Aug 19, 2022 • 4M

Chapter 6, Part 4: What’s in a scam?

This is Chapter 6, Part 4 of SMIRK, a serialized memoir of my relationship with “Pharma Bro” Martin Shkreli.


Appears in this episode

Christie Smythe
My experiences uncovering the story of, and falling in love with, Martin Shkreli.
Episode details
Illustration of a hoodie, one of Martin Shkreli’s preferred articles of clothing (by Shannon Loys).
Illustration of a hoodie, one of Martin Shkreli’s preferred articles of clothing (by Shannon Loys).

If prostitution is the world’s oldest profession, being a con artist is probably the second oldest. Plenty of creatures in the animal kingdom have figured out how to survive by stealing, cheating and sometimes even misrepresenting themselves. With our imaginative minds and gift of language, we humans have always relied to some extent on lying to each other to get ahead.

But when does lying become a full-blown con? No one would consider misleading players at a poker table about the strength of your hand a “con.” That’s just how you play the game. A “con” or a “scam” in the more commonly understood sense is a much bigger lie: The perpetrator is playing a game that you, as the victim, don’t understand is happening. They win easy money, and you get “played.”

Throughout the ages there have been lots of versions of this type of fraud: the elaborate scams illustrated in David W. Maurer’s 1940 book “The Big Con;” the “Nigerian prince” email scam; the fake “investment” business where new investors are used to pay off older ones (made famous by Charles Ponzi and Bernie Madoff); and of course, the more modern iteration, the crypto “rug pull.” 

Common themes are that the perpetrator intends to deceive the “mark,” and doesn’t honor their promises, and the victim is left holding the bag. But what if the situation is a bit more complicated, and the perpetrator does lie, but ends up making good on their word (in a convoluted way), and the “victim” ends up wealthier?

That, too, under our legal system is fraud — and it is the kind Martin Shkreli was convicted of doing. 

There is a particular twist on fraud that has come into the zeitgeist as of late: the “fake it ‘till you make it” fraud. Along with treating dogs and cats like human children, this form of deception seems to be especially popular with millennials. You know the leading examples: Elizabeth Holmes, of Theranos; fake heiress Anna Delvey; and Billy McFarland and his disastrous Fyre Festival. 

From left to right: Elizabeth Holmes, Billy McFarland and Anna Delvey. (Getty Images.)
From left to right: Elizabeth Holmes, Billy McFarland and Anna Delvey. (Getty Images.)

Blame it on the ease of self-promotion on social media, or maybe all of us millennials getting participation trophies as kids. Whatever the cause, we sometimes delude ourselves into thinking we can turn our fantasies into reality by just getting enough supporters on board. And sometimes it works. (How else can you explain Adam Neumann “failing up” after his WeWork debacle?)

Recall the European folktale about the stone soup. (If you are a millennial, you might have had a book that included this story on a shelf in your childhood bedroom, next to all of your participation trophies.) A visitor to a village tells the locals he can make soup using just a stone. Incredulous, they are still curious to watch him try. He persuades each of them to provide one additional ingredient — some carrots, peas, onions, etc. — just to add “extra flavor.”

In the end, the visitor ends up feeding the village with the soup made of all of their contributions. He “faked it until he made it.” Nonetheless, in the American justice system, he would be guilty of fraud.

As a working-class hustler trying to make it in the hedge fund world, Martin Shkreli did a lot of “faking it.” He persuaded wealthy people to invest with him by telling…

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