I struggle to understand the psychology of how founders who are clearly incompetent charlatans get second+ chances -- they couldn't do fraud successfully but investors have a faith they could do business successfully. But they still get funding (like adam neumann of wework fame) and full on "narrative tongue baths" by the business media community (like this wsj article on trevor milton).

Why? I struggle to understand the incentives + motivations here.

"Hey this guy fooled a lot of people last time and the people who got in and out early made a killing. This time I'm going to get in early."

"He's got the hustle to do what it takes to succeed and is unencumbered by a moral compass. Gotta break a few eggs to make an omelet."

"Pssh that's nothing compared to the fraud I committed to get here. Fake it till you make it baby!"

"It takes balls to defraud powerful people and then do it again. I respect the machismo."

Take your pick.

The past failure is in the abstract, and in the past. And anyway, they were unfairly maligned. There is an inside version of the story that they will be happy to tell you, which was clearly not their fault.

But that is neither here nor there. What is important is the now, and in the now you are in the presence of someone who is Good At Making Money. And you too, by joining forces, will be Making Lots Of Money with this charismatic person, who can clearly achieve great things and will be clearly avoiding any past missteps that may have caused their downfall right before reaching greatness (but weren’t their fault anyway).

Think of the future, not the past!

The reason for this is the same as why real estate is so expensive and the price of gold is so high. There is far too much capital accumulation among the ultra-wealthy, who don’t know what to do with all that money. The expertise of someone like this founder lies simply in recognizing that this is the case and that it can be monetized.

I remember listening to a podcast (possibly complex systems?) that said the best way to find what kinds of frauds are out there is by looking at what known fraudsters are up to.

[0] It might have been this one, but I can't find it in the transcript https://www.complexsystemspodcast.com/episodes/fraud-as-infr...

Charisma and connections are pretty much all it takes. Really only connections are needed but since these people are coming back from being exposed they need charisma to assuage the concerns of their connections.

It's distribution. Guy's got a brand name now. People and investors recognize his name. It's a lot easier to find an absolute quantity N of investor money for a fraudulent but well-known name than it is for an unknown upstart.

The fraud might have a low close rate but the top of the funnel is huge. The unknown upstart can't even get meetings.

I recently invested a small amount of money in an early stage company where I had to declare I was either a 'high net worth individual' or a 'sophisticated investor'. The mutually exclusive clause seemed important to me.

A lot of the investors are also bullshitters so they like bullshitting founders. I see a similar thing in companies. People wonder why people who don’t produce much but are politically savvy are moving up. The answer that most leadership is the same so they recognize each other.

This come up in a subthread last week https://news.ycombinator.com/item?id=47305450

My guess is that they're good talkers. They make it sounds like they learned their lesson or were framed but regardless if you hire them they'll make you rich!

Well, here we all are clicking the link and engaging in a discussion on the loathsome creep. Attention, attention.

My assumption is that the people he's working with today also would like to do some fraud, and are hoping he'll be better at it this time.

And/or they're part of the Trump rich people's club. They all tend to stick together and help each other.

To understand why you must understand the tax code. You can write off any investment losses. You can also recover losses if its from fraud. Though usually not fully. But you give 1 million for investment, boom its a fraud, and you get $800,000 back as opposed to keeping a million and paying $400,000 on it in taxes. It's a win-win situation. There is no penalty in betting on fraudsters. Whether this guy's schemes are deliberately for that is debatable. But on the flip side, putting downsides to investing on possible fraudsters considerably hinders any new genuine start up ideas from gaining investors.

Does anybody know his investors? I'd like an intro:)

I can guarantee you that Elizabeth Holmes will get a big bunch of funding for a new startup as soon as she's out of jail.

Even with SBF I'm 50/50 on that.

some of the 'investors' use such as investments as tax-write offs

> SyberJet’s own history shows the challenges. Over the past 40 years, an eclectic mix of financiers from Dubai to Taiwan invested hundreds of millions of dollars in developing the plane maker’s lightweight business jets. But in all that time just four planes made it into the hands of customers.

Putting two and two together it seems to me that this business is a front for money laundering or something.

These fraudsters who get second chances have got blackmail. Trust me, all the people we see in the media are sharks. They only help each other if they feel a threat or have something to gain.

Look how many people couldn't care about Epstein and the fact he was a convicted sex offender. Bill Gates didn't care and he was literally the richest person in the world at one point.

The rich VCs and billionaires and aspirational billionaires only care about doing what they want to do and don't care what the peons like us think or care about.

Having a great exit is the golden dream for VCs.

But having founders that raise lots of money also have a value in itself even if the business fails in the long run.

not speaking for upwards failures in general, but for the extraordinary cases of convicted frauds being pardoned, the incentives are:

1. his $1.8M donation to Trump shows other felons and fraudsters that paying Trump will pay back in dividends (Trump profits)

2. By pardoning thousands of frauds, con artists and outright violent nazis (Jan 6), Trump builds himself an army of loyalists who owe him their lives

3. By putting pardoned frauds, con artists and violent nazis in charge of government functions, Trump replaces the entire US government with one that will do his personal bidding

textbook autocrat stuff

They are charismatic. They know how to work people.

If you've ever worked with narcissists and sociopaths, you'll soon enough discover that they will do anything to get what they want. And they are professionals at playing people.

They know what to say, how to present themselves, how to make their story, and what strings to pull on the people they try to convince.

Some investors are also willing to suspend their disbelief - thinking that if they are the first to ditch to bag, there's money to be made...as long as they're not the ones holding the bag.

Because those investors have exactly same moral and ethical framework. The fraud is just another legitimate way to make money to them. It is the same thing with Epstein or meetoo ... they were actually fine with all that and whoever complains is just pesky idiot.

This article is not praising trevor milton tho.

I just can't comprehend the mental process or discussion that happened which led to this guy getting a pardon.

It's just hard to imagine that anybody would give a f about this fraudster. Only explanation is he must know some dirt on someone.

It's clear now. Modern society runs on blackmail. There's a blackmail hierarchy all the way to the top.

I bet there are many people out there just making a living from just knowing dirt about people.