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Lifestyles of the Rich and Gullible: Theranos and Ozy Edition

Not too long ago, we went through 1% when watching Lifestyles of the Rich and Famous or Cheat Sheets. Now we are fixated on the details of how they were tricked. In San Jose, California, where Miss Holmes’s trial took place over the past month, several book clubs that read Bad Blood, which chronicles the fall of Theranos, made a pilgrimage to catch a glimpse of her in the courtroom. One eager visitor told me that she was a “white collar crime fanatic.”

The seething zeal for fraud reflects the rise of “killers” or fans of true murder stories. We are relieved that we are not victims. Few of us are likely to lose millions – or hundreds of millions – on a dubious starting rate.

“Psychological distance allows us to laugh at things that, if they happened to us, would make us ashamed, embarrassed, or offended,” said Peter Atwater, an associate professor at the College of William and Mary, who studies confidence in decision making. “Finally, some of the rich were deceived just as we poor are.”

For so-called white-collar fans, this scam cannon offers a growing reward. Recently, it was revealed that one of Ozy’s executives posed as a YouTube spokesperson while speaking with Goldman Sachs to try to secure the investment. There are fake invoices that Manish Lahwani used to inflate the profits of software company HeadSpin he founded in order to raise $ 60 million in funding, according to a recent criminal charge. (HeadSpin said it had refunded funds and worked with investigators.) Fraudulent insurance claims are being received at uBiome, a poop testing startup that officials say misled investors about their business to raise $ 65 million. , prompting the prosecutor’s office to file charges. in February, they faced more than 40 fraud charges. According to recent testimony in court, there are private detectives and legal intimidation tactics that Theranos used to intimidate informants.

They follow the same old formula as Musician. The charismatic founder portrays himself as a visionary. Ms Holmes said Theranos blood testing machines can quickly and cheaply perform hundreds of medical tests on a single drop of blood. The promise has attracted people like General James Mattis, who testified that he sees the potential to save lives on the battlefield, or Steve Bird, a former Safeway chief executive, who testified that placing cars in stores would open up an exciting new line of machines. business for the grocery chain.

Once one wealthy person is bought, the founder can use that benefactor’s authority to build a stable of ever-powerful supporters. In the case of Theranos, former Secretary of State George Schultz introduced Ms Holmes to his friends at the Hoover Institution, including Henry Kissinger and Mr Mattis. Everyone thinks that all the hard questions were asked by the first investor. Further probing is considered a trade secret.

Claims may be unfounded. In 2015, Theranos predicted revenues of $ 990 million. The reality, as the court found out, was close to zero. Ozy Media claimed to have written the first stories about influential people such as Trevor Noah and Alexandria Ocasio-Cortez. Did not have. Jessica Richman, co-founder of uBiome, told reporters that she was on the Under 30 and Under 40 lists. According to the indictment, she was over 40 years old. Neumann pledged that by 2018 WeLive, WeWork’s side project to sell apartments, will have $ 600 million in revenue, according to the company book The Cult of We. It never expanded beyond two buildings with several hundred apartments.

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