Elizabeth Holmes: The making of a scam
On the surface, she was the billionaire founder and CEO of a startup that promised to change the world, but behind the scenes, Elizabeth Holmes was not at all what she seemed. Holmes’ company, Theranos, claimed their revolutionary technology would allow them to run hundreds of tests on just a few drops of blood.
If true, this development could change the face of health care as we know it. However, when the technology didn’t live up to Holmes’ promises, the young CEO sank deeper and deeper into a sea of lies. So how did she build a billion-dollar company on a technology that never worked as advertised? Read on and see how Elizabeth Holmes and Theranos scammed some of the world’s smartest and wealthiest people.
1. When I grow up
Elizabeth Holmes was born on February 3, 1984, in Washington, D.C. Her father, Christian Holmes, worked for Enron before that company’s scandalous collapse. Her mother Noel worked as a congressional committee staffer. When Holmes was very young, the family moved from Washington, D.C. to Houston.
Even as a child, Elizabeth Holmes was ambitious and driven. Relatives recall how she would respond when asked what she wanted to be when she grew up: a billionaire. At 9 years old, she wrote this, explaining her dreams to her father: “What I really want out of life is to discover something new, something that mankind didn’t know was possible to do.”
NEXT: Elizabeth’s ambitions took her to Stanford, for a little while, anyway.
2. Stanford bound
While she was still in high school, Holmes had already started a business selling software to Chinese schools. She got straight A’s in her classes and even took private Mandarin lessons. Her skill in that language helped her get into a summer program in Mandarin at Stanford to which high school students were usually not admitted.
With these qualifications, it was no surprise that Holmes would be admitted to Stanford in 2001. While at the university, Holmes studied chemical engineering and worked as a student researcher and laboratory assistant. However, her time at Stanford would be short-lived. Holmes’ ambitions lay in nearby Silicon Valley.
NEXT: Holmes files her first patent and her journey with Theranos begins.
3. What was this dropout hiding?
Dropping out of Stanford would become an enormous part of Holmes’ personal mythos. At just 19 years old, she left the prestigious university to strike out on her own as an entrepreneur. She filed her first patent in 2003 for a wearable device that would supposedly monitor the wearer’s blood and administer medication.
This device never came to be, but from this patent, Holmes founded the company that would become Theranos. Originally called RealTime Cures, Holmes started out with the assistance and backing of her former Stanford professor Channing Robertson. Like her Silicon Valley heroes before her, Holmes based her startup in Palo Alto, one of the most affluent areas in the United States.
NEXT: Channing Robertson was on board, but Holmes’ other professors had been highly skeptical of her ideas.
4. The Edison
In 2004, Holmes changed the name of her company from RealTime Cures to Theranos, a portmanteau of the words “therapy” and “diagnosis.” The first Theranos company headquarters was located in the basement of a house Holmes was renting in Palo Alto. In addition to a name change, the company’s focus had shifted, too.
Instead of Holmes’ original wearable tech idea, Theranos focused on using nanotechnology to allegedly perform hundreds of tests on just a few drops of blood pricked from a fingertip. The blood would be collected in a small tube called a “nanotainer” and analyzed in Theranos’ proprietary machine, known as the Edison.
NEXT: Could the Edison really live up to all of Elizabeth Holmes’ claims?
5. Very weird science
Despite getting one of her former professors on board, many in the medical and scientific community were highly skeptical of Elizabeth Holmes’ claims. One expert who personally brought these concerns to Holmes was Phyllis Gardner, a professor of medicine at Stanford.
“I told her, I don’t think your idea is going to work,” Gardner explained to Vanity Fair. According to Gardner, blood drawn from a fingertip would produce less accurate results than a venous draw because cell tissue and other debris from the finger prick would pollute the already small sample. Despite warnings that her machine would inherently produce unreliable results, Holmes forged ahead.
NEXT: Despite problems with the device, Theranos snagged hundreds of thousands of dollars from investors.
6. Funded on lies
To the average venture capitalist, Theranos had all the makings of a great investment. Elizabeth Holmes was a charismatic speaker, and her clear passion for her idea was able to sway many wealthy and powerful people, mostly men, to her side. She was often described as a young, female Steve Jobs, an entrepreneur who would surely change the world.
Among the early investors in Theranos, you’ll find names like Larry Ellison, the founder of Oracle, and Tim Draper, founder of the well-known venture capital firm Draper Fisher Jurvetson. In early rounds, Theranos raised $500,000 and then $5.8 million, according to Crunchbase.
NEXT: Unfortunately for the investors, there was a lot that they didn’t know about Theranos.
7. Keeping secrets
Theranos investors were largely not experts in the medical technology field and didn’t question Holmes’ claims about what her Edison device could really do. In fact, one of the conditions of investing in Theranos was that they could not ask Holmes to reveal how her technology worked. As many Silicon Valley entrepreneurs are similarly secretive about their proprietary technology, this didn’t initially raise the red flags that it should have.
Holmes also included the condition that she would always have control over her company rather than ceding any power to her investors. Despite ongoing difficulties in getting the Edison to work as promised, Holmes presented the device to these investors as a finished, fully functional product.
NEXT: Investors weren’t the only ones in the dark. Employees at Theranos revealed the bizarre work conditions.
8. Horrible bosses
Holmes’ intense dedication to secrecy extended even to her dealings with Theranos employees. Departments were siloed away from each other, with only Elizabeth Holmes and her right-hand man Sunny Balwani able to oversee everything. Employees reported incidents like Sunny or Elizabeth replying to email chains that they had not been CCed on.
Additionally, employees who brought concerns about the device not living up to Theranos’ increasingly public promises were admonished for having bad attitudes and not believing in the company’s vision. Holmes and Balwani frequently drove critical thinkers out of the company and surrounded themselves with yes-men, with ultimately disastrous results.
NEXT: Holmes’ secret office relationship would later stun investors.
9. Holmes and Balwani
Holmes knew her COO Ramesh “Sunny” Balwani for several years before she invited him to join Theranos. They had originally met when she was in Stanford’s summer Mandarin program and they struck up an unlikely friendship. At the time, Holmes was just 18 years old. Despite their 20-year age difference, this friendship turned romantic.
Holmes and Balwani were dating, and even living together, for much of the time that they were running Theranos. They kept their relationship a secret from their employees and from the board. In the office, Balwani acted as Holmes’ enforcer, keeping a watchful eye on employees and demanding that staffers stop questioning the results of Theranos tests.
NEXT: Holmes’ obsession with one of her heroes influenced how she presented herself, helping her to fool the world.
10. Apple worship
From her management style to her closet full of black turtlenecks, many of Holmes’ choices at Theranos were modeled after her idol, Steve Jobs. Like Jobs, Holmes had dropped out of school to found her company. She often referred to the Theranos devices as “the iPod of healthcare.”
According to former Theranos employees, she based her management style on Jobs as well. As she read Walter Isaacson’s Steve Jobs biography, employees said they “could pinpoint which chapter she was on based on which period of Jobs’ career she was impersonating.” Her similarities to Jobs would also help her to woo investors, convincing them that she was onto something really big.
NEXT: Holmes presented a persona to the world that turned out to be deeply calculated, even down to her voice.
11. Elizabeth Holmes’ voice
One of the first things people notice about Elizabeth Holmes after taking in her bleached-blonde hair and unblinking blue eyes is her unusually deep voice. However, according to former Theranos employees, even Holmes’ voice was not quite what it seemed. Holmes allegedly spoke in a lower register than was natural for her in a bid to command respect in the male-dominated world of Silicon Valley.
Ana Arriola, a former Theranos employee, said Holmes’ true voice was higher in pitch. “It was maybe at one of the company parties, and maybe she had too much to drink or what not, but she fell out of character and exposed that it was not necessarily her true voice.”
NEXT: Holmes claimed to sleep only four hours a night, and demanded the same dedication from her employees.
12. Work-life imbalance
Holmes kept long hours at the Theranos offices and expected the same commitment from her employees. According to John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup, Holmes even had catered dinners brought in to the office every night at 8 p.m. to encourage employees to stay late.
Holmes herself often slept in her office and seemed to subsist solely on a diet of green juice. When asked about her relationship status, Holmes claimed to be married to her work at Theranos. She told Fortune she worked 16-hour days, seven days a week. Employees have reported that she expected them to be available to work at all times, too.
NEXT: The Theranos board finally tries to push back, but they couldn’t slow down Holmes’ lies.
13. The board vies for control
Concerned by Holmes’ unrealistically high revenue forecasts, in 2008, the board of Theranos convened to take action. They urged Holmes to step down as CEO, pointing to problems with her leadership, low employee morale, and unnecessary secrecy.
Carreyrou writes, “But then something extraordinary happens. Over the course of the next two hours, Elizabeth convinced them to change their minds. She told them she recognized that there were issues with her management and promised to change. She would be more transparent and responsive going forward. It wouldn’t happen again.” In a position where most CEOs would have been forced to step aside, Holmes used her incredible powers of persuasion to maintain control of her company.
NEXT: Holmes’ charisma soon made her a celebrity entrepreneur.
14. Elizabeth Holmes in the spotlight
Holmes remained CEO of Theranos, and millions of investor dollars continued pouring into the company’s coffers. Holmes’ fundraising ability soon attracted media attention, and her compelling story and persuasive style captivated fawning tech reporters. Holmes was featured in Fortune and Forbes and even delivered a TED Talk about the idea behind the Theranos device.
Over and over, throughout her media junket, Holmes would repeat the same line about her mission. She claimed her devices would revolutionize medical care, making blood tests easier, less painful, and more affordable so that medical conditions could be detected earlier, and you would “never have to say goodbye to someone you love too soon.”
NEXT: Theranos cut a deal with a major pharmacy chain that would bring their blood tests to the masses … but was the product ready?
15. Theranos and Walgreens
In 2013, Walgreens made a deal with Theranos to bring their machines into designated “wellness centers” inside of Walgreens stores. Despite never seeing concrete results from the devices, Walgreens inked the deal out of fear that if they refused, their competitor CVS would jump on the chance to make a deal with the hot startup.
Theranos was supposed to install devices at Walgreens stores in Arizona as a test, but due to legal issues, they instead opted to have blood drawn at stores and then shipped to their lab in Silicon Valley. Walgreens customers who signed up for Theranos testing were also surprised to submit to traditional venous blood draws instead of the finger prick Theranos advertised.
NEXT: Holmes tightens her security and doubles down on her lies.
16. Security and secrecy
As her public profile grew and the stakes of her lies increased, Holmes increased her security. She hired private guards who referred to her by the code name “Eagle One.” Sunny Balwani was known to security as “Eagle Two.” The windows in Holmes’ office were made of bulletproof glass. According to Carreyrou, visitors to Theranos were monitored heavily by security and even escorted by guards when going to the bathroom.
Employees were not allowed to list that they worked at Theranos on their LinkedIn pages, and people from different departments were prevented from sharing their findings. Engineers and scientists at the company shared no information with one another. Everything went through Elizabeth Holmes.
NEXT: An employee has doubts about Theranos technology, with tragic consequences.
17. Ian Gibbons at Theranos
Biochemist Ian Gibbons was chief scientist officer at Theranos. His name appears after Elizabeth Holmes on the patent for the Theranos device. He was hired in 2005 for his in-depth knowledge of blood testing, and he often tried to educate the Theranos team about the science involved in what they were trying to do.
Gibbons was also vocal about the inconsistent and inaccurate results Theranos devices obtained. His scientific background and concern for patients who might rely on the devices drove him to keep speaking up to Holmes. His position with the company was continually diminished, and eventually, the stress led to his suicide. His widow never heard from Holmes or Theranos after his death except for a request to return any company property.
NEXT: Even as scientists and engineers told her the device didn’t work, Holmes continued the charade.
18. Fooling the investors
Knowing that the device wasn’t yet able to perform hundreds of tests, Holmes continued to demo her machine as if it did in fact live up to her claims. One trick they often employed was to take investors on a tour of the Theranos facilities. At the beginning of the tour, Holmes would draw blood from the potential investor.
She inserted it into one of the Theranos devices. Next, as the tour continued, a Theranos employee would remove the blood from the Theranos device and run it through a commercially available blood testing device. When the tour concluded, the blood test results from the commercial machine would appear to be delivered by the Theranos device.
NEXT: Theranos couldn’t sidestep regulations forever, and soon government agencies were knocking on their door.
19. The FDA takes a closer look at Theranos
Like many Silicon Valley startups, Theranos sought to be “disruptive,” and disregarded regulations in their field. Though Holmes was advised many times that Theranos blood tests would need FDA approval, she continually saw it as optional to follow the most basic regulations.
When inspectors came to look at the Theranos lab, they were only shown the area where commercially available machines were operating. The Theranos devices were not inspected. Only one Theranos test would ever receive FDA approval, but the approval only came after the company had fallen into public disgrace. However, the FDA would later classify the Theranos nanotainers as “uncleared medical devices.”
NEXT: A Wall Street Journal reporter gets a tip that will change the course of the company forever.
20. Blowing the whistle
Reporter John Carreyrou received a tip that Theranos wasn’t running their business aboveboard, and he quickly began an investigation that would have enormous consequences for Elizabeth Holmes and her company. Carreyrou reached out to employees for information on the company, and eventually found the whistleblower he needed in Tyler Schultz.
Tyler Schultz was the grandson of Theranos board member George Schultz and an employee at Theranos. Despite tremendous legal pressure from his grandfather and Theranos, Tyler Schultz gave valuable information to Carreyrou and the Wall Street Journal that allowed them to expose the fraud and potential patient harm that had come from Theranos’ lies.
NEXT: When Carreyrou’s story hit, Holmes responded in a truly bizarre way.
21. The truth comes out
Carreyrou published his first piece on the trouble behind the scenes at Theranos in October 2015. Despite being cornered by Theranos lawyers and threatened not to run the story, Carreyrou felt it was important to tell the truth about what was going on at Theranos. He told Vanity Fair, “It’s O.K. if you’ve got a smartphone app or a social network, and you go live with it before it’s ready; people aren’t going to die. But with medicine, it’s different.”
On the day the article ran, Holmes made no public comments on its contents, nor did she discuss it with her team at Theranos. She hoped that ignoring the story would simply make it go away.
NEXT: More stories emerge from the Wall Street Journal, and Holmes makes an attempt to get control of the narrative.
22. Elizabeth Holmes on ‘Mad Money’
As more news continued to trickle out about Theranos and their shady operations, Holmes made an attempt to take charge of the story. She appeared on Jim Cramer’s CNBC show Mad Money, where she had once been lauded as the youngest female self-made billionaire. This time, instead of praise, she was facing lots of questions about her company’s fraudulent claims.
She told Cramer, “This is what happens when you work to change things. First they think you’re crazy, then they fight you, and then, all of a sudden, you change the world,” riffing on a quote from her idol Steve Jobs.
NEXT: Despite the truth coming out, Holmes strives to keep her dream alive at Theranos.
23. Theranos tries to carry on business as usual
Before the Wall Street Journal story ran, Theranos was valued at $9 billion. As more and more details about the massive fraud at the company came out, the value of Theranos plummeted down to nothing. In 2016, Theranos began closing their labs. The last Theranos lab shut down in 2017, after failing a lab test inspection.
Forbes had named Holmes the youngest self-made female billionaire, valuing her net worth at $4.5 billion. Once the truth came out, they made a new statement on her worth: next to nothing. However, Holmes carried on and kept trying to make Theranos work despite all the evidence to the contrary.
NEXT: Holmes couldn’t run from the consequences of her lies forever.
24. The government cracks down
By 2016, the Food and Drug Administration (FDA) and the Securities and Exchange Commission (SEC) were among the federal agencies investigating Theranos. Centers for Medicare & Medicaid Services were also looking into Theranos devices and claims. The outcome for Holmes and Theranos was beginning to look very grim.
In June 2016, Walgreens ended their partnership with Theranos and closed all the wellness centers where Theranos tests had been sold. The following month, Holmes was banned from working in the lab test industry for two years, and Theranos began closing down their labs. Investigations into Holmes and Theranos continued, and it seemed like the two-year ban was just the beginning of her punishment.
NEXT: Holmes and Balwani face charges of massive fraud.
25. Facing charges
Amid the turmoil of 2016, Holmes ejected Sunny Balwani from her company and ended their romantic relationship. The two remain intimately linked, however, as they now stand side by side facing charges of massive fraud. In March 2018, the pair was charged by the SEC with fraudulently raising over $700 million.
In addition to the charges, Holmes is barred from being an officer or director of a public company for 10 years. She was removed from financial control of Theranos and ordered to pay a $500,000 fine. Whether it was from dedication to her long con or sheer delusion, Holmes made one last attempt to keep Theranos alive.
NEXT: Despite the charges, Holmes remains CEO and makes one last grab for cash.
26. Holmes’ desperate plea
In 2018, Theranos was on its last legs, but Elizabeth Holmes wouldn’t let it die. Holmes sent a note to her remaining investors telling them that the company was working on a blood test for the Zika virus, but they had hit some delays in developing the test.
The company was relying on a loan from a private equity firm, but it seemed that without more money, they would soon default on that loan. Following cost-cutting layoffs that reduced Theranos staff from over 100 employees to about two dozen, Holmes made one last request for more funding from her investors.
NEXT: With pending fraud charges, Holmes is unable to secure the funding she needs to keep Theranos afloat.
27. Holmes steps down
After nearly three years of bad press and legal charges, Elizabeth Holmes finally stepped down as CEO of Theranos in June 2018. She planned to continue to chair the Theranos board and appointed Theranos general counsel David Taylor as CEO.
Investigations revealed that Holmes’ claims that her devices were being used in Afghanistan were completely untrue. Holmes had also claimed that Theranos profits in 2014 exceeded $100 million. In truth, the company only made $100,000 that year. Despite borrowing credibility from her illustrious board and dazzling investors with a Steve Jobs-esque presentation, Holmes couldn’t keep up her facade forever.
NEXT: The $9 billion company winds up with nothing left.
28. Theranos closes its doors forever
In September 2018, new Theranos CEO David Taylor finally made the decision to close the company down. In an email, Taylor wrote that the company was negotiating a settlement with the private equity firm they had borrowed from in their final days. That company would then own all of Theranos’ dubious “intellectual property” and allow them to distribute their remaining cash to other creditors.
In the email, Taylor wrote, “Because the company’s cash is not nearly sufficient to pay all of the creditors in full, there will be no distribution to shareholders.” The company that had raised hundreds of millions of dollars had nothing to give back to its investors.
NEXT: Find out what Elizabeth Holmes has been up to since she left Theranos.
29. Elizabeth Holmes today
At the time of this writing, Elizabeth Holmes and Sunny Balwani are currently awaiting trial for fraud. Holmes has pleaded not guilty to the charges. If she is convicted, she could face up to 20 years in prison. Holmes has also recently gotten engaged to hotel heir Billy Evans. She doesn’t wear black turtlenecks anymore.
In addition to the popular HBO documentary about Holmes and Theranos, there have been reports of a Hulu series and a separate movie in development about her story. SNL alum Kate McKinnon has signed on for the role of Elizabeth in the Hulu show, and Jennifer Lawrence will play Holmes in the movie.
NEXT: Elizabeth Holmes isn’t the only scammer that made headlines …
She suspiciously paid for everything in cash for years, then people realized why
A mysterious woman, Anna Delvey was a New York socialite that everyone had heard rumors about. If you were to ask her “friends” where she came from, some people would shrug their shoulders and others would call out random countries and cities, none of the answers ever matching up.
She appeared at the most exclusive events with the most influential people. It was all about the luxury life for Anna until people realized something strange about her behavior …
Who was this mysterious girl?
Looking at Anna, it was apparent that she came from money. Anna carried herself like someone who had a lot of power and money as she always wore designer clothing. Everyone was interested in Anna because her existence was shrouded in mystery. If you asked her “friends,” most would recall that she was an heiress …
None of the answers ever aligned. She was living a life we could only dream of, which was why no one was able to see the truth lurking underneath all her money and popularity. Anna managed to scam everyone for years. But how did she do it?
Anna’s scamming career began at 11 Howard Hotel
The beginning of Anna’s story truly starts in a hotel called 11 Howard in New York City. Anna was no fool, and she knew that this SoHo location was a popular hangout for actors, models, athletes, and socialites. It was here that Anna learned that attitude and confidence are everything. She figured that if she acted as though she was one of the high-end clientele, the hotel wouldn’t question her.
For Anna, her location and her inner circle would be the two most critical stepping-stones necessary to make a name for herself. Her first order of business? Making friends in the right places. And so began the friendship of Anna Delvey and Neffatari Davis, otherwise known as Neff, a concierge and aspiring cinematographer.
‘Hey big spendahhh’
Being a worldly gal, Anna knew the deal when it came to staying in fancy hotels. She knew that tipping with big bills would open doors for her when it came to getting in cahoots with the staff. Anna had been staying in a room that cost her $400 a night, and without blinking, Anna would pay the fee and continue to tip the staff in $100 bills.
Anna would make a point to ask Neff for recommendations around the city, but Neff noted that it didn’t seem like Anna actually heeded the advice.
Neff noticed that Anna had already checked out the main parts of the city and had become familiar with regular customers and employees. Could Anna be striking up conversations with her simply because she wanted to? That’s what it was beginning to seem like.
When Anna met Neff
Anna would take Neff to clubs, bars, and restaurants (and always tipped big and paid in cash). She would find ways to start conversations with people who seemed like they would be an excellent addition to her social circle. Anna would also spend an obscene amount of money on ridiculous things wherever she went.
It was reported that she hired a personal trainer for $4,500, and it became evident that money was no issue for Anna, and she was extremely generous with it. Those around her never thought to question where she was getting all this cash from, as they were reaping the benefits of hanging out with a supposed “heiress.”
Anna had a way with people that got her VIP access to everything
If there was one solid truth to be spoken about Anna, it was that she knew how to work people, and she knew how to win them over. She had a particular way of making influential people feel like they could trust her, and she was quite aware of this superpower. Anna had big plans in mind, and she was going to make Neff a part of them.
She was working on creating a business plan that could be compared to the one behind Soho House. Only the best of the best were allowed entry, and if you weren’t “on the list,” you weren’t allowed in. Neff was Anna’s right-hand gal, setting up business lunches and dinners for Anna at top-notch locations.
All the while, when Anna pulled out her wallet, she was always pulling out cash.
Anna outgrew the elites and became an A-lister without even trying
Anna began to outgrow the constricting walls of the “elite” and she started to find a home among celebrities and A-listers. She became a jet-setter, taking private jets to parties hosted across the globe, wearing clothes of the newest trends. She was a staple rich girl, a stereotype that no one bothered questioning.
Among Anna’s important friends was Michael Xufu Huang, a thriving art collector and museum founder, and the two became quickly became close. It was Michael who noticed that some of Anna’s behavior was very out of the ordinary and suspicious.
When she made friends with Michael Xufu Huang, Anna’s lies began to unravel.
Anna’s friendship with Michael Xufu Huang sparked her downfall
The two “best friends” traveled across the globe to Italy to celebrate the Venice Biennale, with Anna making strange requests of her new friend. She asked if Michael would put the flight and hotel on his credit card, with the promise that she would pay him back. Michael didn’t think much of it at the time, but the requests grew stranger, and he grew more suspicious.
Michael realized while in Italy that Anna paid for EVERYTHING in cash, and he never saw signs of a debit or credit card.
Of course, he forgot about the ordeal until it was time for Anna to pay Michael back. When the time came for Anna to fork over the money, she pretended to forget all about it. Michael, who often spent time around the super-wealthy, figured that this was just a trait that came with all rich people. When you’re rich, you can usually forget about minor things such as a few thousand dollars that you owe a friend. He brushed it off, eventually forgetting himself.
Anna hired a PR firm to handle her birthday party, because why not?
For Anna’s birthday bash, the bigger, the better! She wanted it so memorable that she hired a PR firm to handle everything from the guest list to the venue. One of the lucky partygoers was Michael, whom she still hadn’t paid back for the travel costs. The party turned out to be a huge success, and everything seemed to go by without a hitch.
After the party, the restaurant reached out to Michael after seeing photos of him and Anna together on his social media. The message asked him for Anna Delvey’s contact information.
He told The Cut, “They were like, ‘Do you have her contact info? Because she didn’t pay her bill.’ Then I realized, Oh my God, she is not legit.”
And so began Michael’s personal investigation into ‘Anna Delvey’
Michael launched a personal investigation into the life of his “friend,” and began looking for clues that could point him in the right direction. He began asking mutual friends what they knew about Anna, and it seemed that everyone had a different explanation for her origin and her money.
As Michael continued looking into Anna, Anna was incredibly busy trying to establish her art club, named “The Anna Delvey Foundation.” She hired Mac Kremers, a creative director from London, to assist her in making the foundation a reality. She was hoping that the foundation would be a “dynamic visual arts center” and would feature different pop-up displays from various artists.
Anna had BIG plans for her new business that would never take flight
Before she knew it, Anna was meeting with big names such as the founders of Nobu and the owner of 11 Howard to help get her foundation up and running as soon as possible. Her goal for the building was to include three restaurants, a juice bar, two floors of hotel rooms, and a German bakery.
Richie Notar, one of the founders of Nobu, claimed that “apparently her family was prominent in Germany and were funding this big project for her.” In her pitch, Anna claimed she was a lifelong art collector, and she created an 80-page brochure that she intended to supply potential investors with.
Anna enlisted the help of ‘Pharma Bro’ Martin Shkreli
For Anna to make her newest venture a reality, she needed money, and a lot of it. She teamed up with an anonymous partner on the project, telling them that she had plenty of money but didn’t have access to it. She said that because her trust was located outside the United States, she wasn’t granted access.
Anna teamed up with Martin Shkreli (aka “Pharma Bro”), whom she met during one of her extravagant parties. After the entire ordeal, Shkreli would speak publicly about Anna, claiming she learned most of her tricks from him. Shkreli would go on to make a name for himself in the media after he was convicted of securities fraud.
Scamming lawyers and big businesses? No problem!
Although the future of her foundation seemed daunting, Anna continued to push, but kept running into significant problems. Neff claims that “she was always on the phone with lawyers. They were always toning her down. Like, ‘Anna, you’re trying to make something that’s worth this much be worth that much, and that’s just not how it works.’”
Although Anna had successfully scammed restaurants and clubs, she was now dealing with bigger roadblocks — namely, lawyers and investors. While her foundation was being built, Anna began panicking upon the realization that her cash flow was starting to dry up. She had to think of something, and fast.
Anna’s lack of credit cards raised some red flags
Neff recalls one night where she and Anna went out to dinner by themselves (which was abnormal, as Anna always needed to be surrounded by a group of people). Embarrassingly enough, Anna’s card was declined at the end of the meal. When it was revealed that the card had been declined, she gave the waiter her phone that had a list of credit card numbers to try.
Not a single number worked.
After these events, Neff’s manager gave her a call to discuss an issue he had uncovered. He was concerned that there was no credit card on file for a Miss Anna Delvey. When Anna had first arrived at the hotel, they had accepted a wire transfer since they were so new, but now that 11 Howard had established itself, it was crucial they have a card on file.
Anna’s method of dealing with debt was to just go somewhere else
The hotel’s manager put Neff in charge of the issue, seeing as the two were close friends. It was eventually revealed that Anna owed the hotel $30,000 overall. Neff, who believed this wouldn’t be a problem for Anna, quietly took her aside the next day and explained the situation to her. Neff remembers that Anna (in typical heiress fashion) gave her a slick smile and said that a wire transfer would be on the way soon.
Anna stood by her promise, and the hotel received a wire transfer for $30,000. Anna believed that this would be the end of her issues, but there was still a small problem with her payment. Regardless of whether or not she was able to pay the bill, the hotel still needed a working credit card on file for her. They threatened to lock her out of the room if they could not receive a number soon.
Anna’s trip to Morocco would be her last hurrah
Outraged and insulted, Anna took the sleazy advice that she received from her dear friend, Martin Shkreli. She threatened to purchase web domains in all of the hotel managers’ names, which would result in them all eventually owing her money. She then topped off her slew of insults by telling them she was moving out.
While looking for a new home, she decided to take a trip to Morocco, where she intended to film a behind-the-scenes documentary about the progress of her foundation. The trip to Morocco turned out to be a bust, however, as her personal trainer had to return home due to food poisoning.
When Anna returned, all hell broke loose.
She hustled thousands of dollars from close friends and other wealthy acquaintances
Anna’s trainer received a hysterical phone call from Anna upon returning. Anna was at the Four Seasons in Casablanca, and she was having a meltdown. None of her cards were going through, and the hotel was threatening to call the police.
Her trainer, feeling horrible for her client who had become her good friend, gave the hotel her credit card number. Unfortunately, her card didn’t go through either. Taking it a step further, the trainer called a friend, Rachel Williams, and asked her to give the hotel her credit card number. Once more, the card didn’t go through. The hotel then apologized, saying that the issue had most likely been on their end all along.
You didn’t expect Anna to pay the bill for Morocco, did you?
The bill for Morocco ended up being paid, and the bill fell to Rachel Williams. When the hotel threatened jail time, she put down the full $62,000 on her American Express card, which was more money than she was making yearly. Anna’s trainer was absolutely furious when she found out. She now knew that Anna most likely wasn’t who she said she was and they were all caught in the middle of a scam.
Anna’s trainer (who had been housing Anna) tried to kick her to the curb, and she left, leaving her laptop behind. Not wanting to see Anna, her trainer left it at the front desk for her now ex-boss to collect. When Anna appeared at the hotel lobby, she refused to go, telling the front desk that she NEEDED to meet with her trainer.
Eventually, Anna Delvey was blacklisted from almost every location
The rumors of Anna’s inability to pay bills traveled, and she was soon blacklisted from almost every hotel in the city. She even went so far as to ask her lawyer if he could house her for a bit. He refused, but reached out to her trainer, asking her if she would be able to let Anna stay with her. Her trainer quickly declined, and instead set up an intervention to be held for Anna at a nearby restaurant.
Waiting for Anna would be her trainer and all the other people that she owed money to. The intervention was a tough one, but it was necessary for them to get their point across. Anna sobbed and said that she would soon have enough money to pay everyone back after she signed the new lease for her foundation.
Sorry Anna, better luck next time!
The trainer, with only shreds of patience left, blurted out, “Anna. The building has been rented.” Anna’s trainer immediately whipped out her phone to show her the headline which read, “FOTOGRAFISKA SIGNS A LEASE FOR ENTIRE 45K SF AT ABY ROSEN’S BUILDING.” Anna’s response was not surprising. “That’s fake news,” she said, casually.
Despite her nonchalant reaction, things were going downhill for Anna. It was there that Anna fell from her high horse, with no chance of recovering this time. At the same speed she rose to New York City’s “it” crowd, she fell, hard. This time, Anna could NOT talk her way out of her impending doom.
Where did she really come from?
Born in Russia in 1991, Anna Delvey, originally Anna Sorokin, moved with her family to Germany at the age of 16. These days, she spends all of her time in a tiny jail cell, but there was once a time where she had the world at her fingertips, an opportunity she took advantage of.
She was given the chance to move to London to study at the Central Saint Martins fashion school and intern at Purple magazine, a very prestigious publication. After doing some traveling, it was in Paris that Anna first had a taste of life at the top, and it was there that she vowed to stay at the top no matter the cost.
Nobody was sure where Anna Delvey came from, but who cares?
As mentioned, nobody could accurately pinpoint where Anna was from and what she did. People began to assume that she was an international heiress due to her European accent and her never-ending cash flow. In New York, there are many instances of “trust fund babies” and wealthy individuals, so Anna fit right in.
As far as anyone was concerned, Anna was not suspicious in any way, and who needs an explanation when you’re getting free meals and drinks?
Once Anna had established the necessary connections, she began throwing dinner parties at some of the most expensive and elite restaurants in the city. Anna didn’t have to speak, because her money spoke for her. She didn’t have to try very hard to attract the kinds of people she wanted around her.
Anna Delvey, New Yorker, socialite, and con artist?
In New York City, news travels fast, and there were already articles published about Anna Delvey, claiming that she was a “wannabe socialite.” Naturally, Anna did NOT react pleasantly to these articles. Rachel, who still hadn’t received her money from Anna, decided to email the New York District Attorney’s Office.
Included in her email was the article about Anna, along with the words, “I think this woman is a con artist.” Rachel soon received a call from the office personally, where they responded to her email, saying, “We think you’re right.” Not long after that, Anna was on their radar, and she would soon be facing the repercussions of her extravagant and deceptive lifestyle.
Wannabe socialite busted
The headline on the day Anna was arrested read, “WANNABE SOCIALITE BUSTED FOR SKIPPING OUT ON PRICEY HOTEL BILLS.” Of course, Anna moved fast to find a lawyer and was able to get out on bail. Afterward, Anna decided to brush it off and continue business as usual. She didn’t waste any time getting back into her spending habits.
Anna gathered the funds to take a trip to California, where she was arrested once more in Malibu. She returned to New York, where she came face-to-face with “six counts of grand larceny and attempted grand larceny, in addition to theft of services.”
Bye Anna, enjoy prison!
Anna was quickly sent to Rikers Island jail, this time without bail. Surprise, surprise, Anna was not a German heiress. Her real name was Anna Sorokin, she came from a humble, working-class family, and she was facing 15 years in prison. However, Anna still attempted to use her silver tongue to get herself out of paying for her crimes.
She tried to offer the judge a plea deal of one to three years, an offer that was swiftly rejected. The judge attempted to offer Anna an arrangement of three to nine years, which Anna refused. Instead, she elected to go to trial, with the possibility that she might regret not taking the judge’s deal.
Now holding auditions to play the part of Anna Delvey
New York Supreme Court Justice Diane Kiesel stated that Anna has shown absolutely no remorse for her actions, and her request for one to three years is proof that she does not understand the severity of her actions. Anna has since been sitting in prison, awaiting her trial. During the wait, it was announced that there will be a Netflix series based on her antics.
Hilariously, one of the judges on the case claimed that Anna is likely more intrigued by who will be playing her in the series, instead of her own trial (she wants Margot Robbie or Jennifer Lawrence, FYI). In regards to her new home in a prison cell, Anna has said, “This place is not that bad at all, actually. People seem to think it’s horrible, but I see it as like, this sociological experiment.”
Her lawyer claims that Anna is actually doing well in prison, whatever that means.
Anna’s a ‘unicorn’ in prison these days
According to Anna’s lawyer, “She is like a unicorn in there.” It is reported that she “made friends” in prison, and is intrigued by the murderers that are in there with her. She says she enjoys studying the people around her in the cells. Anna is reported to have said, “This one girl, she’s been stealing other people’s identities. I didn’t realize it was so easy.”
Well, it sounds to me like Anna is actually having, dare I say, “fun” behind bars?
Regardless, as the audience of this entire debacle, we’re still left with a few questions … HOW did Anna do it? How did she manage to swindle ALL of New York City? Is it true that appearances are really everything, or was Anna just a particular case?
Scam level = expert
Those who have been following Anna’s case believe that, overall, she scammed about $275,000. She used false documents to receive loans from different banks which showed that she had millions of dollars in a European bank. It was also discovered that she floated bad checks between banks and took out lines of credit that she knew she wouldn’t pay back.
It is assumed that she planned to keep the shenanigans up while her business was taking off. Unfortunately for Anna, she was caught before her company could become a reality. The way Anna lived her life promised that she would lead a life of luxury, but it was also inevitable that she would be found out.
Like her story? You can write a letter and tell her!
Anna, reveling in her current fame, has taken to Instagram since her imprisonment on Rikers Island. Although it is likely NOT her posting, she is pushing for her followers to write to her in jail. She has even shared her mailing address in a post on the social media platform.
With thousands and thousands of followers, it is likely that she will receive letters from people who are fans of her “summer of scam.” It seems that Anna is still making headlines, even from the confines of her prison cell, as her last appearance in court started quite a riot across different news sites and social media platforms.
Anna Sorokin is now a fashion icon
On March 27, 2019, Anna Sorokin appeared in court wearing a designer dress, a black choker, and oversize glasses. This made headlines because it seems as though Anna is still trying to give the appearance of a German heiress, even though she is 100% not. It was revealed that her defense team has hired professional stylist Anastasia Walker to dress her during the trial.
In an email to GQ from Anna’s criminal defense attorney, Todd Spodek, he explained that, “It is imperative that Anna dress appropriately for the trial. Anna’s style was a driving force in her business and life, and it is a part of who she is. I want the jury to see that side of her and enlisted a stylist to assist in selecting the appropriate outfits for trial.”
Social media might make you become a scammer
So far, some of the words from the trial have made everyone in New York want to hire Todd Spodek. Some already-famous words of his have been, “There’s a little bit of Anna in everyone. Everyone lies a little.” He began his defense by referencing Frank Sinatra’s, “New York, New York.”
He said that the idea of “making a brand new start of it, resonates with people all over the world” who can identify with Anna’s need to reinvent herself as an heiress in the Big Apple. Spodek mentioned how social media comes into play when it comes to Millennials, and how they feel the need to pretend.
He referenced the motto “fake it until you make it,” which Anna obviously took to extremes.
Breaking news: We have reached a verdict …
After a month in the State Supreme Court in Manhattan, Anna was found guilty on several counts. When “fake it until you make it” turns into fraud, it’s safe to say you took it too far. She was found guilty of second-degree grand larceny, theft of services, and one count of first-degree attempted grand larceny. She was sentenced to 15 years in prison.
Since Anna is a German citizen who overstayed her visa, she was at risk of being deported. Rachael Yong Yow of ICE reported that they planned to send her back to Germany as soon as the court proceedings concluded. Now that she was found guilty, she has to serve her time in United States prison and will be deported following time served.
An app called BLADE, which is dubbed as “the Uber for helicopters,” has recently been a favorite of the rich and the famous. Kathleen McCormack, the former CFO of BLADE, testified in early April claiming that the company allowed Delvey to travel on a flight to Omaha, Nebraska, at the cost of $35,000.
Delvey was not expected to pay the hefty fee up front because she was considered a trustworthy patron of McCormack’s. Although Delvey had never used the app before, McCormack said, “Our CEO (Rob Wiesenthal) had briefly socially run into her, and him knowing her through those circles, we felt she was good for payment so we booked her for the flight.”
Still no payment
After a month, BLADE had still not received a payment from Anna, and McCormack was determined to figure out what was going on. When McCormack testified in court, she presented emails between her and Delvey, where McCormack demanded that Delvey settle her bill. Like usual, Delvey would say that the money was on its way and that the delay was due to her being locked out of her Gmail account.
Rob Wiesenthal threatened to get legal forces involved after a wire transfer that was received in June turned out to be fake. Todd Spodek, Delvey’s attorney, fired back, “Have you ever gone to a restaurant and gotten full-service treatment and said, ‘I’ll pay you later?’ Of course not, it doesn’t work like that. I’m not sure how BLADE was operating to be able to say, ‘OK, $35,000? No problem. Pay us at some later point.’”
Todd Spodek continued to fire back at BLADE, saying that the only reason they allowed her to take the flight in the first place was because they believed she was some kind of heiress. He followed up with, “They believed she was some trendsetter who was gonna Instagram it up. And they gave her the plane.”
McCormack verified that the company did not give free flights to “influencers,” as it was against the company’s policy. Regardless, this small hiccup with BLADE was only a small part of the larger picture, in which Delvey now faces 15 years in prison for her multitude of crimes. They are only one of the many companies that are fighting back against this mega-scammer.
The obsession with scammers
Delvey’s case has captured attention from all over the place, from socialites to media to fashion magazines. The public is absolutely fascinated with her as she seems to be maintaining her image even from the courts. She threw the media for a loop when she appeared in court the first time wearing a low-cut Miu Miu dress.
Anna Delvey’s sudden rise to fame also has to do with the public’s sudden obsession with scammers, frauds, and con artists. Todd Spodek made the excuse that, “Irrespective of many of the negative things she may have done, that is a rare skill, and it is a skill that lots of people we adore have, from Steven Spielberg to Bill Gates to Steve Jobs — all of these people who through their own ingenuity make something happen out of nothing.”
Same, but different
We recently saw the obsession that stemmed from Billy McFarland, one of the most famous recent fraudsters in history. McFarland swindled investors out of millions of dollars with the idea that he would create a festival made for the elite. Fyre Festival was meant to be a luxury music festival that would be an experience unlike any other.
When the event occurred, there were serious problems with security, food, understaffing, accommodations, etc. McFarland and Ja Rule, a coconspirator, were sued for $100 million on behalf of festival-goers. McFarland pleaded guilty to two counts of wire fraud and was sentenced to six years in federal prison.