Yahoo Sued By Former Chinese Prisoners For Allegedly Mishandling Millions Meant For Humanitarian Aid

Yahoo Sued By Former Chinese Prisoners For Allegedly Mishandling Millions Meant For Humanitarian Aid

For what seems like the millionth time, Yahoo’s miserable descent into nothingness has somehow gotten worse. Today, a group of previously imprisoned Chinese dissidents filed a lawsuit against the company for misappropriating more than $US17 million ($23 million) put in a trust fund meant to aid Chinese political prisoners.

The lawsuit alleges that several Yahoo executives turned a blind eye to the rampant self-dealings of the trust fund’s manager, Harry Wu, who allegedly spent millions on real estate, large staff salaries and legal expenses using money from the fund.

The trouble started for Yahoo back in 2002, when two political dissidents were sentenced to 10 years in prison for crimes against the state, after Yahoo gave Chinese officials their email records upon request. According to the Washington Post, the “crimes” included one journalist forwarding an email directing him not to cover the Tiananmen Square anniversary to an overseas website. The other was arrested for writing pro-democracy articles on a Yahoo groups site.

Yahoo and the two dissidents’ families settled in 2007 for an undisclosed amount, and as part of the settlement, Yahoo agreed to create a relief fund for others imprisoned for speaking out against the government online.

Now, eight plaintiffs — seven former prisoners and the wife of another — are suing Yahoo because they say the trust fund set up as part of the settlement, the Yahoo Human Rights Fund Trust, barely helped anyone previously imprisoned, as the settlement said it would.

The lawsuit accuses Yahoo Trust managers of “wilfully turning a blind eye” to the fund manager Wu’s mishandling of the fund’s assets. The result, according to the suit, was more than $US13 million ($17 million) being depleted “in less than 10 years on expenditures having nothing to do with providing humanitarian assistance to imprisoned Chinese dissidents”.

According to the suit, only $US700,000 ($933,738) actually went to providing direct humanitarian aid to the imprisoned dissidents. The rest of the money was allegedly used for Harry Wu’s personal projects — which is where things get really weird. The lawsuit says a nonprofit called Laogai Human Rights Organisation (LHRO) was created around the same time as the Yahoo Trust following the settlement, and a large portion of Yahoo Trust’s assets were transferred to it.

As Buzzfeed reports, Laogai Human Rights Organisation is a virtually untraceable entity run by Harry Wu. According to tax filings, the nonprofit doesn’t have a website, and its phone number didn’t work when we called. LHRO, according to the lawsuit, transferred funds received by Yahoo Trust to Laogai Research Foundation, another organisation without a website or working phone number, and one also run by Harry Wu. Both organisations are being sued by the former Chinese prisoners in addition to Yahoo.

This new lawsuit is a supremely awkward cherry on top for Yahoo, as it just announced a merger with AOL under the rebranded name “Oath”. Verizon, Yahoo’s new owner, was, uh, surprised by several scandals this year, including the disclosure of several large-scale cyber attacks. (In 2014, 500 million accounts were compromised, and more than one billion accounts were compromised a year earlier in a different incident.) It also comes after the ousting of CEO Marissa Mayer, who had her own problems.

The only upside to any of this, it seems, is that Yahoo is already basically dead — but that, of course, doesn’t help the people it allegedly screwed over. When reached for comment, Yahoo told us, “We don’t comment on litigation.”

We reached out to the other defendants, as well as the plaintiff’s lawyers, but had not heard back at time of writing.