How Silicon Valley Entrepreneurs Commit Criminal Fraud
Criminal Deception in Silicon Valley
A study of 12 Silicon Valley tech ventures charged with securities fraud between 2000 and 2023 reveals how entrepreneurs escalate from dramatized storytelling to criminal deception. Analyzing court documents, the authors identify three forms of 'façading'—surface, reinforced, and deep—that combine discursive and organizing efforts to fabricate evidence, fake demos, and co-opt verification. The findings highlight the hidden mechanics of fraud and its severe consequences, including $687.6 million in losses and 73 years of prison sentences.
Entrepreneurs transgress from dramatized discourse into criminal deception when their stories become unhinged from reality and involve increasingly sophisticated organizing efforts to fabricate material evidence, data, and information about their ventures’ performance.