ELLE (Australia) - - Contents -

Un­rav­el­ling the web of fe­male con artists.


Even be­fore it all came tum­bling down, El­iz­a­beth Holmes was riv­et­ing. Her bari­tone voice. Those black turtle­necks. The seem­ingly end­less plau­dits she re­ceived from the tech world. That well-crafted nar­ra­tive about how her fear of nee­dles and de­sire to change the world led her to found a com­pany, Theranos, that she said could per­form com­pli­cated med­i­cal tests with only a fin­ger-prick of blood. She ex­hib­ited all the qual­i­ties that women are typ­i­cally dis­cred­ited for — fash­ion quirks, out­ra­geous ambition, un­usual vo­cal tics, fail­ure to pro­vide hard ev­i­dence — and soaked up rounds of fund­ing any­way.

Theranos’s board was stacked with the kind of old white guys whose ap­proval has long been syn­ony­mous with power. Holmes per­formed a sleight of hand not of­ten achieved by women in pub­lic life. She didn’t have to prove her ideas to be hand­somely re­warded for them. She was a kind of anti-hil­lary: un­der­pre­pared, un­der­qual­ifed and beloved by men.

Now that the US Se­cu­ri­ties and Ex­change Com­mis­sion has charged her with “mas­sive fraud” for “de­ceiv­ing in­vestors by mak­ing it ap­pear as if Theranos had suc­cess­fully de­vel­oped a com­mer­cially-ready portable blood anal­yser”, she’s no longer the world’s youngest self-made fe­male bil­lion­aire. She’s still fas­ci­nat­ing, but for an en­tirely dif­fer­ent rea­son. In March, Holmes set­tled with the SEC, which also al­leged that she “claimed... that the com­pany would gen­er­ate more than $135 mil­lion in rev­enue in 2014. In truth, Theranos... gen­er­ated a lit­tle more than $135,000 in rev­enue from op­er­a­tions in 2014.” Holmes agreed to pay a $678,000 fine and cede vot­ing con­trol of the com­pany she cre­ated. As part of the set­tle­ment, she “nei­ther ad­mit­ted nor de­nied” any wrong­do­ing.

Is Holmes’ story a cau­tion­ary tale of what hap­pens when you get swept up in pos­si­bil­i­ties and fake it till you make it? Or a de­lib­er­ate con? The dis­tinc­tion might not mat­ter. Women are con­stantly sec­ond-guessed; we strug­gle to be taken se­ri­ously when it comes to our ex­pe­ri­ences with ha­rass­ment, or our at­tempts to get credit we de­serve at work. So while part of me ad­mires Holmes’ au­dac­ity, mostly I’m an­gry with her for set­ting women back, and re­in­forc­ing the idea that we’re not to be be­lieved.

There is a “gen­der gap in ethics”, ac­cord­ing to Laura Kray, pro­fes­sor of lead­er­ship at the Uni­ver­sity of Cal­i­for­nia, Berke­ley’s Haas School of Busi­ness. Her re­search shows that men are quicker than women to lie for their own per­sonal ben­e­fit. This is partly be­cause women are more prone to “the moral emo­tions of guilt and shame”, ac­cord­ing to 2013 re­search by Kray and Jessica Kennedy, now an as­sis­tant pro­fes­sor at Van­der­bilt Uni­ver­sity.

But there are more fe­male fraud­sters out there than one might think. “Fe­male con artists are in­cred­i­bly un­der­re­ported,” says Maria Kon­nikova, au­thor of The Con­fi­dence Game: Why We Fall for It… Ev­ery Time. “Peo­ple don’t want to ad­mit they’ve been taken ad­van­tage of, they never want to ad­mit to hav­ing fallen for a fe­male con artist.” She ob­serves that all suc­cess­ful swindlers ex­hibit a knack for con­vinc­ing peo­ple to do what you want while mak­ing them be­lieve it was their own idea. “Women are very good at it,” says Kon­nikova. “Of­ten they don’t have real au­thor­ity, so they cre­ate their au­thor­ity in other ways.” Pic­ture a fe­male tech CEO stack­ing her board with for­mer sec­re­taries of state and sig­nalling her world-changer sta­tus with those black Steve Jobs turtle­necks.

And un­sur­pris­ingly, when pro­fes­sional women are caught in a lie, Kray says, they face harsher con­se­quences than men who com­mit sim­i­lar of­fences. “Peo­ple ex­pect it from men,” she says. “To be a woman is to be car­ing and self­less. So if you’re be­hav­ing un­eth­i­cally, then not only are you sur­pris­ing us, you’re vi­o­lat­ing these cul­tural codes.” Take Martha Ste­wart, who built her ca­reer in the fem­i­nised world of canapés and wreaths, then be­came the poster girl for fi­nance fraud when she was sen­tenced to five months in prison in 2004. Ste­wart was con­victed of ly­ing to gov­ern­ment of­fi­cials about the rea­son she sold her shares in a com­pany called Im­clone to avoid a loss of around $60,000. Yet her name comes up along­side En­ron’s Jeff Skilling, who sold more than $81 mil­lion in shares, and banker Den­nis Levine, who net­ted $17 mil­lion, on lists of in­fa­mous in­sider trad­ing in­ci­dents. “The same traits in women

are perceived very dif­fer­ently,” Kon­nikova says. “No-one’s go­ing to say a man is a blight on so­ci­ety. It’s like, ‘He’s kind of bril­liant.’ For women, it’s the op­po­site: ‘We al­ways told you women were de­ceit­ful.’ The sto­ries are cast in a very dif­fer­ent light.”

Vir­tu­ally ev­ery­one en­gages in some low-level dis­hon­esty, but you rarely hear men’s trans­gres­sions used as ar­gu­mentend­ing con­fir­ma­tion of neg­a­tive stereo­types. Take Jackie, the woman whose graphic story of a frat-house gang rape at the Uni­ver­sity of Vir­ginia was pub­lished by Rolling Stone in 2014 and later com­pletely dis­cred­ited. Re­porter Sab­rina Ru­bin Erdely ex­plained that, de­spite in­con­sis­ten­cies in her story, she found Jackie “very cred­i­ble”. In­deed, so­cial sci­en­tists analysing crime records report that the rate of rape al­le­ga­tions that can be proven to be false is only two to six per cent. But that doesn’t stop peo­ple from us­ing the Rolling Stone de­ba­cle to dis­miss women who come for­ward about an as­sault. Jackie’s story ul­ti­mately had con­se­quences for all women in sim­i­lar — truth­ful — sit­u­a­tions.

Which brings us back to Holmes. In Sil­i­con Val­ley, women strug­gle to get a frac­tion of the fund­ing she was able to se­cure for Theranos. Just two per cent of ven­ture cap­i­tal dol­lars goes to all-fe­male­founded start-ups. That’s partly be­cause fun­ders don’t be­lieve women’s com­pa­nies have the same po­ten­tial. Ven­ture cap­i­tal­ists, ac­cord­ing to a study by the Har­vard Busi­ness Re­view, “tended to ask men ques­tions about the po­ten­tial for gains and women about the po­ten­tial for losses”. Male founders are asked about their high­est ambitions for the com­pany; women are asked how they’re pre­vent­ing fail­ure sce­nar­ios. Holmes, it seems, en­joyed the ben­e­fits of a line of ques­tion­ing typ­i­cally af­forded to men. Which is why her fraud charges are so dev­as­tat­ing. At high-pro­file con­fer­ences and in dozens of glow­ing write-ups, Holmes was held up as a model of what hap­pens when am­bi­tious busi­ness­women gain an un­prece­dented level of in­vest­ment and trust. To our great detri­ment, be­cause of the charges against her, the world may have an an­swer: they fake it. And now it’ll be that much harder for the rest of us to make it. E

A seem­ingly le­git 25-year-old “Ger­man” heiress, Anna Delvey, man­aged to con­vince ev­ery­one she met that she was about to in­herit $14 mil­lion… and racked up thou­sands in un­paid bills be­fore go­ing to jail.

Then there’s Yvonne Ban­ni­gan, a for­mer as­sis­tant to US Vogue’s Grace Cod­ding­ton, who was ar­rested for charg­ing $68,000 of her own things to her boss’s credit card.

Here in Aus­tralia, who can for­get Belle Gibson, who lied about heal­ing her own can­cer with a whole­foods diet? She’s been in the news again re­cently for fail­ing to pay the $410,000 fine.

So yeah, as Jia To­lentino for The New Yorker writes, it’s “grifter sea­son”. But what com­pels some­one to lie to such an ex­tent that it be­comes a crime?

The truth is, we all have the ten­dency to lie, even just a lit­tle, from telling our­selves we won’t hit the snooze but­ton to bail­ing on din­ner plans due to “sick­ness”. The con artist is sim­ply at the other end of the spec­trum of un­truths, says foren­sic psy­chol­o­gist Misia Tem­ler. “We all lie, but it’s mostly not harm­ful.” It might even be nec­es­sary for our sur­vival. “We don’t have the phys­i­cal power and speed of other an­i­mals, but we can make things up and hope they be­come true,” says Ian Les­lie, au­thor of Born Liars.

Ly­ing for gain is some­thing we prob­a­bly all do, but con artists take it to the next level. Dan Ariely, au­thor of The Hon­est Truth About Dis­hon­esty, talks of a mu­seum gift shop where money fre­quently went miss­ing. When the mu­seum fi­nally set up reg­is­ters to mon­i­tor the flow of money, the losses stopped – it turned out al­most all staff were steal­ing small amounts of money ev­ery now and then. The les­son? “Only a tiny minority feel com­fort­able steal­ing a huge amount, but given the chance, nearly ev­ery­one steals or cheats a lit­tle,” says Ariely.

But what truly sep­a­rates scam­mers from your ev­ery­day, run-of-the-mill liar is usu­ally a dis­re­gard for the moral code. “Liars like these tend to have anti-so­cial per­son­al­ity dis­or­der,” says Tem­ler. “They have their own ‘rules’ and moral code they live by,

and they ig­nore the so­cial con­tract.” There’s an el­e­ment of nar­cis­sism there, too, says Tem­ler, in that those who lie in such ways tend to blame oth­ers for their prob­lems (Holmes fired peo­ple who dared ques­tion Theranos’s non-ex­is­tent tech­nol­ogy).

Scams thrive in times of change, says Kon­nikova, as it breeds un­cer­tainty – the con artist’s great­est ally. And what time could be more un­cer­tain than this one?

Tom Gara, a Buz­zfeed writer, sug­gests that 2018 is to scam­mers what 16th-cen­tury Florence was to sculptors: so ripe for suc­cess it’s al­most rot­ten. Cli­mate change, fake news, Trump, Brexit, the very real pos­si­bil­ity of fall­ing in love with the Honey Badger: it’s all kind of bonkers. No won­der we’re so quick to be­lieve peo­ple who seem un­usu­ally con­fi­dent (which, in­ci­den­tally, is where the “con” in con artist comes from).

“There’s more of a cul­tural ac­cep­tance of ly­ing these days,” says Tem­ler. “To some de­gree, we all know that so­cial me­dia is a lie, or at least al­lows us to stretch the truth or omit things we don’t like.” Who among us hasn’t posted a pic of our “amaz­ing week­end”, leav­ing out the bit about the hang­over and the Uber-ed hash browns?

On­line com­mu­ni­ca­tion it­self, with its dis­tant na­ture and sense of anonymity, is fu­elling our dis­hon­esty, too, says Ariely. “The more com­mu­ni­cat­ing we do on­line, the more our crimes are seen as vic­tim­less. All our re­search shows these are the crimes we’re hap­pi­est to com­mit, be­cause we have no sense of hurt­ing any­one.” Case in point: Belle Gibson, who lied via In­sta­gram, and showed lit­tle re­morse after­wards.

But per­haps the big­gest rea­son we all lie (even just those harm­less white lies) is be­cause it’s so easy. “It’s much eas­ier to lie in or­der to get some­one’s money or wealth than to hit them over the head or rob a bank,” says Har­vard ethi­cist Sis­sela Bok.

The more we lie, the eas­ier it gets, say stud­ies. For a con woman (or man, for that mat­ter), who tells lie upon lie, the act gets eas­ier and eas­ier, un­til, of course, it all comes crash­ing down.


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