Oops!…I Did It Again

The founder of the company where I used to work, Kalder, pleaded guilty to securities fraud back in May. No one who worked there would have been surprised, least of all me. She used to play this game — “two truths and a lie” — with newcomers. You say three things — two true, one false — and people tried to guess which one is a lie. She was obsessed with it. I stumped them all by saying two wildly unlikely things that really happened. With me, the more outlandish the story, the more likely it is to be true. With her, the betting odds were, nothing she ever said is true. I mean, just stone cold playing the numbers, all three would be false.

She came from Turkey to attend UC Berkeley. Sometime after is when all the transgression started, at least from the perspective of the law. By the time I joined Kalder, she was aged 25, had raised more than $10 million from investors, and she was spinning yarns endlessly to anybody who would listen. Everything about her career had been stretched well past the point of embellishment; really everything in her life too. To listen to her talk for 10 minutes, one would hear 20 whoppers. And, to look at her career trajectory, one might think she had done all sorts of revolutionary things before ever graduating college. But, one should have also asked, did an intern really build a whole product line at a major digital bank while still in college?

Only God and the FBI can know all the seeds she sowed in the soil, but investors were fed enough falsified information to anchor a bevy of federal criminal charges. Again, I was not shocked by any of that. Although she copped a plea to a single felony count of securities fraud, she was initially indicted with that plus wire fraud, visa fraud and two counts of aggravated identity theft. The word “false” appears 13 times in her criminal indictment. She will likely spin it as: “Hey look, they dropped everything but one count.” The government would probably spin it as: “You signed a guilty plea to felony fraud which calls for a 3-4 year sentence.” Her plea agreement contains a 36-48 month prison recommendation and stipulates she may not return to the US until 20 years after time served.

The fantasies flowed on the pages of Forbes too, of course, where she was named among their 30 Under 30 list. A remarkable number of honorees — Sam Bankman-Fried, Charlie Javice, Martin Shkreli, Elizabeth Holmes, Caroline Ellison, Trevor Milton and Gokce Guven — have run afoul of the law, and all for the same thing: faking everything. Gokce told Forbes that Kalder worked with numerous clients with whom we did not do any business. A single phone call could have engineered that one. We didn’t have “25,000 partnering merchants” because we didn’t even have a functioning product. A simple request for a demo could have revealed that. For a time I was amazed that so many people failed to see the obvious. If someone says to me a lot of stuff that doesn’t add up, I might start to have doubts. If someone makes a lot of grand claims, I might kick some tires before I gave them an award for that. But, in her case, everyone looked through it all. Or, what’s not hard to believe is that she said all these things. But, what is hard to believe is that anyone believed it. Or, maybe they didn’t, and, maybe that’s because they didn’t have to. This week something dropped that helped me understand, potentially, how so many red flags got overlooked.

My favorite comment after Gokce was indicted was: They should make a Forbes list for people who do legal stuff. My favorite comment when the Forbes editor who came up with 30 Under 30 got sacked for taking secret kickbacks: Sooo on brand. So, maybe it’s not a coincidence that so many people who’ve made the list turned out to be corrupt. “Birds of a feather," as my grandma used to say. It’s not hard to imagine that wealth management businesses would pay for a ranking in Forbes. It’s also easier for me to believe that Shook Research, which was working with Forbes to compile such rankings, paid the editor $6 million to influence his rankings than it is to believe that this was just a generous gift, which is the narrative. So, now, if one ranking was for sale, then why not all of them? Certainly would explain how so many winners of 30 Under 30 ended up in jail.

For the record, as of now, I have worked at Goldman Sachs for 15 years, lived in Hong Kong, Tokyo and London, gotten addicted to cocaine, crystal methamphetamine, and alcohol, gone from rich to broke (twice), been jailed more than a couple times, lived 2 years sober in a van with a pitbull, driven 55,000 miles around America, and worked for a convicted Forbes fraudster. Enough’s enough. I’m writing a fucking book. But, the unique feature of all the stuff I’m saying: all the whoppers are true.