I don’t have a problem with rich people, per se. Some of my favourite people are wealthy! They only get annoying when they walk around believing their wealth is a product of virtue instead of dumb luck. But I don’t even blame rich people for that too much — thinking, “I have this yacht because I am essentially better than the people in rowboats” is an understandable and (maybe the inevitable) result of privilege. How else could you sleep at night, right?
I do have a problem with people who aren’t wealthy but perpetuate the idea that there’s something virtuous about having money. So to provide counter-examples to that kind of thinking, I’ve compiled a list of 11 people who were seen as role-models and geniuses because of their worldly success, but were later exposed as dummies, frauds, or criminals. (Or all three!)
Before he was outed as a criminal, few were seen as more respectable or smarter than Bernie Madoff. His is a quintessentially American rags-t0-riches story — except for the part with all the crimes.
The son of a plumber, Madoff founded an investment company at 22, partly with money he’d saved from working as a lifeguard, and climbed the ladder of Wall Street until he was named chairman of the NASDAQ. For decades, rich people begged to be included among the select few he counted as clients, because he was such a genius, he could make money even when the market took a crap!
Except Madoff never invested his clients’ money. He put their deposits in an account, sent falsified returns, and paid any withdrawals with newer investors’ dough. It was an unimaginative, dull-as-dirt Ponzi scheme, notable mainly for its scale: At Madoff’s sentencing, Judge Denny Chin remarked that the accused’s crimes were literally “off the charts,” as federal sentencing guidelines for fraud top out at $US400 ($555) million in losses. Madoff’s scheme was worth about $US64.8 ($90) billion. Not bad for a plumber’s son, eh?
Geraldine Elizabeth Carmichael
Automobile executive/criminal Geraldine Elizabeth Carmichael didn’t try to appeal to Wall Street types. Instead, she struck a working-class rebel pose that 1970s blue collar folks trusted. Carmichael became a media darling by promising the ultra fuel-efficient, very inexpensive, three-wheeled car she manufactured would “knock the hell out of Detroit.” It was a car for Joe Lunchpail who needed to get to work but didn’t want to give his whole paycheck to foreigners from OPEC. Carmichael was, of course, conning these people by taking their money for a car that didn’t exist. She and others at Twentieth Century Motors were eventually arrested and charged with conspiracy, grand theft, fraud, and counterfeiting.
The wild twists and turns of her story of required a multi-part documentary from the Duplass Brothers to fully unpack.
Affecting the black turtleneck of Steve Jobs, Theranos founder and CEO Elizabeth Holmes earned fawning press coverage and the trust of heavy hitters like Rupert Murdoch, Walmart’s Walton family, and Betsy Devos with her promise of a groundbreaking revolution in medical technology. The Edison device, Holmes promised, required only a few drops of blood to perform more than 1,000 medical tests, and it was small enough to fit on a desktop.
If that sounds too good to be true, it’s because it was too good to be true. The device could perform 12 tests, and some of those returned unreliable results. Still, Holmes managed to raise over $US945 ($1,312) million from people who should have known better before everything came crashing down and she ended up convicted on four charges of fraud. Her sentencing is scheduled for September. Her Hulu docu-drama series is scheduled for March 3, 2022.
Back in 2014, Kyle Sandler rolled into Opelika, Alabama like Lyle Langley rolled into Springfield on The Simpsons. But Sandler wasn’t hawking a crappy monorail; he was selling the digital future. Sandler told everyone in town that he was one of the original employees of Google (he wasn’t) and wanted to start a tech incubator in small-town Alabama.
Dazzled by this weirdly unslick dude, locals forked over more than 2 million bucks, and The Round House was born. Surprisingly, this venture did not prove profitable, and Sandler closed up shop and blew out of town for North Haverbrook in 2016. Authorities traced Sandler to Brazos County, Texas where he was arrested and sent back to Alabama to stand trial. He was sentenced to more than five years in prison and ordered to return $US1.9 ($3) million to the mostly just-plain folks he’d bilked. Check out the whole story on Generation Hustle.
Adam Neumann fooled a lot of people, but not in a criminal way. Neumann’s WeWork, founded in 2010, has a boring business model — it’s essentially a commercial real estate company that rents office space to other businesses — but Neumann’s flamboyant style and the cultural zeitgeist of 2010 America combined to make WeWork seem like a paradigm-shifting, tech-centered, disruptive, buzzword, buzzword, buzzword. Rich people lined up to invest, even after Neumann said WeWork aimed to “elevate the world’s consciousness” (through renting people cubicles, I guess.) Before the cracks appeared, WeWork was valued at $US47 ($65) billion.
Eventually, it all fell back to earth. Sources say WeWork’s board asked Neumann to step down as CEO because of his “drug use,” “eccentric behaviour” and his leadership, which led the company to burn through $US2 ($3) billion in 2018 alone. The company lowered its valuation to around $US10 ($14) billion, people were laid off, and WeWork was taken over by its largest investor, Softbank.
(The world’s consciousness was largely unaffected by any of this.)
No list of confidence men who maintained impressive false fronts would be complete without including criminal pioneer Charles Ponzi. Ponzi was a poster-child for the promise of America. A scrappy immigrant who entered the country with $2.50 in his pocket and a dream, Ponzi established his famous scheme in 1919. He started by trying to take advantage of a discrepancy in the price of postal reply coupons. While he may have believed his arbitrage would make money initially, he soon learned it would not. By then, Ponzi was in deep. He’d taken in a ton of money, much of it from fellow Italian immigrants in Boston, and purchased the expensive cars, houses, clothes, and accouterment you’d expect. The only way he could to deliver the returns he’d promised was to use new investor’s money to pay off the old ones, all while pontificating to a fawning press about the value of hard work and cleverness. You can probably guess how this story ends: In ignominy, poverty, and federal prison.
Retail chain RadioShack always seemed like a humble, rock-ribbed American company to me. For nearly 100 years, nerds could head there to pick up a random connector or vacuum tube, and check out some cool remote control toys. It’s fitting that RadioShack’s CEO scandal is humble too: Back in 2006, David J. Edmondson resigned as the CEO of the ‘Shack after it was revealed that he’d lied on his resumé. He said he had two degrees, but he actually had zero degrees. Even Edmondson’s payout was humble: He reportedly walked away with less than a million bucks. (Hopefully they threw in a few RC cars to ease the pain.)
Frank Abagnale was a master at appearing successful. He would would embody whatever profession people trusted in order to con money and respect out of marks.
Agagnale (who was played by Leonardo DiCaprio in Catch Me If You Can) says he started conning people at 17. Along the way he served as an assistant state’s attorney general in Louisiana, a hospital physician in Georgia, a professor in Utah, and a Pan Am Airways pilot. He supposedly did all this through forging a few documents and just, like, showing up.
In a final twist, though, it seems Abagnale fooled everyone. After he was released from prison on forgery charges, the “reformed” conman made his nut as a speaker and security consultant and seems to have claimed to be a more successful (and ethical) conman than he actually was. His most flamboyant exploits are pure fiction — he didn’t actually work for Louisiana’s attorney general, he didn’t escape from prison, or help the FBI, or work as a doctor or as a professor. Abangale seems to mostly have just told people he was a pilot and passed bad checks.
If what his critics say is true, Paolo Macchiarini is the most evil person on this list, but you couldn’t have known it 10 years ago. The dashing, arrogant Italian surgeon was fawned over on television news specials and in the New York Times.
A professor at Sweden’s prestigious Karolinska Institutet and a surgeon at its affiliated hospital, Macchiarini developed a cutting-edge procedure that used patients’ own stem cells to generate new tracheas, essentially regrowing an organ as opposed to transplanting it. The only problem was, it doesn’t seem to have worked.
After reportedly falsifying research, Macchiarini performed the surgery on eight patients, including a kid. Seven of them died. Macchiarini may have continued performing the surgery after he knew it showed little or no promise. Some of his patients, it is alleged, were given the highly experimental surgery even though they were relatively healthy. If you want to ruin your entire day, read this narrative of the six-year medical nightmare of Yesim Cetir.
Macchiarini also romanced a journalist even though he was married, falsified his CV, was arrested for extorting a patient in Italy, and supposedly did tons of other lowdown shit.
Adam Rogas is the king of ironic con-men. Before he was charged with defrauding investors out of millions of dollars, Rogas was CEO and CFO of NS8, a fraud prevention and detection platform. (I guess it didn’t work.) According to the FBI, Rogas raised $US123 ($171) million for the company by doctoring up financial statements, and took a $US17 ($24) million cut for himself. Rogas was arrested in 2020, and the company filed Chapter 11 last month. Facing up to 45 years in prison, he is reportedly considering a plea deal.
Joseph Henry Hunt
Joseph Hunt was an iconic 1980s-style red collar criminal, the kind of livin’ large figure admired by insecure young men to this day. The Los Angeles “entrepreneur” founded the Billionaire’s Boys Club investment group back in 1983 and put on the kind of lavish, conspicuous front typical of go-go ‘80s players from Beverly Hills. But dude was actually from Van Nuys. He wasn’t a good investor. He wasn’t even a good con man. The brash douche-bro managed to swindle cash from his rich friends, but when he met up with a real con artist, Ron Levin, he was taken hard.
Levin posed as an investor and reportedly cleaned out the Boy Club’s assets, and Hunt paid him back by murdering him (and maybe one of his friend’s fathers, for unrelated reasons). Hunt was caught, tried, and sentenced to life in prison, although some maintain that Levin faked his death to escape his own legal woes.