The prosecutors were making a case against Kail. If they make it seem like the startups were complicit or even proposed it, that would hurt their case against Kail.
These arrangements were obviously illegal, and it beggars belief to suggest that so many startups were unaware of that.
If complicity weakens the case against Kail, why are you suggesting the startups did something illegal? You can't have it both ways. The complicity is either a crime alongside Kail's crime (and completely independent), or it isn't.
They both did something illegal. Did something I say make you believe I think otherwise?
The prosecutors chose to go after Kail because he is easier to nail. They get to charge him separately for the fraud he committed with each startup, so it's more likely that at least one will stick. The startups are required to help the DOJ build a case and get a warning that they won't get off so easily if they're caught again. Since they weren't charged this time, these cases are fair game to litigate in the future together with any new charges.
What these startups did is obviously illegal, and they and the DOJ are obviously well aware.
These arrangements were obviously illegal, and it beggars belief to suggest that so many startups were unaware of that.