Silicon Valley's biggest fraud is on trial | Hacker News Reader

Silicon Valley's biggest fraud is on trial

axios.com

40 pointsstarkd40 comments

The actual story is the opposite of that clickbait headline: the trial hasn't started yet. Which is to say, there isn't a story.

Threads that add nothing new to what has been repetitively discussed countless times are off-topic for HN. When new information appears, then there will be something to discuss.

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&so...

The ”new information” is that jury selection starts Tuesday.

That's not a story.

Seems the title writer was using the second definition of “on trial”

https://www.merriam-webster.com/dictionary/on%20trial

Biggest fraud so far. [Read in Homer’s voice]

Talk about the wheels of justice moving slowly

After going through one pregnancy she gave up on this stalling tactic. Must have looked at the baby and figured children weren't worth the ROI.

? She gave birth like a month ago. It's not even physically possible to be pregnant again in that time frame.

if you lend her $100million she'll tell you how she did it!

It's OK to be critical of Theranos but I think it's pretty bad to criticize a woman for deciding to have a child.

maybe she got the pregnancy tests from theranos

> but I think it's pretty bad to criticize a woman for deciding to have a child.

Why? I think you shouldn't criticize the child itself but if the woman is bringing it into this world for a nefarious reason like likely playing for a jury's sympathy during a trial, revenge, exploiting immigration loopholes or blackmail. Why shouldn't she be criticized over it? It usually also means that the child will be neglected, in one form or another, after it served its purpose.

Have you ever met a real-life sociopath? I have. Holmes appears a like bona-fide sociopath trying every dirty trick to manipulate her surroundings, playing the "poor woman" card to weasel out of a harsh sentence.

This case is wildly embarrassing to a huge number of elites including some of the largest funders in the VC world: Tim Draper of Draper Fisher Jurvetson, former secretary of defense Jim Mattis, the most important democratic power broker David Boies of Boies Schiller Flexner (who almost certainly has criminal liability that was ignored) and on and on.

This case wouldn't be prosecuted at all if not for the public scrutiny. The question left largely unanswered was what favors did elizabeth exchange with these old powerful men to get them to first invest and then to become unnindicted coconspirators in her schemes.

Oh god. I hadn't thought of this. Really hoping this doesn't go full Weinstein.

Was it a Silicon Valley thing though? BoD and investors were all from outside the Valley.

Reading Bad Blood, the grift was definitely aided by that Stanford branding and the associated connections.

Yes, it was a silicon valley thing. Their first and chief investment was from Tim Draper who all but invented silicon valley venture capital. Were it not for that investment Theranos would not have happened at all.

Tim Draper invested $500K ($0.5M), of the ~$275M Theranos raised in total.

And he wasn't on the board. I think it's reasonable to invest seed capital in unproven but interesting ideas, and it's unfair to blame seed investors if those ideas don't pan out.

500K doesn't seem much for VC.

I don't know the whole story so maybe there is something more to your argument, but on face value this doesn't sound like a strong argument. Early stage investing is high volume, low involvement, low due diligence kind of thing.

I would be a lot more embarrassed if I invested 100M into a 10 years old company that turned out to be a fraud vs 500K into a brand new pre-product team.

Tesla FSD should be up there

Can't agree more. How long have they been collecting money from customer for this promise?

Tesla isn't selling FSD and claiming it already works when it doesn't. Nor is FSD the crux of their business. They've shipped hundreds of thousands of EVs and have turned quarterly profits already. Also, FSD isn't physically impossible the way Theranos' tech was.

Yeah it’s not like Tesla is giving demos of full self driving that are actually being controlled by another human behind the scenes. Being overly optimistic with timelines and lying are vastly different.

For who has read "Bad Blood", this article doesn't have any new info, does anyone know any new pieces of information?

The new information is that jury selection begins next week.

Elizabeth Holmes / Theranos.

> Theranos had just a couple of experienced VC investors and only two board members with medical experience (albeit not in phlebotomy).

Phlebotomy is the process of drawing blood, in general medicine typically more like giving lots of or exchanging blood rather than a pin prick or even filling a couple vials for lab work. I worked with an office that was very clear they drew blood for lab work but would not do phlebotomy, I had to have the difference explained to me.

Shouldn’t Axois have specified anyone with hematology, immunology, or serology experience/education?

I don’t think they they SHOULD have had a phlebotomist on their board. That no one had drawn blood before; was the least of Theranos’s problems.

The link redirects me to an article titled ‘Pentagon: Two ISIS-K targets killed during Friday strike’

Maybe it was all just an elaborate prank played on the luminaries of the military-industrial-media complex. The first time Henry Kissinger, Rupert Murdoch, and their ilk experienced any sort of even the mildest of comeuppances.

At the price of putting the lives or health of innocent people at risk? No, thank you.

I think a little more deliberation on Kissinger, Murdoch and Mattis’s life is in order.

I commend your moral flexibility in associating those names with the term “innocent”.

Biggest fraud, yet.

It’s ridiculous! In multiple active cases we find out VC wired tens of millions of dollars without an iota of diligence to find out if the receiving party had legit books. Then VC cries foul and is 100% the victim. Shouldn’t there be some legal onus on VC to perform due diligence?

The moral for the legit startups out there is: be super duper clear and intentional with VC and meticulously document all the steps else you might find yourself in lawsuits for misrepresenting this and that to the apparently infallible VC.

Especially if you read the anecdote about Google Ventures. Apparently they did a bare minimum amount of diligence (went to get their blood tested at a Walgreens) and the fraud was obvious right away.

Wasn’t that at a much later stage?

In this case, it doesn’t sound like books were cooked. That would be motivated by falsifying past sales. In this case the future sales didn’t materialize.

What diligence would have saved you? You would have to learn enough about how blood tests work to conclude that it was not likely they had achieved it.

You could have passed on the investment unless they trusted you with the trade secret I suppose.

I’m not saying I have the right answer, but I am saying that it’s not as simple as checking the books.

You can learn yourself, or you can ask an expert. There were plenty of physiologists who could have told investors that it was simply impossible to assay accurate blood levels for most analytes based on a few drops of interstitial fluid. This was well known in the scientific community at the time.

Sorry. This blurb made me think cooked books:

> Notably, the company told prospective investors in 2014 that the company was on track to break even and generate $100 million in revenue. It brought in little more than $100,000 for that period.

Even if there was no cooking, how can they miss the mark by 1000x? How can VC be like “oh shit we were deceived. They said 100 million and it was 100 thousand.” It’s not rocket science to look at the operations of a company to determine if their claims are off by 1000x.

Edit: spelling.

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