Good morning. The Justice Department is developing a new pipeline for tips on potential fraud cases: data sleuths.

Risk Journal reports that as department lawyers look to file more civil charges under the False Claims Act, which prohibits fraud against the government, they are looking beyond former employees and other insiders who typically serve as whistleblowers (free link). Now, they are cautiously opening the department’s doors to outsiders who believe they have spotted wrongdoing by inspecting government spending data.

• Digging in: The DOJ’s civil division launched an initiative in April intended to encourage more high quality tips from so-called government “data miners.” The number of False Claims Act tips filed with the department has skyrocketed recently, from 980 in fiscal year 2024 to nearly 1,300 the next fiscal year, with data miners accounting for more than 45% of filings since fiscal 2024, according to an agency report.
   
• Follow the fraud: Artificial intelligence tools can make such analysis even easier and allow those with more rudimentary data chops to try their hand at flagging fraud. Jason Marcus, a lawyer specializing in False Claims Act whistleblower complaints, said in recent months he has received an increasing number of calls from people looking to make a career out of mining data for fraud.
   
• Pandemic shifts: Whistleblower lawyers attributed the increase in data miner-derived tips to fraud schemes that accompanied the massive stimulus packages the federal government passed in the wake of the Covid-19 pandemic. The Paycheck Protection Program, which saw Congress deal out $796 billion to small business owners looking to maintain payrolls during the health crisis, provided a bevy of easily identifiable targets because the government published a data set detailing each of the 11.6 million organizations that received loans under the program, according to the lawyers.

Kathryn Ruemmler grilled in Congress over her emails joking with Jeffrey Epstein.

Goldman Sachs lawyer Kathryn Ruemmler was grilled by members of Congress over her correspondence with Jeffrey Epstein and criticized for responding that she was joking with the convicted sex offender about massages and prostitution.

Several Democratic members of the House Oversight Committee, during a break from Wednesday’s closed-door session, said they were disgusted by Ruemmler’s responses to their questions about emails that she and Epstein sent to each other.

Ruemmler has maintained she and Epstein had a professional relationship based on a shared mutual client, the Swiss bank Edmond de Rothschild Group. She joined Goldman Sachs in 2020 and became its general counsel in 2021.

Apple’s AI tools get China approval.

Apple’s artificial-intelligence system has secured government approval in China, clearing a major roadblock for the iPhone maker to introduce the service in the world’s largest smartphone market.

China’s top cyberspace regulator said Wednesday that the American company has successfully registered its Apple Intelligence service. Companies need government approval before releasing most generative AI services to the public in China.

• A former Federal Reserve official was sentenced Wednesday to more than three years in prison for lying to investigators about sharing confidential information outside of the central bank.
   
• The European Union imposed an assets freeze on three Russia-based technology companies for restricting Russian citizens’ freedom of expression and access to information, as part of an expansion of its sanctions efforts related to human rights, Risk Journal reports (free link).
   
• The U.K.’s media watchdog is investigating TikTok over how the company conducts age checks on its users to prevent children from seeing harmful content such as pornography.
   
• South Korea’s top financial regulator unveiled measures to curb risks from single-stock leveraged exchange-traded funds, seeking to stabilize a local stock market that has seen wild swings, as individual investors use debt to chase profits amid artificial-intelligence-related jitters.

Anthropic blocking millions of accounts weekly to stop Chinese IP theft.

Artificial intelligence company Anthropic is shutting down millions of accounts each week to prevent Chinese companies from hijacking its technology, Risk Journal reports from the Aspen Security Forum in Aspen, Colo. 

Virtually all of China’s leading AI labs are stealing the most valuable intellectual property from Anthropic and other major U.S. tech firms, Tarun Chhabra, Anthropic’s head of national security, said at the conference on Wednesday. The IP includes U.S. AI firms’ coding, cipher and agentic capabilities, he added.

‘Trusted Tech Alliance’ partly a response to strained international relations, Microsoft exec says.

A recently launched “Trusted Tech Alliance” between Microsoft, Anthropic, Amazon and others was partially a response to strained relationships between governments, a senior Microsoft executive said.

Governments are “increasingly strained” in their ability to come together to respond to the public’s lack of trust in artificial intelligence and other frontier technologies, Microsoft president of Global Affairs Lisa Monaco said Wednesday at the Aspen Security Forum.

The fight over humanoid robots has shut down a car factory for the first time.

When Hyundai Motor unveiled its new humanoid robot worker named “Atlas” in January, tens of thousands of Korean auto employees gaped at the 6-foot-2 robot strutting across a trade-show stage, its joints swiveling a full 360 degrees.

The union’s response was blunt: Atlas would never step onto a production line without workers agreeing first.

This week, Hyundai’s auto workers in South Korea have gone on a partial strike. It is the car industry’s first factory stoppage addressing humanoid robots.

Trump leans toward expanding U.S. military operations in Iran.

President Trump is leaning toward expanding U.S. military operations in Iran after days of briefings from top aides, U.S. officials said. Options include stepping up airstrikes, sending ground forces to seize Iranian islands near the Strait of Hormuz and bombing a fortified site that could be used for covert nuclear work.

Trump hosted a Situation Room meeting Tuesday evening to discuss the potential seizure of Kharg Island and other territory along the Strait of Hormuz using U.S. troops, as well as the potential bombing of a tunnel complex at Pickaxe Mountain, a nuclear-linked site the U.S. has yet to target. Expanding airstrikes against more targets in Iran, including energy sites, also remains a possibility.

• Controlling Hormuz Would Take More U.S. Troops—and Even More Risk

• The U.S. is imposing a 25% tariff on certain Brazilian goods, following a yearlong investigation by trade officials into what they described as unfair trade practices.
   
• U.S. Coast Guard ships previously deployed in the Middle East are now operating out of Singapore and the Philippines to help challenge China’s assertion of power in the Pacific.
   
• Americans have been falling behind on their credit card bills at the highest rate in 15 years.
   
• Wildfire smoke from Canada is shrouding the Northeast and the Midwest, harming the air quality during a summer heat wave.

• The Depository Trust & Clearing Corp. plans to convert a batch of shares and Treasurys into digital tokens, the clearinghouse’s latest step toward a fully digital Wall Street. Almost 40 financial firms and tech providers, including JPMorgan Chase and Goldman Sachs, will participate in a trial run of the process.
   
• Stripe and buyout firm Advent International made a joint takeover bid for PayPal Holdings in a deal that would value the fintech company at around $53 billion, according to people familiar with the matter.
   
• BlackRock shares rallied after the investment firm posted bumper quarterly results and made history as the first investment firm to manage more than $15 trillion in assets.
   
• China’s growth slowed in the second quarter of the year to the weakest pace in more than three years, as surging exports buoyed by the artificial-intelligence boom failed to compensate for a struggling domestic economy and sluggish consumer spending.