Open Thread - Thurs 16 Feb 2023: Who Did This When We Were Young?

Who Did This When We Were Young?

Another young business founder, Charlie Javice, is in the news as she's being sued for JP Morgan for essentially lying about her business, Frank. This comes right after the Sam Bankman-Fried, FTX, crap. Which was just a bit after the Elizabeth Holmes and her failed Theranos business, scandal. These three entrepreneurs seem to have several things in common, and I'm wondering if other business founding scammers, especially from our younger years, had the same things in common too. What do you think?

Some Quick Summaries:
Elizabeth Holmes founded Theranos in 2003, when she was 19. Her father was a VP at Enron, then held executive positions in the government at the EPA amongst other government agencies. Her paternal many great+ grandfather was the guy who founded the Fleischmann yeast company. She went to Stanford, but dropped out and used her tuition money to start her company when she was 19. Theranos promised a medical revolution by using computers to analyze just a few drops of blood to diagnose a wide range of diseases and so on. She was recently found guilty of fraud and will be going to jail.

We know a lot about Sam Bankman-Fried's recent story and here's a bit of background. His parents are both professors at Stanford Law School. His brother is a former Wall Street trader, his aunt is a dean at Columbia University. He went to MIT, graduating from there in 2014. In 2017, when he was 25, he founded Alameda Capital, in 2019 he started FTX, a crypto-currency exchange and hedge fund, which failed spectacularly in 2022.

So, Charlie Javice, in her 20's at the time, founded a company named Frank in 2016. This company was supposed to help students find financial aid through software aimed at improving the student loan application. Supposedly there were over four million people who had signed up with their names and emails to use the software. Frank was bought by JP Morgan recently. JP Morgan found out that Frank, and Charlie Javice especially, was lying about most of what the company had done/did, and its huge customer lists especially. Those four million? The details and names were fabricated by Javice.

Javice started Poverup, a small microfinance organization with big ambitions when she was in high school. Her brother was her co-founder at Poverup. Poverup was supposedly a non-profit (there is no evidence the organization registered as a non-profit) (see the Yahoo story) which supposedly took small contributions from students and used them to make loans to entrepreneurs in poor countries to help lift them out of poverty.

Javice went to the Wharton School at the University of Pennsylvania, graduating in 2013. She launched Tapd, software that supposedly connected young people with job offers via text messages, soon after. It went south almost immediately, and she had to fire all her workers, go to court in Israel (and lose), and lost hundreds of thousands of dollars. This failure was a 'teaching moment' or so she billed it, when she started up Frank in 2017.

Common points:
All are young; most (maybe all, I couldn't find information about Javice's parents) from upper class families; they all started companies when quite young; and are supposed geniuses. They are all ivy league educated (fully, or partly if they dropped out early to start their companies). Do they have no morals or perhaps just no maturity to understand the actual 'rules'?

I want to note this is not a diatribe against younger people who are into commerce, or whatever. Some are super successful, like Mark Zuckerberg who went to, and then dropped out of, Harvard, and most others do good work - whatever they are working at. I'm just bemused at myself for not noting the young arrogant failures of my generation. I know there's got to be some examples of people like this from our younger days, but I can't remember any. I guess I'm getting old. So who did this? What 'youngsters' (remember these three started when they were in their teens or early 20s!) did this crap when we were young? Why can't I remember this stuff? Maybe I didn't pay attention, that must be it!

[video:https://www.youtube.com/watch?v=lcIK3akktLU]
Music to Bop To! This is what I was doing in my late teens/early 20's. Used to go to every Huey Lewis and the News gig in the San Fran Bay Area (and north of the Bay Area). Fun times! Was a fan before they hit it big. Huey Lewis and the News: Working for a Living

So, thanks for reading and here's the open thread - and remember, everything is interesting if you dive deep enough, so tell us about where you're diving!

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Sima's picture

Hope your day is going, or has gone, great. I am off with a busy day again. The night before last it was in the 20s! Brrrr. Now it's cloudy, and last night it was in the low 30's. Warmer. Still the trees are budding, the berries are budding, the garlic is growing and seeds are getting ready to be planted!

Let us know what's up, and what you are thinking. Ohh, and if you remember and young geniuses almost pulling off scams back in the 70s or 80s!

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If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so

Living in a gilded universe, they assume rules do not apply to them.

We were not around that class of people much so many years ago.

Probably why scammers were not on our radar?

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Sima's picture

@QMS
Maybe there were/is little or no consequences in their young lives, everything was cushioned for them. Good point!

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4 users have voted.

If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so

usefewersyllables's picture

of people that I refer to as "to the manor born": I went to college with a lot of 'em back in the '70s. Old money, no scruples, getting a degree in any random thing just as a stopoff on their inevitable way to B-school: the perfect CEO class. I'd regard most of them as sociopaths, and their businesses are probably mostly scams. If they produce an actual product, it is pretty much by accident.

Most of the engineering types I went to college with didn't end up as CEOs. VP of Engineering, maybe, CTO, maybe; but not as the fattest cat. The truth of the matter is that most engineers want to engineer, more than they want to press the flesh and skim whatever they can get away with. There are essentially no engineer-driven companies any more: boards of directors will always hire someone "to the manor born" to be their official figurehead, to look pretty and and spend their lives playing golf with their investors.

The flare-lit tipoff for me has always been people who get MBAs. I define MBA as "professional skimmer", and business schools vomit them out by the thousands. My apologies to any MBAs here, but my experience has been that the people who have them have simply learned how to work the angles, and take their percentage off the top, without actually producing or contributing anything. They make great CEOs. They know how to dress, what platitudes to mouth, who to fleece, and how to spend other people's money. What's not to love, right?

End of rant. Once again, my apologies to any MBAs who actually have scruples. I'm sure they are out there, but I've never met one in the flesh. I have, on the other hand, worked for a bunch of 'em, and I've watched them drive companies straight into the ditch more often than not...

Your mileage may vary.

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Twice bitten, permanently shy.

Sima's picture

@usefewersyllables
My father was one of those engineers who only wanted to engineer. He didn't come from a well to do family at all, his father was an electrician, and his grandfather was a poor 'orphan' kid from Britain sent over to Canada as a farm 'worker' (i.e. slave) in the early 1900s. Anyway, Dad engineered ICUs and when he was told he had to move to management as a VP, he quit. Heh.

I've known a few MBAs too, and by and large, your description fits. Wonder if it's part of the schooling, or training? I dunno.

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5 users have voted.

If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so

enhydra lutris's picture

I'm sure they existed, but I didn't even know any small time grifters. Not only the wrong social and/or economic class, but grew up disliking "the right people".
As Woody noted in the Ballad of Pretty Boy Floyd, which I learned young:

Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.

Though I liked writing with fountain pens, once I eventually got my hands on one, I had no interest in joining or knowing those referred to as using them nefariously.

be well and have a good one

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That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

Sima's picture

@enhydra lutris
I like fountain pens too! And calligraphy pens. I don't think I've known any small time grifters either, although.. yea, I dunno, maybe this guy. In England I went to school with someone who became a Lord in the House of Lords upon the passing of his father. He was in the archaeology department because it was supposed to be 'easy'. I think he almost flunked out.

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4 users have voted.

If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so

their profits for an extended period of time.

That is why they are all in for the war in Ukraine.

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Sima's picture

@humphrey
2 years? Gads. I don't think Ukraine can survive that long. I suppose all those arms are paid for by OUR money, right? What do WE get in return? A hug by Zelensky? Ewww.

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3 users have voted.

If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so

A train derailed in Michigan. It was carrying hasmat.
Now, what the UN's Agenda 2030 is pushing, when land and water is polluted, governments must remove the locals affect and relocate them into Smart Cities.
Smart City is a euphemism for Penitentiary.

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"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981

snoopydawg's picture

@on the cusp

lately. I think it’s 7 burning trains just this week. 2 can be a coincidence but more than that and it’s a plan. What are you hearing about the one in Huston? A truck got stuck on the track and the train crashed into it.

Then there are all the food plants on fire everywhere and don’t tell me that’s just a coincidence too. Plus the smart cities popping up overnight…

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Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.

@snoopydawg was crossing over the tracks in Splendora, TX. Splendora is 37 miles north of Houston. The tracks run beside and parallel to I-69/Hwy 59. It isn't heavily populated right there, and there are ranches all around, but no farming to speak of, other than hay fields.
Winds could easily blow the chemicals to Houston. Also, starting about 10 miles south toward Houston, that area is heavily populated.

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"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981

Sima's picture

@on the cusp
The crossing didn't have any warnings or anything. I read that the police (or whoever) were bemused because the truck driver should have looked down the line and seen the train coming, but who knows... who knows. It's so sad, and so scary!

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3 users have voted.

If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so

Sima's picture

@snoopydawg
I looked it up and the list of train accidents in a year is nuts. And the number of accidents do seem to be going up, at least according to the lists at wikipedia. Maybe it is part of the plan, it sure seems to be!

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3 users have voted.

If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so

Sima's picture

@on the cusp
PSR or whatever that crap plan is that the railroad CEOS joined into which shafts the workers and makes the trains unsafe. Of course, that could all tie in to the 'smart city' crap. It's funny how the government is telling those in East Palestine (coincidence, the name?) Ohio that the municipal water is safe, BUT, drink bottled water or well water, just to be safe. So which is it? IS the municipal water safe, or not?

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3 users have voted.

If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so

I come from a generation/class that was indoctrinated with what I call the Horatio Alger/captain of industry myth. Examination of these myths shows 2 fundamental qualities - 1, at some point along the line the person had to actually do something, produce something of value (or that at least appears to have value) and 2, if you failed you lost real money, or at least your backers lost real money. As a corollary you had to start with real money or convince someone to invest (risk) real money. This produced people like Edison, Jobs, Gates,and Zuckerberg, people who's products were of dubious generation or value, but they were at least real.
This is no longer the case. Today if a wealthy person invests money it is first not real money, and second if that money is lost Uncle Sam will bail them out. There is no risk. No need to be or try to be a Jobs or a Gates, you can be a Trump - much easier.

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6 users have voted.

On to Biden since 1973

I have known numerous young people who were just better than everyone else, due to family name, and money. And their pedigree degrees. Most of them failed at their various business ventures, none went to jail, and they all did/are doing just fine with Daddy's money. One was an attorney who was successful as a vp of a Koch industry, until she was fired. Afterwards, she lived off her Dad's fortune. I mentioned a friend earlier this week that died suddenly while visiting her parents. 59 yrs old. That was her.

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4 users have voted.

"We'll know our disinformation program is complete when everything the American public believes is false." ---- William Casey, CIA Director, 1981

Sima's picture

@on the cusp
Yep, family name and/or money. Thing is, I've known people with money, not necessarily family name, that you wouldn't even know they had the money. I guess it's just that people are people, some are good, some are bad. Some are given benefits through their family connections and schools and so on that most people don't have. I'm going to have to see if I know of anyone with those benefits who have done well for the world. I suppose that means defining 'well for the world' too!

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3 users have voted.

If you're poor now, my friend, then you'll stay poor.
These days, only the rich get given more. -- Martial book 5:81, c. AD 100 or so
Nothing ever changes -- Sima, c. AD 2020 or so