In Canada this is a huge scam. The government advertizes that it's funding incubators. Great, right?

The money doesn't go to the start ups - it all goes to large tech companies like IBM, etc, because, obviously, IBM knows about innovation.

The cover is that the government doesn't know tech so it will give money to trusted partners and they will choose who to give the money to because they've been doing such a great job innovating in Canada. Surprise: they gave the money to themselves!

You might have wondered why all these incubators in the crypto era were desperate to get you to go to their office. You might have also wondered: what fool is paying for this nice office in downtown Toronto where the prices are crazy-high? The taxpayer.

All of that money was completely wasted and worse, little of it went to actual start ups.

As a junior software engineer, I worked at a large UK bank.

Senior management routinely seem baffled that they could announce redundancies or hiring freezes, yet technology costs would continue to rise.

One pattern I saw repeatedly was a contractor being let go, only to return via a large outsourcing provider. The provider must have added a substantial markup despite supplying the same engineer back to the same team, without having incurred any procurement costs.

I once asked a more senior colleague how this made any sense. His answer stuck with me:

"You can’t stop people from doing their jobs. If someone thinks their job is to deliver X, they’ll find a way to deliver X. Sometimes that means working around processes and incentives in ways that look very strange from the outside."

I was on a government project where I found out I was being fraudulently billed on my hours. It was towards the end of the year and my manager was trying to use up the budget of the client. Although this is normal in the private sector I told him from the beginning that you can't do this on a government project.

The project was $1M+ which was enough for prison time. He had gone into our billing software and edited my entries - it wasn't as if he was submitting the fraudulent totals only - he was changing what I was entering.

I gathered as much documentation as I cloud and went to a law firm. They told me I had two options - report it to the Government Accounting Office or report it to the head of the project, an academic.

So I simultaneously resigned and reported it to the professor. I covered my butt. I'm pretty sure the professor hid the fraudulent billing but I didn't look into afterwards because basically that was what I was hoping he'd do so I wouldn't have to go to court and defend that my reported hours weren't really mine.

The full project was eventually awarded to another academic group.

I worked for Advanced Network and Services, which operated the NSFNET and was later acquired by America Online. Then one day the company was acquired by WorldCom. A few years later the CEO was sentenced to 25 years in prison for a ~$10 billion fraud. As a systems administrator I knew nothing about any of that, but I could tell that the new management included a lot of players and empire builders. That's the signal that told me to quit a few months after the acquisition. Employees were invited to invest their retirement savings in a mutual fund that contained only WorldCom stock. Many of them lost everything. Pay attention to those signals.

At least you didn't work for an online gambling company....or assist with manipulating the political views of billions of people to their detriment...or work on better ways of killing people...

Also, who hasn't worked at a company that produced a product and then abandoned it? I feel like that has happened often to me - many years of effort for nothing. It's not fraud exactly but it represents almost the same thing other than the intention.

Not commenting specifically on the companies and VC/PE firm discussed there, but this and the comments demonstrate just how many firms exist to do things other than make a profit. I think I understand why people with the big bucks can play these games and why it's tax-efficient for them.

I often reflect on how much I've grown personally in companies that are clearly not going anywhere. Trying to do more with less can lead to... interesting... technical solutions. And in every company I've worked in, I have at one time or another been on a "cloud costs reduction" squad, which normally shortly precedes my deciding to move on from said company.

I've also worked at the opposite end of this scale – companies with so much cash and no desire to turn a profit any time soon - and that's more problematic, as there's just no pressure to actually ship anything and every problem (and I mean _every_ problem) is solved with money or by hiring specialists.

There's sometimes a fine line between a legitimate business pursuing ambitious goals that are ultimately doomed to failure and one that exists to commit fraud. And it's often not possible for an employee (even a fairly high-ranking employee), who often has limited information, to determine which is which.

What's the old saying? "Behind every great fortune lies a great crime."

Most common people throughout history made their living working in the systems owned by aristocrats whose wealth was usually built on both corruption and theft. Guess that hasn't changed much.

I'm sorry, this sucks. It must be painful to know that you were used to defraud people, and that you worked for years on something which was never intended to be successful.

From my perspective, you're a victim of this fraud too. I think the pursuit of meaningful work is an important way many people find meaning in life, and it sucks that someone took advantage of you. From this piece, I get the impression that you would never have spent so much time and effort on this role if you had known it was just a way to scam investors.

So, don't be hard on yourself. It's normal to feel guilty, but if you didn't have a perspective on the entire company or knowledge of the fraud, I don't know what you could have done.

I have been in fairly senior roles at large corporates. The amount of money that is squandered without serious evaluation for something managers „want“ is mind boggling. I have often wondered whether corporate budgets are actually investor fraud in disguise.

Nearly two decades ago I worked briefly for a "startup" in the DC metro which (in retrospect, for me) existed only to show activity toward using an IP that was the subject of a lawsuit. The expected payout from the lawsuit would have rendered the cost of running the ~20 person startup meaningless, had they won. I suppose the lawsuit didn't go well, since the startup folded 4-6 months after I started, with paychecks being late, then stopping, and employees progressively not showing up. Fun times.

Fraud aside, I think a more common thought among developers is

> Did my old job only exist because the Product Owners didn't realize we didn't have product-market fit?

I was briefly employed by a robotics company in the US ... robotics is too nice: glorified if/then/else is better.

The owner was the son of an old school magnate out of PA.

Among other things his line has always stuck with me: "A whale that surfaces is soon harpooned."

The company never made money. I think the whole thing was run as a loss on purpose for tax purposes. I became tired of the head manager/engineer combo (big fish in this tiny, tiny world) and left.

Even they knew this company was never really trying to do anything serious. Strange indeed

Why does any of this actually matter? Why were you shaken?

You weren’t committing fraud. You did real work. Now you’re in the US with a family and a career.

Happy Father’s Day.

I have a serious question for everyone who reading through comments: If you get a great paying position in a business that is clearly managed by too ambitious people and will never succeed, given that you are legally not a part of the potential fraud ring that you can't prove, just an engineer closing issues and merging patches, would you reject it?

This is a fantastic outcome - lots of money and U.S citizenship! And your product didn't even hurt anyone unlike working for Meta, in fact no one even used it!

If we can see far, it is because we are standing on the shoulders of tyrants.

Wanna know what the guy is up to now?

Sure enough, he is a founder of an "AI That Knows Why" company.

I was worried that here in the US it's fraud all the way down, but just yesterday I met somebody who actually makes things, so I guess it's just fraud most of the way down.

As someone who 'grew up' my career in Silicon Valley my first exposure to this sort of shenanigans was during the dot com bubble, where general partners at newish VC firms were fleecing limited partners (GP's got a salary to 'manage' the fund, LP's were the source of money for the funds.) They would tell the LPs well only one in ten is a real banger, looks like the fund you invested in wasn't a winner.

It reminded me a lot of the Bill Cosby skit about the game Keno, he used an example of a Keno Card that had two numbers on it, you picked one and took it up to the cashier with your $1 bet, the cashier drew a number and said, "Sorry not your number, try again."

The sad truth was that a lot of people who had become wealthy because they happened to be working at a company that went public and had stock, were not particularly sophisticated when it came to the reality that even people "like you" were not your friends. I spent my Jr High/High School years in Las Vegas and got to see so many 'confidence men' fleece tourists with so many schemes. There is a great book called 'The Confidence Game' by Maria Konnikova. It is excellent and reading it you'll come to understand that not only is it possible for even 'smart' people to be taken, there are lots of people who work on being good at it.

But taking all of that into consideration, if you worked at a company, did your job to the best of your ability, and it turned out that it was a "fake" job because some third party was using it as part of a scam, you aren't part of the scam. Any more than happening to be in a bus when the driver whose been drinking kills a pedestrian. You aren't responsible for that pedestrians death and you're not being on the bus wouldn't have changed anything. So you can let that go.

See:

https://en.wikipedia.org/wiki/Bullshit_Jobs

I've come to realize this: we are all raising money more than we admit. Whether it's from venture capital or donations to fund non-profits, money is more political than I realized because it's all about the idea of value, which is subjectively determined by humans.

What's striking is how long it takes to notice. The incentives to keep believing the job is real — salary, identity, colleagues — are much stronger than the incentive to question the foundation. Sunk cost at the organizational level.

A lot (all?) VCs charge some form of fees (typically capped at 20% of the entire fund, split in various percentages through 4 years investing, 4 divesting period). These fees often are only paid out only based on the actively deployed capital, and are not the only incentive: the main incentive is shares in gains (carry).

The reason they're based on actively deployed capital isn't that the LPs (people who give VCs money to invest) want them to deploy the money in a stupid way, but they definitely don't want VCs to get the fees if the money wasn't invested. Therefore, VCs:

1. Want to raise as much money as possible 2. Want to deploy as much money as possible

Ideally, as quickly as possible.

There's nothing fraudulent about the idea of calculating VCs fees in various scenarios.

There's however the extremely dodgy part of the portfolio companies paying their investor (VC) fees for anything. This is an obvious conflict of interests, and should never happen, but I personally know of multiple VC funds here in Europe (will skip the names to not get sued, lol) who base their entire operational model on funding shitty companies that have 0 chance of success, charging them for the office space and often "shared services" they provide. Unsure if this is a regulatory overlooking, or something that's deliberately legal, but IMHO shouldn't be. Probably they talked their LPs into agreeing to this on paper.

I worked for a company that did opt-in spam email. Their main offices were in Silicon Valley, but they had a startup thing in LA that I worked at. Ostensibly we were building a self-service email campaign app to be bundled with Weblogic Commerce Server (which itself was basically DOA).

It became pretty obvious to me from the get-go that nothing was being built, and the startup was just siphoning money off the parent company. I'm not sure if there was any fraud going on beyond a bunch of people collecting a paycheck.

I think the boss was skimming off of the captive H1Bs, and there was a guy in NYC who never did anything as far as I could tell. I wouldn't be surprised if there was some kind of kickback going on there.

My first day, I went out for sushi with the top devs, who proceeded to tell one horror story after another about the boss. Awesome way to start a job. I lasted 3 months.

I vaguely recall a story about an employee who discovered that their company's sales department was acquiring a lot of new customers to hit some metrics, but rarely actually closing the deal. The employee spent months chasing up incomplete sales orders, and discovered that the sales department's apparent success was illusory.

At the end of the day he wrote some software which sounds legitimate and useful. What management did without his knowledge isn't really his problem.

At the other end of this extreme is if you have a good job in a bad industry, like gambling or boiler room frauds. You should feel responsible even if your job is just maintaining the servers.

Well, you did good and got paid. It all sounds very serendipitous. Isn’t like 99% of all tech fraud?

I look at everything now as a journey not a destination. When connecting one's work carrier with a bank, one must keep in mind that some other people might have joined the organisation because of quite distinct reasons than we did. So yes there might be a fraud ongoing in our company, but it's not our fault

This arrangement is bizarre.

The VC business model is predicated on extreme growth. The last thing you would want to do is siphon dividends out vs reinvesting into growth.

They must have preyed on newbie founders, dangling large valuations. Oh the fees? Well you will make it big and it will be a drop in the bucket!

I think it doesn't really matter if the fund manager was committing a fraud. The author had fun, met their spouse and just enjoyed life with the information they had at that point.

Sounds straight out of The Producers.

Well that's a blast from the past. When I lived in London I hung out with some of the geniedb team (hey Alaric).

Love that second footnote.

Yes it did, but you are not your job. Your current state may be based on a fraud, but the fraud is not you.

I lived in Silicon Valley for almost a decade, and stuck my fingers in the startup scene for awhile.

One thing I learned is that a some people running startups are "poker players." They run the company to keep up appearances: Their goal is to get more investment and eventually sell the business at a profit. (And then what the purchaser does is their business.)

There's nothing wrong with working for companies like this! You might not realize it going in; or the investors might see through the bluff and replace the leadership, creating a great job for you.

In contrast, you could join a business run by honest people, and they could sell out to a poker player who then ruins it. Or, more typically, the honest people turn out to be so-so business people and the business fails. (This is what happened when I tried to run a startup.)

At the end of the day, working for a startup always involves risk and the leadership structure will always change as the company grows, pivots, or fails.

First, you'll probably never know and this is one of those ouroboros questions that can drive you a little crazy if you let it. I urge you to not let it, because the only actual answer is that if you did work you were proud of and met the mother of your children, it quite literally doesn't matter. We should all be so lucky!

Second, very few things in life are so cut and dry. Legal cases are by nature simplified abstractions that attempt to render a three dimensional situation that unfolded over a long time in a few pages of a graphic novel.

Third, this sort of thing is so incredibly common. Often the only difference between fraud and IPO is whether it worked or not. That's not cynicism, just pragmatism.

If you ever read David Graeber's Bullshit Jobs - and you should - you'll quickly decide that the real fraud is late capitalism writ large.

In these cases I'm always curious who the investors were. I have the bad feeling it was you and me via our 401ks somehow.

One of the many reasons to never actually care about the work you are doing if it is a for-profit endeavor, and you are not the owner. You are there to collect a paycheck so you can survive. If you want a job that you should care about then work in public service, at a non-profit, or for yourself.

Why don't you ask Twitter, Tesla, or SpaceX employees how they feel about the situation.

I mean, there are far more nefarious things happening in big tech, so if the author feels they were somehow being "used" in an immoral sense, I think they should feel ok about themselves based on the types of knowingly wrong but technically legal things happening in large companies.

I bet those henchmen in Bond movies thought that the volcano base was merely a government-funded secret research facility.

sometimes fraud leads to positive outcomes.

imagine a world where SBF didn’t defraud the crypto world.

in that world anthropic may have not existed.

YES

No Genie finally out of the bottle joke?

Big tech companies are a scam in themselves. Doing something useful (that would pay itself by definition) while the main revenue is advertising? really?

I wonder what's even wrong about it. This is how funds normally operate: motivation for investors is upside, motivation for coders is to be able to code and get paid for it, motivation for people who run this circus, is fees.

And yes i can relate to that. In 26 years of career, about half of the money i made and all of the money i saved, came from 3 clients (over the course of less than 5 years), all 3 of them being scams - one swindled investors for a thing he knew can't work, another one did a legit thing but when he realised it failed, exited to a dumb megacorp and ran away (literally vanished) when they started to realise they've been duped, and one more was in crypto field and whole project - which to me, all the way until past release, looked like a legit porn site - had a goal of imitating activity/interest to boost value of a crypto token.

Even before i picked up coding - and i did it when i was in early teens around the fall of Communism - i knew coding as a separate field and a business was invented exactly for that purpose: it's a lot easier to steal money that way because it's a lot easier to inflate costs vs buying physical products.

No surprise the party is over. People can't be duped for too long.

honestly, what's the difference?

if you don't own the capital and have full autonomy, what's the difference on fraud (that you know nothing about), some imoral thing like flock/advertising/surveillance, or some inane thing like animating characters for ads, or mailing spam letters for a small business, etc, etc, etc?

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