Morning Ed: Fraud {2018.06.28.Th}
[Fr1] This will end badly.
[Fr2] An interesting story of identity theft.
[Fr3] A military deserter from 35 years ago was found alive and well in California, under a new identity.
[Fr4] We already talked about it some, but the story of the scholarship and the email fraud really is something else.
[Fr5] She ran out of money so she needed more. All she needed were some marks, which were evidently not hard to find.
[Fr6] Did any of you catch the 2015 story of the fake purple heart knight who got a job as a White House Chef?
[Fr7] The hammer of justice may be coming down hard on Elizabeth Holmes.
[Fr8] Hey, cool, something new to be worried about: synthetic identity fraud.
[Fr9] Turns out there may be something fishy about a martyr story in Gaza.
Fr3: Beside the point, but this bit is odd:
Why does “USSR” get a “was then known as” while “Soviet Union” goes by unremarked?Report
Because CNN scrimps on copy editors presumably.Report
My guess is that they wanted to mention it in the sentence and it was a coin flip as to which part they would put it in. I guess they thought
Flowed better than
Though I’m not sure why they wouldn’t go with
Report
Fr5: It is a fascinating story, but an old one. If you can look and act the part, people will tend to treat you accordingly. This is why you hear about 19th century pickpockets who were immaculately dressed and spoke with a respectable accent. Or, among a more legitimate set, the old advice to dress like one level up from your actual job. I can absolutely pass as a lawyer. I own a suit and know the jargon. I have long joked that the day would come when my boss had an insurmountable scheduling conflict and I would suit up and walk into court, and not mention my actual status. I wouldn’t actually do this, but we did have one time when my boss couldn’t attend a hearing and didn’t think he could get it continued, and the plan was that I and his wife, who is a non-practicing lawyer and didn’t know the case, would go; with her to speak to the judge what I whispered in her ear.Report
In a lot of ways, that is the plot of a Scott Turow novel, Personal Injuries. The joke being that the not-a-lawyer never passed his legal ethics class.Report
Fr2, Fr3: These stories mind of the Texan woman that killed herself. After she died, her husband and daughter learned that they had no idea who she was. The post-death investigation only revealed that she took elaborate steps to create a new identity, something that very few people do. Eventually, Social Security, was able to determine that she was from Philadelphia and the found her family. I’ve also read stories of people who used 9/11 to create entirely new identities and lives for themselves.
F7: She deserves it.
F9:This has been a long time in the pro-Israel community. There is even a name for the phenomenon, Pallywood. Hamas and to a lesser extent the PLO have a history of created fake martyrs to further their cause.Report
Fr2: This guy sounds just weird enough that he might have built a completely new identity for no external reason.Report
F7: I can see why prosecutors wanted the safety of the endangerment charge. Young, attractive women will get all kinds of sympathy from a jury. Even with the endangerment charge, it’ll be a hard sell.Report
Fr5 IS fascinating. It would make a good movie, I think. But I admit, I boggle at stories like this. I guess the rich really are different:
– $2000 would be a LOT of money to me (the one guy commenting “it wasn’t much, only like $2000).
– the comment about “it seemed weird she didn’t say please and thank you” had me going “A lot of the rich people I had around me in the past were JUST like that; they saw everyone else as their servants and therefore not deserving of those niceties”
But the biggest thing is: I can’t even imagine pulling off a con like that. I mean, if I have to park my car in a spot that’s not really a spot, I sweat the whole time it’s there, sure I’ll be found out and towed. I just don’t get the mindset of people who can do that kind of fraud for that long and seem to do it cheerfully. And her attitude once she got pinched for it….wow.
I’m also wondering: What is “Wes Anderson pink”? (The shade she allegedly favored for manicures)Report
Marks are easy to find. The thing about marks is that they always think they are savvy enough to be an exception or to see the scams. This includes the rich and the poor.
Theranos is a really bad exmaple of a scam. The problem is that I don’t know how to prevent scams like Theranos in the future. Fake it till you make it is needed generally for all new ventures especially those selling new products/ideas. The other issue is that no one wants to be the person who misses out on the big thing. Harry Potter was rejected by numerous publishers. Who wants to be those people? How often are they kicking themselves?* So scammers like Elizabeth Holmes can take advantage here. In the case of Theranos, what if they were able to meet their claims. It would be really revolutionary. But the amount of R and D needed to get to their claims would take years and she rushed out her product.
Felix Salmom thinks Silicon Valley won’t learn any lessons:
https://slate.com/business/2018/06/elizabeth-holmes-deserves-prison-but-her-indictment-wont-make-silicon-valley-any-less-reckless.html
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they think they’re savvy, and they’re also greedy enough to believe they can get a big return for a small investment.
I’ve known people who got bilked by variants on the money-drop scam, or the Nigerian Prince scam. It mostly came down to them REALLY wanting to be able to get something for nothing and feel they were entitled to those “surprise” riches.Report
@saul-degraw
The thing is that Venture Capital by its very nature is vulnerable to this kind of scam. Venture Capital is about making lots of low-probability, high return bets on the principle that the few bets that do pay off will pay for all the ones that don’t. That means that a scam artist offering a long shot with a potential high payoff is hard to distinguish from a legitimate pitch.
The reason VC works this way is that innovation is hard, and even the most engaged investors can’t easily predict what will prove to be the Next Big Thing. The only alternative to doing things this way is to just give up on the idea of inventing new things. This is one fo the things that irritates me about the most common criticism of Silicon Valley, while it definitely has its problem there is still an ethos there that if you find a problem you should try and solve it, the default mode int he rest of the US seems to be that if you find a problem you should complain about it a lot and then complain about anyone who tries to solve it.Report
@james-k I’ve been thinking about this a lot lately, mostly because of some podcasts I’ve just started listening to:
1) StartUp (planet money guy’s very non-self-protective story of the road to becoming gimlet media then broadened out to cover a lot of other topics including following a venture capitalist around for a season)
2) ZigZag (the woman from note to self and her partner, starting their own media company, this just started but there’s a really good discussion of what venture capitalists want / need from a company in the 3rd episode plus they have a really inside perspective on Civil, which I’ve been wanting anyway…)
Would recommend both to anyone who is interested in this topic more generally, and I say that as someone who often tunes out money talk, and is wary of podcasts about making podcasts… these two are really good!!
(I have no real contribution to the argument, just wanted to make the recommendation.)Report
@james-k
I can see that and it is valid but Theranos seems especially bad because it was founded by a 19 year old Stanford drop-out. It would be one thing to fund someone with an actual degree in a related field but Thernos feels like a bad example of funding of grifter.
Thernos would have been a great idea if it worked but there is a difference between “I have this really good idea and it is going to take a long time to develop” vs. “Let’s rush this thing that doesn’t work yet to the market and say it does.” Thernos was rushed to the market by Holmes and her VC enablers. It was not given any regulatory oversight or approval.
That being said, I think you misstate the criticism of Silicon Valley. The criticism isn’t that they are solving problems but that the problems they are solving are really “problems.” Uber and Lyft were legit good ideas. The scooter start-ups not so much. Thernos was a great idea too but one that no one really wanted to spend years doing proper research and development on.Report
@saul-degraw
Silicon Valley has plenty of university drop-outs who became successful in business, there’s not much you can learn at university to make you good at running a start-up (a large corporation, sure but not a start-up). Also, I think there are quite enough paths to financial successes that are gated off by degrees, I’d rather not add more to that list.
But people criticise Uber and Lyft too. For that matter, a lot of people seem to really dislike Elon Musk and his project are all about solving heavy engineering problems, not creating fancy juicers. I’m not saying that Silicon Valley deserves no flak, but it seems to attract vitriol out of proportion to its actual evils.Report
I think there is a big difference between Holmes and the other Silicon Valley Drop Outs in that Holmes was boasting something a lot more revolutionary than the other silicon valley start ups.Report
Bad Blood made the point that what she was doing was not at all unusual in Silicon Valley and it’s actually pretty harmless there. Investors there know the risks and that things may not work right and things are not as good as advertised. The problem was that she took that stance with a biotech, where everybody assumes things are going to work because how could anybody lie on that sort of scale? But in SV terms it happens all the time.
It’s also been pointed out that though it was a “Silicon Valley” story, the people who got most conned weren’t actually Silicon Valley people. Other than Theranos itself, it wasn’t actually their mistake.Report