Friend's a fraud. Freak out or fly on?

September 6, 2012 4:30 PM

A formerly close friend (with some family ties) is building a career as a seminar leader by misrepresenting himself as a business success and giving paid seminars supported by a local government agency. Should I care?

I've known this fellow for 15+ years: a genuinely decent person in a lot of ways, but tremendously entitled and flighty in others. And, in the course of those 15+ years, I've seen failures in day trading, gold investing, landlording, opening a car wash, starting a renovation company, buying and selling real estate, etc. All buoyed by a lot of family money that has ensured a freedom from any real consequence, but money that's just now starting to dry up. Most of these ventures have fizzled out, some have been kind of disasters (having to sell off the car wash before the bank seized it, getting into legal trouble over some dicey real estate deals, serial flirtation with bankruptcy, etc.) The latest venture was "business consultant," which I sort of shrugged off.

My wife, however, is hoping to open her own small business, and has started looking into local government support programs. To my surprise, they've started sending her invitations to seminars they're "sponsoring," costing non-trivial amounts of money, hosted by... my friend.

The bio being presented is that of somebody with thousands of hours of business experience (arguably true), who has created and run three wildly successful small businesses in the region over the past decade (terrifically false). Dozens of participants are paying in aggregate thousands of dollars on these, thanks (I'm guessing) the implicit stamp of approval that this government organization brings with it.

I am fantastically conflicted. This is somebody I consider a friend, albeit closer in the past than today, and with some family ties that I'd hate to break. I like his wife and kids a lot. But he's also a fabulist, and has an ironclad belief that he is destined for hand-over-fist amazing financial success – the qualities that have kind of cooled our friendship over the years.

I don't wish him harm. I'm happy, I guess, that he's found some sort of work that won't land him in jail or worse. He's run out of rope with family cash to keep failing consequence-free.

But I also feel that he's misrepresenting himself at best, flat-out lying at worst, and that he's doing active harm to both this well-meaning organization and the participants to these seminars by selling them all a bill of goods.

I also -- and this is my problem, I know -- hate confrontation. I'd hate to lose contact with other members of his family because this blows up, and if I confront him about this, it will blow up.

I also know some people that work for this government body, but in a different department, quite well. It wouldn't be hard to have a quiet word about my concerns and be fairly sure of confidentiality.

Do I shut up and carry on, and trust that the people running this government agency will eventually cotton to the fact that they're being peddled bullshit? Do I accept the fact that 99.9% of all "seminar speakers" are probably as poorly qualified as my friend and move on with my life? Do I confront him, knowing that this will just result in a broken friendship, lost ties with other people I like a lot, and endless drama among our circle of shared friends?

Your thoughts, hivemind?

posted by anonymous to Human Relations (25 answers total)

If he is running out of family cash and has kids to support then he can get a job like everyone else. Running out of family money and having kids to support is not a justification for scamming people and IMO it is not mean or cruel of you in any way to thwart him from doing that. I think the best thing here would absolutely be to give that quiet word (backed up by showing them or linking them to the facts) to the people you know in the governmental body.
posted by cairdeas at 4:34 PM on September 6, 2012 [4 favorites]

I don't see why you wouldn't just quietly mention this to your connections at the government body, or at the very least figure out how to submit an anonymous tip. If he's lying about his qualifications, then he hasn't really earned the right to demand people be up front with him. If you need an internet stranger's permission to report him, then you have my permission.
posted by Narrative Priorities at 4:35 PM on September 6, 2012 [8 favorites]

If it were me, I would have a quiet word with your friends in the other department of the government body. Assuming you can trust them not to reveal their source. Basically just to get someone to say "what wildly successful businesses does this guy run?". Then leave it at that.
posted by Joh at 4:35 PM on September 6, 2012 [2 favorites]

What makes you think he's scamming people? You agree that he does actually have all this experience doing the things he's claimed to have done. Do you not believe that he has learned any lessons from his failures that other people can't benefit from?

Personally, I'd be hesitant to characterize anyone else as a financial failure, if I haven't seen the books to their businesses. Not to mention that he's apparently got a successful speaking career so he's not entirely useless?

Here's the other thing to consider. Almost all business-type speakers do it because it's easy work that gets them paid. If they were stupendously successful in their primary area of expertise (doing, not lecturing), they wouldn't be giving seminars. So I don't really see him as being a poor example of a speaker, since I think they're all roughly at the same level of usefulness (i.e., I wouldn't trust my money to a financial advisor who still has to work).

So tell on him if you want, but consider whether or not your feelings about this are really of a more personal nature than you're currently recognizing. And also consider your reputation with the people you tell, and how you'd come across.
posted by danny the boy at 4:41 PM on September 6, 2012 [18 favorites]

I know plenty of very good coaches who cannot play the game worth a lick. Negative experience can be a great lesson too. If his seminars are not worth the money, after a few, the word will get out.
posted by JohnnyGunn at 4:50 PM on September 6, 2012 [11 favorites]

What makes you think he's scamming people? ... Do you not believe that he has learned any lessons from his failures that other people can't benefit from?

He's scamming people by presenting his seminar as something it isn't - a seminar led by someone "who has created and run three wildly successful small businesses in the region over the past decade (terrifically false)."

He very may well have learned something about his failures and there may be something valuable in that for other people. If so, he should present his seminar that way: the opportunity to learn from the failures of a someone who has never created a successful business. And you know, he might even get people to sign up. But it's fraudulent to do things the way he is doing them.
posted by cairdeas at 4:52 PM on September 6, 2012 [5 favorites]

I would stay out of it. Suppose you say something, it impacts on him financially, he sues for defamation. He might lose, but do you want the expense of defending yourself?
posted by HuronBob at 4:56 PM on September 6, 2012

What's unethical here is the government recommendation and imprimatur, not anything your friend is doing, which is an exercise in caveat emptor.
posted by Cool Papa Bell at 5:00 PM on September 6, 2012 [3 favorites]

Not to belabor this but "thousands of dollars in aggregate"? That's some serious chump change. So let's say that's what a hundred? A couple hundred per participant? To get to hear someone who explicitly has experience starting and running multiple small business, in exactly the location and under the laws those participants would also be facing?

That... doesn't really sound like a scam to me.

And are you sure that bio claims he was wildly successful? Or are you projecting your own bias in thinking that he shouldn't under any circumstance be in a position to tell others what to do?

Also, I'm kind of suspicious that your local government agency wouldn't have done the barest of due diligence on this guy. Like, there are at the very least easily accessible public records of sale and all the bankruptcies you're saying happened. That's what makes me think you're blowing this out of proportion.
posted by danny the boy at 5:04 PM on September 6, 2012 [4 favorites]

It sounds like you're saying the local government agencies are actually sending the invitations, so I don't understand the scare quotes around their sponsorship. If someone's lying about the connection, I guess that could make me change my opinion.

But my assumption is that people running business/investment/leadership seminars constitute a scummy subculture loaded with self-important bullshit artists with vastly inflated resumes, and your friend's way of presenting himself is just par for the course.

I mean, the only way this could be more stereotypical is if he secretly lived in a van down by the river.
posted by Monsieur Caution at 5:11 PM on September 6, 2012 [3 favorites]

I am fantastically conflicted.

I think I get what your concerns are, and I agree with them to some extent based on what you've written here. (Obviously I have to take your word as to the facts.) My only advice would be that Iit does seem you're overreacting a bit. I agree with you that there is a decision to be made and I do understand being conflicted about it, but "fantastically conflicted" sounds too invested.

Yes, I think there is something to the notion that 99 percent of speakers are embellishing (to be charitable) their qualifications. I agree with you that it makes a difference whether a person has created three successful businesses or crashed three spectacular failures. It is lying. No doubt people are buying his program who wouldn't if they knew his real experiences. But on the other hand, there's truth to the old saw about learning more from failure than from success, and it doesn't sound like you know exactly what this person is teaching/telling his customers.

I don't have advice for you in one direction or the other. It's reasonable to shrug, and it's reasonable to have a quick, quiet word with your friends in the government. Neither seems wrong based on what you've told us. My advice is that, from the perspective of someone who agrees with you that it's a tough spot to be in, it nonetheless doesn't seem like all that tough a spot to be in. Maybe put this decision away for a week and then come back to it, and see how you feel.
posted by cribcage at 5:32 PM on September 6, 2012 [1 favorite]

I would mention my perspective to the people I knew who might bring them to the attention of the people who make decisions about whether or not to invite this guy. Then I'd let it go.

I'd like to know if someone I was hiring to provide a service was actively misrepresenting themselves in order to get the gig.
posted by Sidhedevil at 5:43 PM on September 6, 2012 [3 favorites]

I would have to ask, does he believe himself as successful?

You have a perspective he does not. He has a nearly bottomless bailout and may not even realize it. That doesn't make him any better, but it might make him at least not an outright liar.

That said, it sounds like people legitimately hoping to get some good advice pay a lot of money to listen to this 20-time loser speak, and that does present something of an ethical dilemma, regardless of whether or not he believes his BS.

Mostly, I would say that you have no way to handle this that won't end up hurting you in some way (you may even wind up on the wrong end of a defamation suit). And you also likely have no way to really "fix" the situation such that he goes back to wasting family money rather than taxpayer dollars.

So, best outcome? Warn as many people as possible in person about his BS, but don't take it any further than that. No good will come of it.
posted by pla at 5:43 PM on September 6, 2012 [1 favorite]

Based upon what you've told us you have no reason to step into this. IMO; YMMV. If he were dramatically hurting people, teaching CPR using fairy dust and anchovy juice, then it'd be time to tell your friends on the inside. But ... As it is, it's just another flippin' meeting, and anyone who is going to *pay* to go to a damn business meeting maybe deserves what they get.

And as pointed out by many above, most people in that hot air business blow lots of smoke to make the hot air look more substantial I guess. Plus it is absolutely possible that he's providing good information -- even a blind squirrel finds some nuts, even a stopped clock is right twice a day, and if he's telling them what time it is on those two times, or sharing with others the few nuts he's been able to find, hey, all's well.

They'll run him off soon enough if they don't like what he's giving them. He's scared and he's trying to get food for his family to eat, same as everyone else is. Let him be.
posted by dancestoblue at 5:48 PM on September 6, 2012 [1 favorite]

If he is explicitly saying his previous business were sucessful (let alone 'extremely' sucessful!), that's fraudulent, and selling his expertise AS A SUCCESS is lying to seminar participants --- so yes, the quiet word to your governmental friends would be best, with any information you happen to have about those businesses (business names and addresses, dates of operation, reasons for closing, etc.).

I understand what JohnnyGunn is saying about how, if the seminars aren't worth the money, the word will eventually get out; the problem is that in the meantime, a lot of people could be scammed out of those seminar fees.
posted by easily confused at 5:59 PM on September 6, 2012 [2 favorites]

IANA DA, but fraud?
It's hard to imagine a fraud prosecution of someone who claims past success in running a business, whatever it's eventual fate.
What defines success? A bayou bait shack still standing after Katrina, or even one that went thru bankruptcy, was successful by some standards. If the guy is giving specifically false info, that's one thing, but I suspect his seminars are more platitudes and advice.
And that's global. Giving seminars on how to turn a profit in a business is a lot easier than actually turning a profit in a business.
posted by LonnieK at 7:08 PM on September 6, 2012 [1 favorite]

its
I'm an editor, fer chrissakes.
posted by LonnieK at 7:09 PM on September 6, 2012 [1 favorite]

If you report him to your friends in government, what exactly do you imagine happening? Whatever it is, are you sure it's going to play out that way? It may be satisfying to think your report will inevitably set the wheels of justice turning, but it's just as likely that you will come off as a crank with grudge.
posted by Wordwoman at 7:14 PM on September 6, 2012

You didn't say which government agency was recommending the seminar, but I'll share this with you.

When you approach the SBA for business assistance, they don't really want to talk to you unless you have tried and failed at opening at least one business. They know that failure in business will take the pie in the sky stars out of your eyes quicker than anything else, and give you real business experience. It is the trial by fire.

If the businesses he opened closed in a week, I can understand your concern. If he kept them going longer than 90 days, they were successes. How are you defining success? Thirty years?

You mentioned that he sold the car wash before the bank took it, and that he "flirts" with bankruptcy. The difference between "flirting" with bankruptcy and filing bankruptcy is the same as the difference between "accused" and "convicted."

This is not the clear moral victory you want here, but there's probably a wealth of information he can present about what NOT to do, and that's probably the basis of the seminar. I would imagine they have reviewed his experience and his presentation, and would not associate themselves or recommend it unless they thought it would be valuable to new business owners.

If you cannot resolve your inner conflict with the moral ambiguity here, I'd say skip it altogether. If you do decide to participate in the seminar, pay with AMEX so that you can have some recourse if you feel you have been defrauded.
posted by halfbuckaroo at 7:14 PM on September 6, 2012 [5 favorites]

with a grudge, that is
posted by Wordwoman at 7:20 PM on September 6, 2012

Speak up. Somehow that will minimize blow-back.

Yes, this is wrong. Speak up in a way that minimizes your involvement but gets the facts across.



As a small business owner I do not have time or money for this, nor does anyone else who is serious about growing success.
posted by jbenben at 1:42 AM on September 7, 2012

halfbuckaroo : If the businesses he opened closed in a week, I can understand your concern. If he kept them going longer than 90 days, they were successes. How are you defining success? Thirty years?

I get your intent here, but for the purpose of the AskMe as posed, I have to disagree about "90 days". A business counts as successful when it becomes more than self sustaining. External conditions may well doom it eventually, but yeah, most people mean a time measured in years, not days when they hear the word "successful business". And they don't mean "a failed attempt that cost more than it ever made"

I would also add the qualifier that it doesn't really mean much to say you've "run a business" until that business has employees and assets other than yourself. Case in point, I've technically kept a "business" of my own up and running for over 20 years now; even shown a net profit in the tens of thousands of dollars over that period. But, it has no overhead, no employees, no expenses other than up-front hardware costs, and I work a 9-to-5 to pay my "real" bills. I can effectively sustain my "successful" business under that same model until the day I die, for whatever that means.

Of course, at some point, this degrades into a "no true Scotsman" argument. I think, though, we can safely consider crazy Uncle Ted and his monthly Next Big Idea(tm) pretty much the diametric opposite of a "successful businessman". And from the way the Asker phrased things, it sounds more like we have Uncle Ted here than a legitimate "learned from failure" entrepreneur.
posted by pla at 3:46 AM on September 7, 2012 [1 favorite]

Stay out of it. Plenty of people misrepresent themselves; it may be deliberate or it may be honest lack of self-awareness, but either way, it is none of your business. None of us are perfect, and all of us try to make a living the best way we know how.
posted by languagehat at 6:22 AM on September 7, 2012

I'd stay out of it. First, you can't define "failure" or "success." If you're able to open a small business from scratch with minimal investment and get by for a few years, even if it closes down, it still something of a success. I'll let you in on a secret, most speakers bios are a bit fluffed up, the same way you might fluff up a resume. The guys who have figured out how to make 20% on an investment aren't quitting that to tell you how to do it at a $300 seminar, they're too busy making money hand over fist to be bothered.

Also, the idea that if you failed a few times your opinion is worthless is a bit much. This guy's experiences are actually very valuable in a way. When I started landlording I would have loved to sit down with a landlord for an hour, even if he quit landlording.

I'd chalk this up to the everyday bullshit of business culture. Even if you get him fired they'll find a similar jackass to take over. You also don't know his rate. The government agency or the association or whomever might be taking 90% of that cut and giving him a modest speaker fee. Don't assume that he's going to pocket the gross from those tickets and he's conning honest rubes who just want to start a farm or something.
posted by damn dirty ape at 7:16 AM on September 7, 2012

I'd like to cast a strong vote in favor of sharing what you know with the people you know.

I disagree with the people who say "all speakers do it, so why bother?" When I consider going to a seminar, I assume that the speakers are representing their experience accurately.

I think information asymetry is a real problem, and you have an opportunity to provide information that will help the potential seminar participants make better decisions.

Would the people paying for the seminar care about the differences between how he's presenting himself and what actually happened? Would they care about the consequences suffered by the other people involved in his failed transactions - the employees of the car wash, the tenants he rented to, the people who sued him?

If you think they would care (and I definitely think they would care), please do let others know that he's misrepresenting himself.
posted by kristi at 12:30 PM on September 8, 2012 [2 favorites]