Lessons for aspiring scamsters & frauds🤑

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Like I’ve said earlier, this is the golden age of income redistribution. Unfortunately, hardworking income redistributors are labelled as fraudsters, scamsters, hucksters, and snake oil salespeople. It doesn’t even make sense. What snake produces oil? As if people are running around catching snakes, wringing them like a wet cloth to squeeze out the oil and then go sell it – Saffola Snake Oil. What nonsense!?!

Running a successful income redistribution scheme (scam) is just like building a company. I mean, it’s relatively easier to make money when redistributing income (scamming) than running a company, honestly like all the other morons, but it’s still hard.

As aspiring scamsters, it’s not only important to learn by scamming but also to learn from the mistakes of other successful and failed scamsters. One of the biggest scams in the last 10-15 years was Theranos. Elizabeth Holmes (Lizzie) started the company, raised about $500 million, and the company at its peak was valued at $9 billion before tatti💩 hit the fan.

Today, for all aspiring scamsters, the startup world is a veritable goldmine. We’re in a world where venture capitalists (VCs) are sitting on a lot of money and are desperate for high returns. There are too many VCs, and the competition is intense, meaning there’s a lot of FOMO. Given this environment, they’ll fund anything. Take the case of Juicero. The company sold fruit juice, cut fruits and vegetables in packets. That’s it, no fucking AI, ML, Blockchain etc. The company raised $400 million and later shut down.

Trust me, if you start a company and your whole pitch is that you can help people capture their farts and bottle it as limited edition perfume, Softbank and Tiger Global will slap you with a$500 million cheque before you can say the phrase ” we are valued at”.

Since Lizzie and her ex-boyfriend were caught, their trial began this month. So, today, we’re gonna learn from the mistakes of Theranos and Elizabeth homes and understand where she went right and wrong so that you can learn how to redistribute income (scam) by scamming gullible VCs successfully.

The anatomy of a scam

It’s all about the story

People are suckers for a good story. Take any good scam, and you’ll notice the stories are always impeccable. A good story is like a drug, and our brains love stories. Our brains aren’t equipped to deal with all the information that they’re constantly bombarded with. They take shortcuts like looking for patterns and readily available information to make sense of things. As an aspiring scamster, you need to understand this tendency.

Take the case of Elizabeth Homles; she spun a brilliant story. She was a child prodigy, and much to the disappointment of her high society parents, she quit Stanford at the age of 19 to start Theranos.

I mean, just that is enough to get anyone hooked. It’s a classic story of a teenage genius planning to revolutionize humanity — which we’ll get to in a minute, I mean, how can it not work?

Verdict: 10/10 Elizabeth Holmes got the story part of the scam down perfectly, it was almost a work of art. It’s so good that, if she had actually put her storytelling skills to good use legally, she could’ve made quite a bit of money. Not as much as if she had pulled off the income redistribution scheme (scam) perfectly, but still.

Go big or die poor

When you’re running an income redistribution scheme (scam), you can’t pitch silly ideas. I mean, if you’re going to say your company — even if it’s a scammy one, is working on building a neo bank, what’s makes your scam special? My aunt, who failed her 7th grade, is also building a neo bank. No, your idea has to be visionary, outlandish bordering on unbelievable. The more unbelievable the idea, the better it is.

Take the case of Elizabeth Homes, she wanted to revolutionize healthcare. The first idea she started with was straight from a sci-fi movie. She wanted to build a wearable patch that people could stick on their arms that would test the blood and also deliver medicines. It was like sticking a computer and a blood lab on your arm. This sticker would deliver preventive medicines instantly, and millions of lives would be saved around the world. That was the pitch, at least.

This was clearly not possible due to obvious reasons, but it didn’t matter. The more unbelievable the idea, the better the odds of Tiger Global and Softbank slapping you with a million-dollar cheque.

But here’s the thing, coming up with an outlandish idea isn’t as easy as it sounds. Because today, legitimate hardworking, law-abiding suckers are working on pretty much everything you can imagine, legally, of course.

So, your idea has to be something mind-numbingly crazy, like:

A bar and hotel on the moon – the ultimate high
A cure for ageing and death by using the blood of young people
Saas Bahu serials for men
Fair and lovely that actually works
Artificial intelligence software that can make profits from trading

It can be another no bank, sorry, neo bank or payments application, that’s bloody boring!

Verdict: 9/10. Elizabeth Holmes had the perfect story.

The art of faking it till you make it…or rather, run away with the money

Nimbleness is the hallmark of every successful income redistributor (scamster). Look, when you’re scamming gullible venture capitalists and the general public with your outlandish idea, at some point, they’ll start asking questions. So, just having a fantastic idea is not enough. You need to be able to pivot to something quickly, that’s equally unbelievable but slightly possible so that you have something to show for until you run away with the money.

Scamming is a long game, so you need to be smart. Take Elizabeth, when she initially came up with the idea for the patch thing, she went to Phyllis Gardner, the Professor of Medicine at the Stanford University School of Medicine and asked her for her opinion. Professor Phyllis told Elizabeth that her idea wouldn’t work.

“She came to me with [an idea for] a patch that would test for a microbe and then deliver antibiotics,” Gardner tells Refinery29 over the phone from her on-campus home. “I said, ‘Oh, that’s a lovely idea, but it won’t work.’ It was so naive. Antibiotics are not potent. That’s why you have big IV bags.” Gardner wanted to ask Holmes if she was “smoking dope,” but she didn’t. Instead, she told Holmes her idea wouldn’t work. The student, she says, refused to listen.

But Elizabeth didn’t listen to her. She wasted quite a bit of time trying to make the patch work, but it didn’t. But a successful scamster must be nimble and resilient. Elizabeth immediately pivoted to a new idea. Traditionally, if you wanted to get a blood test done, you’d go to a hospital, and some german looking dude would collect one or two vials of blood. There were needles, pricking, poking and squeezing. This is because running multiple tests requires a lot of blood. It’s either that or there’s a vast global conspiracy where hospitals collect more blood than needed for a test and sell it in black markets (mind-blowing, right?).

So, Elizabeth again put her brilliant storytelling skills to work. She created a story about how she hated needles as a young girl and wanted to change how painful and inefficient blood tests were. Instead of you having to get poked and squeeze out vials of blood, she’d build a machine that would run 100s of blood tests with just one drop of blood. Like this👇

The blood would later be tested on a machine ironically named Edison, which didn’t work. I mean, it was bullshit, and it wasn’t possible, but it didn’t matter:

One of the big problems that never was solved for Theranos was the equipment needed a specific volume, and since Holmes was set on using a blood prick they would have to dilute the blood, which would skew the data on analysis. Another problem with the amount of blood drawn itself was the composition of the blood taken from a finger prick would not have a common concentration like what would be found if taken from a vein. This would lead to varying concertation of molecules like lipids and proteins after each sample is taken, which would distort the data.

Since Edison wasn’t working, Theranos tested the blood by diluting it and using machines developed by competitors like Siemens. Even when Elizabeth used to demo the machine at her office in Palo Alto, she used to take people out of the office just long enough so that a Theranos employee could take out the blood sample from the Edison machine, test it with a Siemens machine downstairs and then give the test. When she used to demo it outside, like at pharma giant Novartis in Switzerland, for example, she used to show pre-recorded results since her shitty machines never worked.

When Elizabeth wanted to partner with Walgreens, the second-largest pharma chain in the US, she did the same thing again. She spun a web of bullshit without actually showing anything to Walgreens. When Kevin Hunter, a consultant hired by Walgreens to vet the tech, started asking questions, Elizabeth did everything to bullshit him. One time, Elizabeth’s then-boyfriend Ramesh Balwani even followed Kevin to the toilet at the Theranos office, fearing that he would find something.

She even threatened Walgreens that she’d pull the deal if Kevin continued to ask questions. Now Walgreens was in a life or death completion with CVS, so they were scared and sidelined Kevin. They even opened 40 wellness centres in Arizona with Theranos machines which were faulty and weren’t working. Such is the power of bullshit. This later ended with fines and lawsuits after Theranos gave out wrong diagnoses such a pregnancy status, HIV and even cancer. Several patients who were misdiagnosed took the wrong medication.

You need to lie, overpromise, and make shit up constantly. This is the only way you can successfully scam a lot of money. This is how you can keep pumping up the valuation of your company and keep raising money at higher valuations so that you can scam the maximum amount of money and run away.

Verdict: 20/10. Elizabeth was a master of storytelling. She was the Picasso of spinning bullshit. As aspiring scamsters, we all need to learn from her.

Sell it till you make it

Selling is everything. Obviously, you’re gonna redistribute the income and escape, so the only thing you need to do is keep selling your story. Elizabeth was again a master at it. She was constantly selling Theranos even though they barely had a product that worked, even by mistake.

Elizabeth was everywhere, from conferences to magazine covers. At the height of the Ebola crisis, a disease that had a nearly 50% mortality rate, little Lizzie tried to use the crisis to raise more funding. But here’s how unprepared Theranos was:

One evening, one of Aaron’s colleagues inserted an Ebola sample in a miniLab and left it operating overnight to complete the test. The machine happened to be sitting directly beneath an air vent and, as was often the case in the R&D lab, its external cover had been removed so engineers could go in there with their tweezers if something got stuck Because they put this instrument below an HVAC vent, what they did was it took the amplicon and it actually took it all over the building. So this is like a molecular diagnostics laboratory’s worst nightmare. Those billions of DNA strands created by the PCR reaction—the socalled amplicon—had aerosolized and been blown throughout Theranos’ offices. They weren’t dangerous per se; they were just tiny bits of DNA from inactivated virus. But they were everywhere. And that meant Theranos could no longer test accurately for Ebola. Because every test it conducted would now be contaminated with those stray strands of amplicon and throw up a false positive.

But you gotta keep selling! Do you know why selling works? Well…how do I put it delicately. Because people are morons, and they’ll believe anything. Here’s an example of the returns chart of Bernie Madoff, dude, It’s a straight fucking line, and people, including the smartest hedge funds, still chose to invest billions.

Verdict: 10/10. Lizzie was a master salesman. Even as Theranos was unravelling, she was constantly selling.

Deflected credibility

While you’re pumping up the valuation so that Tiger Global and Softbank can slap you with a $500 million check, you need some credibility. You can’t just half-ass the entire scam. So you need to have some qualified employees, a qualified board and so on. But you need to do this in a way so that nobody gets in your way while you continue with your income redistribution (scam) master plan.

And when it comes to this, Elizabeth had her successes and failures.

Board: Elizabeth assembled what was an all-star cast of board members. But here’s the genius, except for one or two, none of the board members had any medical or diagnostic experience. Well, unless you count all the people the military generals killed, bombed, and maimed. This was the board:

George P. Shultz (former U.S. Secretary of State), William Perry (former U.S. Secretary of Defense), Henry Kissinger (former U.S. Secretary of State), Sam Nunn (former U.S. Senator), Bill Frist (former U.S. Senator, senate majority leader and heart-transplant surgeon), Gary Roughead (Admiral, USN, retired), Jim Mattis (General, USMC), Richard Kovacevich (former Wells Fargo Chairman and CEO) and Riley P. Bechtel (chairman of the board and former CEO at Bechtel Group) – Wiki

She also didn’t raise any funding from mainstream VCs or people who focussed on healthcare. It was all from people who didn’t know anything about healthcare.

Here’s the genius of this setup. Since none of these old white people had any medical backgrounds, Elizabeth could focus on scamming while these big names gave her cover and credibility! My god, I want Elizabeth’s autograph.

Employee control: Henry Mosely, the Chief Financial officer at Theranos, was fired because he confronted Elizabeth after looking at the numbers, and none of them made sense. But Elizabeth fired him, and she needed a reason. So she had her IT guy search Henry’s laptop, and luckily she found that Henry had downloaded some porn videos.

There were several firings at Theranos. To ensure none of them talked, Elizabeth had hired the best of the best lawyers to harass and bully the employees into not talking. She was straight-up gangsta. But eventually, several of them started talking.

Verdict: 4/10. Elizabeth sucked at it. When you’re building a scammy startup, you need to treat your employees really well. They need to think that you’re their god, their personal saviour. You need to buy them good food, alcohol, maybe take some of them to strip clubs? You need to blind them with your Karishma sorry charisma so that they don’t ask you any questions until it’s too late like Bernie Madoff did. By that time, you should escape to Angola with the money in Bitcoin.

Weird eccentricities

All the things I described are like the cake but need some icing, some cherries on the top. Take the case of Elizabeth, she was obsessed with Steve Jobs, so much so that all she ever wore were black turtlenecks like Jobs. Not just that, she even faked her voice. I ain’t shitting you. Elizabeth’s normal voice had a high pitch, but she deliberately spoke in a deep baritone voice.

Not just that, she doesn’t blink. I personally find it creepy, but hey, such eccentric quirks make for excellent stories.

Bloody hell, that’s bloody genius. Even if you say the dumbest and stupidest shit in a deep voice, you can pull it off.

Speaking of Steve Jobs, watch this👇

When you get caught, quote Gandhi

When John Carreyrou broke the news in The Wall Street Journal that Theranos was mostly a fraud, Elizabeth went on Jim Cramer’s Mad Money and quoted Gandhi.

First they think you’re crazy, then they fight you, and then all of a sudden you change the world.

I shit you not. Watch this video:

That takes some guts. Quoting Gandhi when you just lost your investors $700 million. There’s a valuable life lesson here, never stop bullshitting no matter what. The lesson for all you talented doe-eyed aspiring income redistributors is always to punch up. It doesn’t matter if you are scamming, always quote Gandhi, Martin Luther Kind, Aristotle, Kangana Ranaut and other legendary humans.

Verdict: 25/10. Liz pulled of Gandhi brilliantly. You might be scamming, you might be wrong, but you can never ever be in doubt. Confidence to the sweet end!

Relationships matter

Whether you are an honest income redistribution (scammer) or an idiotic law-abiding moron, relationships matter. You need support to redistribute income successfully. But unfortunately for Lizzie, her then-boyfriend was a real fucking asshole.

Lizzie was secretly dating this dude called Ramesh “Sunny” Balwani. He had made some money by selling his stake stake in a tech company just before the dot-com crash. In 2009 Theranos was on the verge of running out of money. Ramesh Balwani stepped in to guarantee a line of credit, and he also became the President and COO of Theranos.

This fellow was a real piece of work. As poor Lizzie was working hard to pull of the income redistribution scheme of the century, here’s how supportive this asshole was👇

Scott Budman

Poor Elizabeth.

Where did Elizabeth go wrong?

Elizabeth was smart as a whip. But she waited far too long to convert her money to Monero and then escape to a country without extradition like Russia, China, or Uganda. On a side note, Bitcoin is traceable, Monero isn’t!

The rise of monero comes as authorities race to crack down on cyber crime in the wake of a series of audacious attacks, notably the hack on the Colonial Pipeline, a major petroleum artery supplying the US east coast.

“We’ve seen ransomware groups specifically shifting to monero,” said Bryce Webster-Jacobsen, director of intelligence at GroupSense, a cyber security group that has helped a growing number of victims pay out ransoms in monero. “[Cyber criminals] have recognized the ability for mistakes to be made using bitcoin that allow blockchain transactions to reveal their identity.”


The easiest part is to build the scam, the harder part is figuring out the right time to end it, and Elizabeth had terrible timing.

Verdict: 10/10. When you have built a scammy company and the valuation is at its peak, you need to cash out, convert your money to Bitcoin and run away to Kazakhistan. But Elizabeth was an idiot. After a while, she started believing her own story that she could revolutionize healthcare and save mankind.

Additional homework to learn more about Lizzie’s scam

Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou



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