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Silicon Valley can be a property of great power and riches , but the small affair can bring it crash down . From deepfaked phone birdsong with bankers on the descent to mountains of Lie that acquire out of control , these once - darlings of Silicon Valley were no match for the law .
Here ’s a flavour back at the technical school executives who were convict this year .
Nikola founder Trevor Milton sentenced to four years for securities fraud
Trevor Milton used his outsized personality to market an challenging idea : disrupting loading with fleets of hydrogen electric semi trucks via his party , Nikola . His lordliness draw in better half and investor , including automaker GM . But it was when Nikola go public via a merger with a extra design acquisition company that Milton ’s superstar ( and the company ’s fund ) rocket into the stratosphere .
It would be short - lived . Within calendar month of riding the high of meme stock status , Milton was criminate of fake and federal investigations were launched . He would soon resign as beginner and CEO , and his troubles did n’t fade with his departure . Instead , Milton was charged , try out and ground shamefaced of defrauding investor . This calendar month , Milton was doom to four class in prison , although it ’s doubtful his saga will finish here . Milton is anticipate to appeal . — Kirsten Korosec .
Theranos founder Elizabeth Holmes reports to jail
Almost 10 age after her startup Theranos promised to upend the healthcare industriousness and achieved a rating of some $ 10 billion , more than five years after the company was dissolved follow Apocalypse that it was all smoke and mirrors , and one year after a barbarous four - calendar month trial , Elizabeth Holmes is at last , actually in prison .
It seemed like at one point everyone in the globe was rooting for Holmes . She was on the book binding of every magazine and verbalise on every stage — include ours , let ’s be honest . But once the prevarication caught up with her , the scale of measurement of her pretender overcame even her staunchest backers . It seems improbable any of her “ Holmies ” will remain when she finishes her 11 - twelvemonth prison term . — Devin Coldewey .
How a phone call with bankers led to startup Ozy Media’s downfall
Itstarted with a phone callthat prick the ear of banker in the most strange way . On a call with Goldman Sachs investors who were prime to close on a $ 40 million deal to fund the media startup Ozy Media , one of its executive made a catastrophic error that month subsequently would ravel out the party . A strange voice on the league call purported to be a YouTube administrator who showered Ozy with kudos . But the investor develop funny and connect with the executive directly , who told them that the person on the call must have been an impersonator as the executive had never before verbalise with the Goldman Sachs investors . Ozy ’s CEO Carlos Watson apologize to the bankers , and blame the incident on an Ozy executive director ’s alleged genial health crisis , but the damage was already done .
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Samir Rao , who prosecutors criminate of misrepresent the YouTube executive director ’s articulation on the now - ill-famed Goldman Sachs call , alongside Ozy ’s former headman of faculty Suzee Han , plead guilty to their roles in the scheme to rook investor , harmonise to the Justice Department . prosecutor indict Watson with conspiracy fraud charge a month afterward , to which Watson plead not shamed . — Zack Whittaker .
Binance CEO pleads guilty to federal charges
Binance is the humankind ’s big crypto exchange and has carry that title since 180 daylight after it launched in June 2017 . But behind that prestigiousness was a lot of deception as the company and its founding father , Changpeng Zhao , also known as “ CZ , ” plead shamed to a turn of violationsbrought by the Department of Justice and other U.S. agency .
But that all came to a oral sex in late November as both Binance and CZ both put their hands up . And their supplication are costing a sinewy dollar sign amount . The crypto central plans to give about $ 4.3 billion to answer the DOJ ’s investigating and has reach agreements with other bureau , too . CZ has to pay a $ 150 million fine to the Commodity Futures Trading Commission and agreed not to make statement “ contradict his espousal of responsibility . ”
After all this unraveled , CZ now stay on in the U.S. and ca n’t leave due to his “ enormous wealthiness ” and lack of tie to the states , ajudge ruled earlier this month . CZ ’s fate will be decided in late February at his sentencing in a Seattle Union court where he could face up to 18 months in prison house . — Jacquelyn Melinek .
Allergy test startup CEO Mark Schena convicted of defrauding the government
Fool us once , dishonour on you . Fool us double , and … straight to prison house . That ’s the short story of Mark Schena , a former executive at California - ground Arrayit Corporation , who lied to investors about the company ’s allergic reaction and COVID-19 testing ability and is paying the price . In October , Schena wassentenced to eight years in prisonand ordered to bear $ 24 million in restitution to victim . Schena ’s sentencing came just months after the dishonor Theranos laminitis Elizabeth Holmes was say to prison for a similar deception , and prosecuting officer were not taking a 2d health - bear on fraud lightly .
Much like the Theranos pillow slip , Schena made sheer claim about his caller ’s testing ability , but proceed further by hornswoggle the federal government after bill Medicare $ 77 million for fallacious COVID-19 and allergy tests , per the Associated Press . The lies did n’t cease there . Schena lied about being on a short list for the Nobel Prize and claimed Arrayit was worth more than $ 4 billion when it was n’t . Prosecutors accuse Schena of putting “ profit over public safety ” by using the COVID-19 pandemic to “ fire a kickback scheme and a monolithic fraud upon investors and people search for better wellness charge during a prison term of great dubiousness . ” — Zack Whittaker .
FTX’s SBF convicted of massive crypto fraud
Once upon a meter , Sam Bankman - Fried was seen as the savior of the crypto populace , the one who could bring constancy and reputability to web3 . His cryptocurrency exchange FTX was founded in 2019 as a complement to his trading firm Alameda Research , and soon he had billion in capital and had “ achieved the status of fable , ” harmonize to a now ill-famed hassock piece by investor Sequoia .
regrettably , SBF was n’t the cure to web3 shenanigans — he was one of its braggart perpetrators . A account in recent 2022 revealed its balance sheet to beovervalued and faulty ; the whole mathematical operation collapsed and SBF himself was extradited and arrested a month afterward . He soon would be defy unwashed sense by loquaciously address his ostensibly naïve but apparently fallacious fiscal practice , and evidence emerge of shocking abuse of funds . Other FTX leaders pled guilty;SBF tried and fail to forefend sentence .
He has yet to be sentence , but faces a uttermost of 115 year in prison . — Devin Coldewey .
Mike Rothenberg, once a Silicon Valley darling, now convicted fraudster
Mike Rothenberg explode onto the scene in Silicon Valley some a decade ago as something of a rebel . A self - key former mathematics Olympian who wait on Stanford before getting an MBA from Harvard Business School , Rothenberg was set up for a traditional calling in finance or speculation Washington . or else , he chance upon out on his own , setting up a small speculation fund with big ambitions .
But Rothenberg was too raring . Instead of develop the firm steadily , he embraced a splashier approach , organizing expensive effect for founding father for the deal flowing and marketing benefits , from parties to box seat seats at Golden State Warriors games . A price - intensive “ annual ” event held two years in a row at the ballpark where the San Francisco Giants make for even inspired an episode of the HBO show “ Silicon Valley . ”
Alas , it all came crash down presently after , and following more than five years drop combat back both the SEC and the DOJ , which came after him for overcharging investors for personal projects , Rothenberg was last calendar month convicted on 21 counts , including bank fraud , off-key statements , four enumeration of money laundering and 15 counts of conducting wire fraud .
While Rothenberg wo n’t be condemn until March 1 , he could be facing a mountain of sentence in prison house in addition to millions of dollars in fines . Meanwhile , one of the most tragic angles on this story is that Rothenberg ’s stake were passably good . Among his early investments was Robinhood , the stock brokerage firm company that went on to become a highly successful investment for its other venture investors . — Connie Loizos .
Ex-Uber chief security officer Joe Sullivan convicted after data breach cover-up
Former Union prosecutor turn Uber chief security military officer Joe Sullivan became the first corporate cybersecurity lead to be convict for criminal offence committed on the business . In March , a Union judge sentenced Sullivan to three years probation after previouslyfinding the former Uber executive guiltyon charge of occlude an prescribed proceeding and misprision of a felony , efficaciously a failure - to - story - error offensive activity .
Sullivan spoke with TechCrunch months later about his court caseand why he had to “ get over ” the jounce of his unexpected conviction and the bitterness he felt . Sullivan , who now direct a non-profit-making helping to get technical school and human-centered aid to Ukraine , said security executives “ should go towards ” the problem , not away from it . — Zack Whittaker .
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