Stephen A. Lawrence wrote:
> I have not been following the story. Is there evidence that they
> benefited financially? It isn't a fraud unless someone is defrauded.
They had investors. I think that says it all.
Not necessarily. As I said, it depends on how they spent the money.
(I have no idea how the people at Steorn spent the money.)
See above. Mills has investors, and his claims have encouraged them to
invest. Either he's right, or he's mistaken, or he's committing fraud;
there's no fourth possibility.
I do not think there is any chance he is committing fraud, because,
as I said there are much easier ways to commit fraud. Fraud does not
involve locking yourself in a lab for decades, slaving over mass
spectrometers. If it fraud, you just pretend to be working, while
actually you are at the beach getting a tan.
But in any case, regarding the question of where the money went, how do
you know what he spent it on?
I do not know, but I have heard from people who visited Mills and
have connections that all of the money appears to be spent on
research. Of course this is only a rough estimate, but there is no
sign that millions have been pocketed.
Perhaps more to the point, has Mills, personally, drawn no salary?
That's hardly called for! Unless he is fabulously wealthy, he
deserves a reasonable salary. His investors cannot expect him to live on air.
If he is paying himself $200,000 a year, I would call that borderline
fraud. $1 million per year would be out-and-out fraud.
> If he was dishonest he would take the
> money and run, instead of spending it on mass spectrometers.
The kind of argument you're positing doesn't work in cases of massive
fraud . . .
I mean that people like Madoff do not actually do any work. Madoff
did not invest the money. He just spent it. If he had invested it and
lost it, without telling anyone, that would be accounting fraud but
not a Ponzi scheme. If he invested it, lost it all, and told everyone
in their monthly statements, that would not be fraud. It would be bad
luck or incompetence.
By the same token, reliable sources tell me that Mills and his
colleagues are working hard at the lab. If he spends all of the
investment funds and does not succeed in making a useful or at least
a convincing gadget, that would not be fraud either. Again, it would
be bad luck or incompetence. Perfectly legal, as long as he tells the
investors what is happening, and informs them up front that his
venture is risky.
Madoff stayed until the money ran out and the roof fell in -- he had no
exit strategy, as far as I can see.
That's true. But most Ponzi scheme operators do have an exit strategy
-- they run. He was too famous to run, I guess.
And note well: Madoff spent an
awful lot of the money paying out 'interest' on people's investments.
He didn't just run off with the whole pile; if he had, he'd be living in
luxury today on some South Seas island.
That's how a Ponzi scheme works. You have to pay the early investors
to make the "take" grow exponentially. You kite it up and then just
before it collapses, you grab the money and run. Madoff did not run,
but most Ponzi operators do, as I said. He acted like a bank robber
who stands on the street in front the bank counting the cash until
the cops show up. He seems addled.
- Jed
