Bill Gates' daughter was caught committing online fraud: she faces up to 20 years in prison.

Bill Gates' 23-year-old daughter, Phoebe Gates, dubbed "preppy little baby" by the press, has been accused of using cookie stuffing at her startup, Phia. This is an illegal practice punishable by up to 20 years in federal prison in the United States, according to New York Post.

Phia, the digital personal shopping assistant Gates co-founded with Stanford graduate Sophia Kianni, said in July it was shocked by reports that the service was setting more web cookies than it should, thereby taking a cut of sales from partner retailers without actually bringing in customers.

In an official statement, the company claimed to have learned of the problem "only in the last 24 hours" and promised to fix it. However, a new Bloomberg investigation reveals that the startup's founders knew for at least seven months that Phia was inflating sales commissions.

On the subject: Bill Gates named the Russian women with whom he cheated on his wife: Jeffrey Epstein blackmailed him with these connections.

What is "cookie stuffing"? A cookie is a small file that a website or service stores in the browser. It acts as a tag, recording where the user came from and what they did. For example, if someone clicked on a link with a promo code or discount, a tag appears in the browser, and the store understands that this service brought the customer.

This is important because online stores pay a commission to those who refer customers to them. Under normal circumstances, everything works fairly: a user clicks a coupon or link, which causes a cookie to appear in their browser. They then make a purchase, and the store uses this cookie to identify the referrer and pays the service a percentage.

The scheme in question works differently. It involves the service slipping its cookie even when a person hasn't used it. For example, a person visits an online store without clicking anything or using any coupons, but at that moment, an extension or service still surreptitiously writes its cookie to the browser. Afterwards, the person makes a purchase, and the store believes that the service itself brought the customer, even though it didn't. As a result, the service receives a commission for someone else's sale. Approx. Ed.)

Givner Law founder and chief legal officer Ariel Givner warned in an August 11 X post that "cookie stuffing" could have serious consequences.

"In US courts, this is typically classified as wire fraud. The maximum penalty can be up to 20 years in prison, plus fines and compensation," he wrote.

A Phia representative stated, "Any features that led to misattribution of sales were completely disabled over a month ago, on July 7th. We are reviewing every transaction, have already begun refunding partners any amounts credited in error, and are hiring a head of internal compliance to ensure this does not happen again."

He added: "We continue to help users find products and offers from thousands of brands. We will learn from this situation and aim to provide the best user experience, including through new features like a digital wardrobe and others coming soon."

The startup, which raised $30 million in 2025 from high-profile investors including Hailey Bieber, Kris Jenner, and Spanx founder Sara Blakely, operates as a browser extension. It searches for promo codes in online stores and offers them to customers during checkout.

When a user applies one of Phia's coupons, the program sets a cookie (a small file that tracks internet activity) to show the retailer that the service resulted in a sale and to receive a commission.

However, according to sources and internal Slack emails reviewed by Bloomberg, Kianni and Gates (the daughter of the Microsoft co-founder, whose net worth, according to Forbes, is $108,4 billion) knew about features that added cookies during the checkout process even when the user wasn't using Phia.

According to the publication, the illegal practice has been monitored since at least December and affects sales at several major retailers, including Nike, Gap, and Nordstrom. Moreover, according to sources, such transactions accounted for the bulk of Phia's revenue.

After the company disabled the features in July, its average daily revenue dropped sharply, from about $80 to a range of $10 to $28, Bloomberg reports.

In June, cookie stuffing accounted for about 51% of the total cost of goods for which Phia earned a commission, the publication says.

A Phia representative stated that the sharp drop in revenue in July was due not only to the shutdown of this scheme but also to the temporary suspension of most monetization tools. He also asserted that Bloomberg's findings exaggerate the scale of the problem.

According to an internal dashboard reviewed by Bloomberg, what the company described as a software bug in July was actually an "enable coupon auto drop" feature that could be toggled on and off.

At one point, Gates, who had previously stated that she wanted to succeed without the help of her billionaire parents and had a "strong desire to prove myself," expressed dissatisfaction with Phia's lower commissions from Etsy than she expected.

As the investigation revealed, she asked the developers to ensure the service set cookies every time the extension pop-up appeared, even if the user didn't click the coupon. This would allow her to receive a commission on the entire order value.

On December 18th, she wrote in a Slack channel: "I'm afraid this is a widespread issue... can you confirm that the automatic cookie popup works on ALL coupon sites so we can get commission on all GMV."

In another episode, according to Bloomberg, Kianni proposed a feature that would set cookies every time a user simply tried to close a Phia pop-up.

One of her employees pointed out to her that Google Chrome prevents extensions from setting affiliate cookies during so-called close events, when the user simply attempts to dismiss a notification. Kianni agreed.

However, as follows from the correspondence, she added: “You could say that the user is trying to open us up and roll back if there are complaints.”

A Phia spokesperson told Bloomberg that the feature was ultimately not implemented.

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According to the publication, one of Phia's affiliate networks, Impact.com, has already suspended cooperation and redistributed commission payments intended for Gates' company.

Although Phia has announced that it has begun refunding partners, it may have to pay additional compensation because the practice ran from December to July—much longer than originally anticipated.

Read also on ForumDaily:

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