 2022, post-Miranda interview with me, Castro confirmed that he named his scheme to steal from Zulily after the movie.
Between all three scams, Castro collected $302,278.52, according to police. Coincidentally, in “Office Space,” the characters also managed to steal about $300,000. And just like in the movie, where the characters presumably lose all their ill-gotten gains in the fire2, Castro also allegedly wound up penniless. He told police he sank all of the proceeds into another Millennial and Gen Z-driven, “F*ck the Man”-style financial scheme: GameStop stock.
After pleading guilty to three counts of fraud in April 2024, Castro is serving a 14-month sentence in Washington’s Cedar Creek Corrections Center, a minimum security prison nestled in a state forest. Luckily for Castro, it’s a lot closer to a “white-collar resort” than a “federal pound me in the a**” prison, at least in “Office Space” terms.
“Dusty” means “sketchy, unclean, unkept, exploitative, ugly, and gross,” according to online slang dictionaries.
The movie strongly implies that Milton, their arsonist colleague, finds and keeps the funds.
Fighting "The Man" With Fraud