Scams on the internet are constantly changing. Con artists are most likely striking a computer or smartphone near you right now. The FBI reported a total loss of $3.5 billion due to cybercrimes in 2019, a new high. Here are some of the biggest scams in technology you should know about:
Theranos, a failed blood-testing company, was one of the largest startup scams ever. Theranos claimed to have patented technology that allowed clinicians to analyze patients’ blood using only a tiny fraction of the blood in routine hematological testing.
They needed between a tenth and a thousandth less blood if we believe the company’s claims. The issue arose when the public and investors found out that Theranos’ unique blood-testing technology was fake. For years, Theranos misled investors, patients, and the press.
In multiple media appearances, CEO Elizabeth Holmes and the business fabricated test results and deceived partners about the potential of Theranos’ technology. It also released unfinished devices that did not operate as promised and rejected misconduct allegations.
Mozido is a mobile payments company valued at $2.3 billion in 2014. The company sought to create white-labeled financial solutions for the 2 billion “unbanked” people who have access to mobile technology but don’t have a typical bank account.
Mozido had big hopes to change the way people pay for things with their phones in significant markets, including India, Africa, and Southeast Asia. However, Mozido’s intentions were eclipsed by the fraud perpetrated by the company’s founder, Michael Liberty.
Liberty got charged with fraud by the SEC in 2018, alleging that he duped 200 investors out of $55 million. SEC also accused him of diverting funds from investors to his accounts through a series of shell companies he set up between 2010 and 2017. His other charges include embezzling to fund his other businesses and pay off his debt.
Virgin Hyperloop One claimed to change the commercial public transit landscape. Based on a notion first proposed by Elon Musk in 2013, the company’s leading technology uses linear electric motors to push a magnetically levitated pod through a low-pressure tube at speeds of up to 760 miles per hour.
The technology is similar to the maglev bullet trains that are in Japan. However, Hyperloop’s bold vision for the advent of mass transit received a slew of high-profile court cases and a variety of wrongdoing at various levels of management within the firm. Brogan BamBrogan, Hyperloop’s former CTO, and three other former workers sued the firm in 2016, alleging that it had broken various labor laws and violated its statutory duty.
During his time at the corporation, BamBrogan also claimed he was subjected to defamation, abuse, and emotional distress. Hyperloop countersued, saying that BamBrogan and the other three plaintiffs were part of a botched takeover attempt.
Renato Libric, a Croatian-born entrepreneur, had a clear goal: to disrupt America’s vast gift card market. Bouxtie (pronounced “bow-tie”), Libric’s firm, offers consumers customizable digital gift cards with custom inscriptions and artwork to distribute to family and friends.
Libric used various tactics to inflate his company’s financial health to create the appearance of a thriving, attractive startup. After Libric secured a million dollars to expand the platform, he later revealed that he had used a series of complex deceptions to persuade investors to keep funding his company.
Libric forged initials on checks to appear that a public company was courting Bouxtie with a takeover offer. He also obtained a “loan” from a Las Vegas business that had previously invested in Bouxtie by forging various signatures of the company’s board of directors. Libric planned to transfer the monies obtained illegally into Bouxtie shares later.
A 2001 MIT alumnus, Albert Hu, created Asenqua Ventures, a venture capital firm. Hu used a “hedge-fund method” to persuade various individual investors to spend about $5 million on technological startups.
Hu stated four years later, in 2005, that he needed to shift Asenqua to Singapore for tax and privacy concerns. Albert’s deceptions caught up with him. He got deported from Hong Kong to the United States in 2009 to face seven counts of wire fraud. Hu received a conviction and got a 12-year sentence.
For a successful, revolutionary startup, “fake it ’til you make it” is nearly always a factor. Some businesses take their chances a little too far. Some companies survive when this happens, some rebrand to remove themselves from their founders’ celebrity. Others vanish into thin air.
If there is one thing we thought we wouldn’t see is the start of World…
March 15, 2022 | 3 Minutes to Read
Most people are unaware that if they have followed the road laws for three years,…
February 17, 2022 | 3 Minutes to Read
Being able to hug a loved one is a blessing that we often take for…
February 17, 2022 | 2 Minutes to Read
Mary Golda Ross was a well-known aerospace engineer and mathematician. She is now being honored…
February 16, 2022 | 3 Minutes to Read