Finding Future Fraud (Black Diamond Capital Investors LLC)

[Kurt]

This is a project that I have been working on, mostly for fun, but I suppose I could find a way to monetize it if I had cash to hedge a bet against what I see. But if I set out to raise that kind of money I too would meet the pre-requisite for being a fraudster. So I am not going to. Cheaper to fail with speculation than it is to fail with money.

But this story here is ripe for the picking about finding future fraud.

https://nypost.com/2023/05/11/worlds-mo ... ndergrads/

The key pre-fraud stuff here is:

They compare themselves to other unrelated Harvard Institutions that have nothing to do with money but are well known. Like the Lampoon and that accapella group that had Rashida Jones a member.

Then we have the "Most exclusive" tag. "Membership Limited" "open only to Harvard Students" but soon, I bet, we will see that they will open up to non-Harvard people and cash will flood in.

A big one for all fraud is "Founded Long Before it Was Actually Founded" Their website was Registered in 2020 but not active until late August of 2021. According to the filings, it was formed in 2012. Did literally nothing under chairman Patrick Colangelo (https://vidy.com/about claims to have founded Harvards "biggest" business and tech orgs...they probably are the biggest too but still insignificant) and under Alex Kaufman they also did literally nothing except be forced to dissolve by Court Order of the SOC (that means they did not have their shit together at all). One of the Managers is listed as Geoffrey Kristof, the son of New York Times columnist Nick Kristof ...Which means nothing but I thought it was funny. After the forced dissolution the proper paperwork was filed and the corporation opened again in October 14th under John Beadle. Then February 2023 John Beadle transferred manager to Jaqueline Wei, a Senior at Harvard.

So not exactly running since 2012. Back then it seems to have been a resume padder (probably a good one too)

This is the weird part.

https://www.blackdiamondcap.org/sponsorship

Sponsors get access to people to recruit and pay funds to defer management costs, allow research and attending of conferences. So you have a for profit soliciting donations. Shitty companies do that quite often. A $300k portfolio is not that much and could easily be gathered by kids of well heeled parents, but I would be wary of claims of gains as those could be hidden also by funds from well-heeled parents.

Anyway, I suspect that someone in this group, maybe others will be busted for fraud or SEC violations in the future. Its a self promoted "Best and Brightest" story and that backstory is really dodgy with at least 11 years of a barely managed LLC and one forced dissolution, followed by a puff piece on how thorough they are.

Most business fraud is done by shitty business practices trying to play "catch up" from their poor choices. The self styled "elite" of this group will likely have zero experience and upon graduation be in charge of managing a lot more money but without any funds or sponsors to come bail them out.
Unless they get some good government connections.

[snaark]

You should get a job for one of those hedge funds that short companies that do scammy things. Hindenburg Capital seems to be on a roll.

[Kurt]

You should get a job for one of those hedge funds that short companies that do scammy things. Hindenburg Capital seems to be on a roll.

I would have fun with that.

The problem with this one is they do not even have a CIK number with the SEC. So basically they should not be trading anything with anyone and never should have been.

I doubt Hindenburg would bother shorting a company with $300k in assets.

Their claims in 2014 when the other guys ran it was "30% returns" and generally anyone who claims over 20% is thought of a fraud until proven otherwise.

For example, My wife and I scored a 40% return in Nigeria at my mother in law's palm seedling operation. Pretty good huh? But that doesn't take into account that in 2013 we lost 100% of our investment due to Fulani cattle herders using guns to let their cows munch on everything in site.

But if I said "hey, invest here for 40% returns" I could be sitting in one of those cushy jails with an art therapy program now.

[Tarkan]

Yeah, a hedge fund with $300k in AUM would be pretty fucking pathetic by Community College standards. By Harvard standards, this is less than some of these kid's yearly trust fund endowment.

[Kurt]

Yeah, a hedge fund with $300k in AUM would be pretty fucking pathetic by Community College standards. By Harvard standards, this is less than some of these kid's yearly trust fund endowment.

And Harvard Lampoon actually got cash from National Lampoon using their name, both in Magazine form and in movie form. So that is a pretty good organization to name-drop and to declare yourself more exclusive that the Lampoon is pretty ballsy.

Also Hearst provided an endowment for them cuz William Randolph got his publishing knowledge from the Lampoon. That, plus whatever percentage they get every time the Xmas Vacation movie is played for using the Lampoon name.

I'd rather invest in the Lampoon.

[el3so]

lost 100% of our investment due to Fulani cattle herders using guns to let their cows munch on everything in site.

Emerging markets. Cup of coffee emoji.

More money in fleecing people than in trying to teach them not to get fleeced.

[Kurt]

lost 100% of our investment due to Fulani cattle herders using guns to let their cows munch on everything in site.

Emerging markets. Cup of coffee emoji.

More money in fleecing people than in trying to teach them not to get fleeced.

Yep.

At work part of our threat model is Computer Security Guys who set up a spear phishing operation while getting intel to see if anyone is on to them.

So I could maybe join an Investment Fraud Alert group. Be welcomed in and contribute to bringing down my competitors fraudsters. Get into from NYS Attorney General's office and contribute intel to them as well. All while working to have my own fraud operation go more smoothly.

[gnaruki]

If they survive to the open to accredited investors stage calling them for their pitch would be hilarious.