
Quintillion CEO’s Promise to Wire the Arctic Was $1B Scam - NN88
https://www.bloomberg.com/news/features/2019-10-08/quintillion-ceo-s-promise-to-wire-the-arctic-was-1-billion-scam
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the_watcher
> Much of Pierce’s behavior, though, wasn’t so different from that of other
> tech founders and CEOs promising financiers vast rewards right over the
> horizon.

It seems pretty clear that her behavior was very different than any tech
founder who declined to forge signatures on contracts.

~~~
dmix
I also don't see much of a connection between hyped up "unicorns" and overtly
defrauding multiple companies and investors through forged contracts.

That's far worse than even the few non-software tech companies (Uber, Airbnb,
maybe WeWork?) who skirted some grey areas disrupting entrenched markets. Even
in biotech with Theranos that's extremely rare.

Its just trendy to broadly attack SV these days.

~~~
the_watcher
Yea, it looks like this was an extremely clear, open-and-shut fraud case when
it came to trial, and it was discovered fairly easily once any pressure was
applied.

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skybrian
It sounds like a bunch of investors lost their money, but the undersea cable
was built and some parts of Alaska got better Internet. As frauds go, this
seems to have more to show for it than most?

~~~
the_watcher
Had the same reaction. Pierce was more outright in her fraud than other CEOs,
but the company was less fraudulent in terms of actually doing the thing they
claimed to be doing.

~~~
cortesoft
Because it is illegal to forge signatures but is not illegal to make
ludicrously optimistic promises about what you can accomplish.

~~~
the_watcher
Yes. That is correct. One is outright lying about facts critical to those
making decisions to invest. The other, even if ludicrously optimistic, is not
and relies on the listener to evaluate the facts backing said promises.

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Amygaz
Should I be amazed at the lack of due diligence from investing firms, not just
in this case, but generally? Or, maybe I shouldn’t be surprised, after all,
this isn’t their money. If it sounds good it probably is. They only need to be
right 10% of the time...

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KoftaBob
I'm becoming increasingly convinced that because of the "spray and pray"
approach of the VC model in which a small % of their investments make up the
bulk of their returns, the most successful VC firms are largely the ones with
the most money to spray, not due to some visionary abilities they have.

~~~
ASalazarMX
This would explain why they hunger for explosive growth, to make up for the
majority of their investments.

~~~
WalterSear
It's exactly where the hunger comes from.

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the_watcher
I assume there are legal implications here, but I'm surprised that Quintillion
hasn't tried to make the woman who "invested" $40,000 whole. $40K isn't a huge
sum to pay for the positive PR. If the issue is that returning that money
could set a precedent for other investors to try to pull their money out,
could they issue her $40K in shares? Even at the highest price she could have
been subject to, it would at least expose her to upside.

~~~
ralph84
Quintillion is owned by a NYC private equity firm. When has private equity
ever cared about PR?

But I'm surprised the woman hasn't sued Quintillion to get the equity. I don't
see how the company could argue the CEO wasn't acting on behalf of the company
when the CEO took the money and said it was for 225 shares. It's not like this
was some dodgy third party stock broker, it was the CEO.

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the_watcher
What's amazing is that this is both more obviously fraudulent behavior by the
CEO of a (seemingly) less fraudulent company than Theranos. While Quintillion
might not work, what they're doing is at least technically possible!

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jacknews
There seem to have been quite a few high-profile outright tech frauds the last
couple of years

Quintillion

Theranos

UBeam etc

~~~
WillPostForFood
This wasn't a tech fraud like Theranos or Ubeam though. Quintillion did build
a working fiber network. The CEO faked numbers to their investors, but they
had a real working product, and the company is still in business providing
internet access.

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0000011111
I spent a year teaching school in Kalaskage, AK. Our internet speed was that
of 1994. Supper slow maybe 1mbps up and down. Imagine that being your norm and
then going to fiber speed?

The completion of this project has undoubtedly made a positive impact on the
lives of the villagers in Barrow, AK.

~~~
NeedMoreTea
You have a very rosy view of 1994 internets. ;)

By 94 work _maybe_ had 128k, though I think it was still 64k.

In 1992, work was very, very proud of having one of very few permanent hooks
to the internet. 64k leased line that they paid around _£1,000 a month_ for. I
think that was on top of the Pipex peering connection. Can't remember how much
Pipex charged. I remember being shown the box and blinkenlights at interview,
which is why I remember early 90s internet speeds at all. They really were
proud of this. :)

At home I was probably on 9k6 or 14k4 dial up with £500 of US Robotics HST.
1994 was around the year, give or take, that 28k8 _finally_ arrived, after a
wait that had seemed like forever. Now you needed to shop for a new modem. :)

~~~
rasz
T1 cost ~$10K in 1995 in NYC (@cafe had one).

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neonate
[http://archive.is/CNKUY](http://archive.is/CNKUY)

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investinme
I propose a new law: any sufficiently outrageous scam is indistinguishable
from a unicorn

This, Theranos

~~~
Razengan
An account created just to post that comment? Do you mean for it to be called
the "Investinme" Law?

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rasz
No one told me "The Hummingbird Project" 2019 was a documentary.

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rdiddly
Nobody wants to drop me a breadcrumb like "also known as Barrow" or
"previously known as Barrow" up in here?

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golemotron
I've never heard of Quintillion but its name alone would make me suspicious.

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areoform
It is worrying that her actions might lead to blow back for female founders. A
lot of the unicorn scams that have been discovered since 2015 were headed by
women; Theranos, uBeam, and now Quintillion. WeWork is changing this, but
these examples are objectively talked about more in the general ecosystem than
all the other scams that have broken since 2015.

\- Hampton Creek was buying their merchandise to boost numbers and get better
shelf space in stores.

\- Mozido raised $314M and the founder was indicted for fraud.

\- Not a startup, but Mark Rothenberg spent his LPs money on parties and sex
instead of investments.

\- Bouxtie engaged in fraud to continue to get funding by fudging numbers.

\- Crescent Ridge Capital Partners was a ponzi scheme

\- WrkRiot forged wire transfers

This list is long and illustrious, and only to grow. But will people just
remember the few female founders who were scammers at the time? Will people
forget the dozens of counter-examples?

Even more importantly, what's going on in the minds of the traditional venture
capitalists? Venture capital is more herd-like than anyone wants to admit.
Will they remember these schemes and overfit their model? Will female founders
find it harder to get funding in the future?

\---

There are already a few heavily downvoted comments on this thread harping on
this "theme"
[https://news.ycombinator.com/item?id=21223462](https://news.ycombinator.com/item?id=21223462)

~~~
perl4ever
"but these examples are objectively talked about more in the general
ecosystem"

I don't think those three should be grouped together, as I heard a lot about
Theranos but nothing about the other two. And there's a reason other than
Elizabeth Holmes being a woman for Theranos to occupy a large space in
peoples' minds - their fraud involved the operational side of a medical
business, which is a violation of trust that anyone can relate to as a
consumer.

~~~
rasz
you never heard about uBeam scam? get a load of this:
[https://youtu.be/t1R9IQF0Y9s?t=28m5s](https://youtu.be/t1R9IQF0Y9s?t=28m5s)

