The Paradise Papers continue to expose the economically useless activity that late-stage capitalism rewards with titanic sums of money: today, it's the story of Julien Lavallée, a botmaster ticket-scalper who has harvested the lion's share of concert tickets from all over the world, laundering them for millions through a secret "top seller" program that Stubhub offers to anyone who can move more than $50,000 worth of tickets per year.
Though virtually all the territories in which Lavallée operates ban bots from raiding ticket-sales, and even criminalize actions like lying to make your business appear to be a person looking for tickets, Lavallée takes advantage of the ambiguous way that these laws operate on out-of-country purchasers to gross millions ($7.9 million in 2016 accounted for in the Paradise Papers).
So while the UK criminalizes masquerading as a regular ticket-purchaser, it can't reach to Canada where Lavallée operates. And while Canada has stiff penalties for essential elements of the scalper's playbook, it doesn't penalize Canadians who break those rules in the UK.
Lavallée is described by unnamed Stubhub employees as "one of their biggest global resellers."
Lavallée's affairs are hard to unravel, but they're full of sketchy-as-hell alarm bells, like the company registered to an address in the Isle of Man, a UK tax haven — no one at that address had heard of the company, and the day after the CBC knocked on the door, Lavallée closed the company down.
Ticket scalping is almost a perfect parody of finance shenanigans, the kind of economically useless activity that masquerades as "liquidity provision" or "arbitrage" on Wall Street and in the City of London. It's a kind of microcosm of how finance rigs the system: people who want to do something in the "real economy" (see a concert) get fleeced by people who use high-speed trading algorithms to snatch the necessary elements of this economic activity out from under them, extracting several multiples of the asset-price from them, and neither the buyer nor the original seller (the performers) get a penny from it. Both the buyer and seller have to live in the real economy, where the money they spend and earn is taxed, while the much larger sums extracted by the useless middle-men are squirreled away offshore and tax-free. Squint a little and you've got the whole late-stage capitalist economy in a snowglobe miniature, begging to be smashed to the pavement.
Lavallée, his wife and father, who work together in the business, all declined to answer questions.In an emailed statement, his lawyer said Ticketaria "carries out all its activities in accordance with the laws and rules of the jurisdictions in which it operates and sells."
Canadian scalper's multimillion-dollar StubHub scheme exposed in Paradise Papers [Dave Seglins, Rachel Houlihan and Valérie Ouellet/CBC News]
(via /.)
(Image: Magnus D, CC-BY)
