Today in Grifts
"Don't ever come back here, Muffin!"
The Elizabeth Holmes Theranos fraud trial starts today, and along with John Carreyrou (eating a muffin) and fans in Holmes cosplay, The Verge’s Liz Lopatto will be there to cover it. If you’re fuzzy on the details, Liz has already written a handy recap of the rise and fall of Holmes and Theranos, and how This Whole Thing Smacks of Gender.
Elizabeth Holmes may have gone from being the Steve Jobs of fake blood tests to the Steve Jobs of investor fraud, but lesser grifters are everywhere today. In Lander, Wyoming, the CFO of Wyoming Catholic College, Paul McCown, collected more than $1 million in fraudulent PPP loans for his fake hand sanitizer business, then when he got caught paid the money back by scamming a New York financial planning firm run by dewy-eyed newborn babies out of a $15 million loan against a fictional $750 million personal fortune.
The one step the investment company took to independently confirm [the Wyoming banker being impersonated by McCown] Kendall Hayford’s existence was to call the bank. The call went to Hayford’s voicemail which, in the caller’s mind at least, confirmed Hayford’s existence and his position… That was good enough for Ria R Squared. The next day, May 11, they executed the $15 million transfer to McCown’s account.
Come for the main grift, but stay for a memorable cameo by the college’s “director of horsemanship” and alleged sub-grifter Kyle Clement, who says: “There’s more two-legged wolves in this place than I could ever have imagined.” They always say yeehaw, but they never ask “haw ye?”
The Hall of Lesser Grifters
This New York Times story about the fishy roadside shooting and financial misappropriation accusations against a South Carolina lawyer contains a lot more unexplained deaths than I expected. House prices in the San Francisco Bay area are completely fraudulent. The incompetent are investigating the corrupt in NYC, reports David Gauvey Herbert for NYMag, where the NYC lifeguard corps is “something of a national joke in the profession with a fatality rate that, at points, has been three times the U.S. average” and is the subject of a long-ongoing probe by the New York Department of Investigation, which appears to be a branch of New York City law enforcement tasked with speculating in leaked conference calls about what kinds of things they would do if they ever did their jobs. “Printer toner fraud” sounds redundant but apparently it’s possible to be even more fraudulent than the normal scam that is printer toner. Ask the Ethicist: My friend secretly has two full time jobs. This season of Real Housewives of Beverly Hills revolves around Real Housewife Erika Jayne’s Real Elderly Ex-Husband’s Real Alleged Embezzlement. Donald Trump, the King Midas of grift who turns everything he touches to crime, will commemorate 9/11 by doing alternate-feed pay per view commentary on an unsanctioned Evander Holyfield fight. Our brave First Responders deserve nothing less. It’s not exactly from today but I couldn’t resist including this story about Jennifer Coolidge pretending to be “Muffin Hemingway.” And finally: Statue Bad.
Today in Crypto Grift
…but I repeat myself. The SEC has threatened to sue Coinbase over a program called “Lend,” which would have offered Coinbase customers the opportunity to earn 4% interest on their holdings of the company’s not exactly US dollar backed stable-ish coin. “We Are Extremely Innocent And Confused” insists Chief Legal Officer Paul Grewal, projecting way back to the cheap seats. CEO Brian Armstrong wrote a twenty one tweet thread pretending to have no idea how assets pooled for the purpose of investment with the expectation of profit could possibly be considered a security. In response, an SEC twitter account engaged in a bit of light trolling:
But will Matt Levine find different ways to tell a story in which this program both is and potentially isn’t a security? No, the program, he writes, “is pretty straightforwardly an investment contract and thus a security.” But also (surprise) yes! He eventually concludes that:
Obviously this thing — where you have an account at Coinbase, Coinbase lends your Bitcoins to people it chooses, and you get interest from Coinbase — is a bank account.
…which from Coinbase’s perspective is much worse, because bank accounts are far more tightly regulated than securities. In fact in its pitch to customers, Coinbase explicitly compares Lend to “a traditional savings account.” The whole question here seems to be: is cryptocurrency Beanie Babies or Canadian Tire money? Either way it’s hard to see how Coinbase can argue that USD Coin is neither an asset nor a currency, but still a safe and reliable store of value that will earn customers a steady 4% interest.
Finally: I’m not sure what the New York Times Magazine thinks we all do for fun, but here’s how to catch a bat.
Today’s Song: Belly & The Weeknd, “Die For It” (ft. Nas)
~ never attribute to malice that which is adequately explained by tabs ~
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Ring ring ring banana phone.