By Anji Reddy
There are many people who make innovative advancements in our world today. Like this college dropout who had an idea that would change the way technology would work forever and was known for black turtlenecks and jeans. Up until now, this description fits Steve Jobs. However, this person is Elizabeth Holmes, the founder of a billion dollar startup company called Theranos. There’s just one problem. Her idea never materialized.
Elizabeth Holmes, before she set foot her in Stanford, had an idea. She wanted to make a machine which took only a drop of blood and could run hundreds of tests. It had never been done before, and everyone said it was impossible. Holmes wanted to make it happen, so she dropped out of Stanford to pursue her dream. When Elizabeth was unable to make the machine work, she faked it.
Bernie Madoff, a financier, set up the biggest Ponzi scheme in history. A Ponzi scheme is when instead of investing the money you are given, you keep the money and rely on people to keep investing to give the money back. He also faked it.
Even though many people make innovative advancements, just as many people are willing to commit fraud. Fraud happens when greed or fear of failure gets the best of someone. Take Elizabeth Holmes; while she had the right intention, she chose the wrong path. Bernie Madoff intended on making money, but ended up making the largest Ponzi scheme in history. But how do people catch fraud like this? The first thing to look out for is a sign.
Elizabeth Holmes, when asked how her machine worked, told investors that they were trade secrets even though she didn’t have a product to begin with. Elizabeth Holmes and her board members had no experience with the field. Additionally, Theranos’ machines didn’t have FDA approval for their entire machine and managed to get around the rules.
Bernie Madoff was caught when things started to break down. Since a Ponzi scheme relies on more people investing money, when people stop investing, there is no money to give back. During the recession, people stopped investing, and that is when Bernie Madoff’s Ponzi scheme took a turn south.
We are all innovators, but sometimes our greed and fear gets the best of us. In the time we are in right now, advancements are made all the time. But sometimes we have to be careful because it can be hard to tell whether they are fraudulent or not.