Nobody should feel sorry for him, I was the CTO of Motionloft during the first two years of the company, and before he started stealing from the company (as far as we know). He is/was the most selfish and delusional person I've ever met. I hope he ends up in jail for a really long time.
Really? We have enough smart minded people that are responsible and willing to work hard. Why worry about rehabilitation for him? He doesn't deserve another shot at earning an investors trust... You must be kidding.
You realize you just called this guy delusional, and simultaneously you're saying you're qualified to decide who deserves another chance and who doesn't.
Additionally "faceofboe", whom I don't know who you are... the stock certificate I have that was issued by Jon himself has recently been verified by our attorneys to be fake and invalid. I'm not really sure what embezzlement I could have committed, As the CTO, I never had direct access to any of our funds, I didn't have a checking account, a bank card, or the ability to spend the companies money, I'd love for you to show some details of your claims.
I don't think it's a good idea for you to make these sort of statements either.
I didn't get "canned" first of all. I left because Chris and I believed Jon was stealing from the company, but he blocked me from raising my concerns up to our investors citing that it would breach my contract to make communications with anyone outside the company.
The original stock certificates I received from Jon in 2011 have turned out to be completely fraud. Can you please elaborate on how anyone besides Jon Mills embezzled funds from the company? Also who is this anyhow? You can just say your name.
I'm just going to support this opinion as I felt in a fairly similar way to the parent comment and I'm a little disappointed to see you down voted.
I don't see what benefit sending this guy to jail provides other than a simple avenue for enacting vengeance on someone who behaved poorly. Worst case, he should have to repay all of his debts and money he swindled. He'll take whatever lessons from his mistakes that he may.
So the worst case penalty for fraud is possibly having to give back what you stole? Given a non zero chance of not getting caught, that makes fraud a positive expected value course of action.
If society didn't exist, maybe. But in real, functioning societies, people care about their standing, and being seen as a fraudster is not a positive outcome. If "being seen as a fraud and outcast for life" is a possible outcome, people in normal societies don't give that risk zero value. So it doesn't always require actually imprisoning someone to deter behavior. Keeping someone locked up in a cage is a pretty extreme sanction, both expensive and odious and best reserved for really rare cases where there is no other alternative. Usually that means violent crimes with no reasonable prospect of releasing the perpetrator without recidivism, in which case imprisonment is a last resort to protect society—Breivik type cases. Beyond that, imprisoning someone is prima facie evidence of failure, a knee-jerk reaction to not being able to run a financial (or other) system properly.
This doesn't sound like it's just fraud, but full on mental delusional stuff. In that case throwing him in jail is probably not going to help matters by itself, and he needs doctors. Ideally some mix of the two.
I've known people like this, luckily that didn't get backed, and it can get incredibly messy. Things like maxing credit cards, identity changes, disappearing to foreign countries. It's better for everyone in the long run that this gets sorted properly as he'll just emerge from prison desperate to get back and will do something worse.
How does this case sound any different than, say, Bernie Madoff?
On the face of it, it sounds like a much more blatant fraud than Dennis Kozlowski, the former Tyco CEO who served about 8 years in prison, or Bernie Ebbers (what is it with guys named "Bernie"?), who is still serving a 25 year sentence for defrauding WorldCom investors.
People stealing money and behaving erratically when it collapses around them isn't evidence of mental illness. Maybe he's nuttier than a squirrel hole, but right now, I don't see any reason to assume he's not just a criminal.
Got to say, your Madoff comparison is annoyingly good.
One main difference is Madoff wasn't alone. He needed the help of a group in on the conspiracy over a long period of time. Combined with the overall magnitude and the regulatory failures I'm much more persuaded Madoff had criminal intent. This case sounds a lot like he was lying to absolutely everyone all the time (and especially to those closest to him), not that he was trying to orchestrate some group conspiracy to fleece outsiders of their cash. The whole story isn't out yet, so maybe there is more, but it sounds to me like he's one of those people that genuinely believes that if you act rich you become it.
Forgive me - I wasn't speaking in general terms about what I believe should happen to any individual who commits fraud, which I think your reply presupposes.
Fraud is a leading indicator of a bubble popping. Everyone with a vested interest in a strong startup economy should want to see this behavior punished harshly. It won't stop the air from going out of the balloon but we'll have a softer landing if we all behave ethically.
As low as it seems to those of you commenting, I'd love to see Jon Mills sit in jail and NEVER join society again. That would be fine with me. I spent years of my life building Motionloft, and it was thrown away but this selfish asshole.
There are a lot more interesting things to come with this case, this is only the beginning. His doctor isn't the only one he has scammed.
Mills was a first-time entrepreneur, but he had received backing from high-profile investors like Mark Cuban, and according to the Motionloft website, the company had secured clients like CVS, Saks Fifth Avenue, and Cushman & Wakefield.
Several former friends say Mills was also fun to be around and generous about inviting them to party with him at various music festivals and in places like Las Vegas.
All of which is why, when Mills started asking friends if they wanted to invest in his company, a few of them jumped at the opportunity.
They say Mills cashed checks that altogether were worth hundreds of thousands of dollars, promising them a small percentage of the company. Later, when he told them an acquisition was imminent, they felt confident they had made the right decision.
Mills is no longer part of Motionloft (Joyce Rietman is the CEO, effective December 1), and the validity of the investments his friends made while he was there is being called into question by earlier investors. As a result, after months of waiting, those friends now believe that not only was there no acquisition, but that it is possible they won’t get any of their money back. ...
... Sources say the private performance by Miguel, which cost $100,000, was never paid for. That was also true of the private jet charters, which included three separate flights into Vegas and four flights out, and cost nearly $100,000 altogether.
Justin Sullivan is the CEO of Private FLITE, the private jet service Mills used to charter the flights in November. He told me that Mills promised several days in a row he would pay for those flights by wire and later told Sullivan he would FedEx a check. Neither came.
After multiple attempts to reach Mills on the phone, Sullivan confronted Mills at his house to demand payment. Mills then wrote two checks for a total of nearly $294,000, but both bounced, Sullivan told me.
tl;dr – Guy gets credit from private aircraft company because of his connection to super rich baller. Aircraft company boss feels stupid and angry so puts up a protest site.
Verdict:
Guy is guilty of fraud if he had zero intention to pay. Which seems a bit of a stupid move. Having said that he seemed in self destruction mode from what I’ve read.
The Aircraft leasing employee who gave him credit is incompetent for issuing credit to that degree on his say so. His greed overtook his commercial sense.
I just hope we don't find out that the only reason the FBI got involved in this case is that Mark Cuban or another rich person called them in. The FBI is in danger of becoming the enforcers of the rich and powerful. They already act as Goldman Sach's volunteer corporate security dept: http://www.vanityfair.com/business/2013/09/michael-lewis-gol...
I just won a bet! Thanks! As predicted, the top post on an HN thread about the FBI arresting the fraudster behind Motionloft found a way to criticize law enforcement; here, because even though Motionloft seems self-evidently to be an enormous fraud, enforcement of the laws against fraud are merely a tool of the rich.
If you mean that he should have said Mills seems to be an enormous fraud, then yes. Which meets his larger point that of course the FBI should have called in, because there was still enormous fraud going on.
This fraud is "enormous" only compared with a bartender stealing cash out of a till. It is infinitesimally small in terms of what occurs on a very regular basis.
>enforcement of the laws against fraud are merely a tool of the rich
They often are, so it's not much of a bet that you've won here.
How did the "laws against fraud" worked in the 2008 financial crisis? I heard a trillion dollar bailout was awarded, because those greedy scamsters were "too big to fail".
One could also argue that "technically the didn't break the law". Which just proves the original argument. When you can abuse a system to get billions for your company, and then have the state get you out of trouble with public money unscratched (and you get to keep all your earnings), and that's not considered a fraud, then it's clear that "laws against fraud" ARE a tool of the rich, and have been designed so that their kind of crimes go unpunished.
I won a bet too! Thanks! As predicted a reply to my comment was arrogant, intentionally obtuse, written by someone who didn't carefully read the article, sets up a strawman about the FBI being "merely a tool of the rich" which no one claimed, and even falsely accuses the company itself of being an "enormous fraud"!
Truly a caricature of an HN comment.
As for the actual topic, of course I did not actually claim, or even imply, that the FBI is "merely a tool of the rich", but if you think the FBI has not many times served as a tool of the rich and powerful you are beyond ignorant.
Wait, you'd be fine with it if someone else called them in? Or you don't think the FBI should be available to anyone to report people like this? Just because someone is rich doesn't mean they lose police protection.
The FBI should not give special treatment to the rich or powerful. If you or I had called the FBI I suspect we'd have been told to file a civil action or contact the local police.
If you or I had called the FBI in the matter of $100s of thousands of dollars being fraudulently obtained we certainly wouldn't be redirected to the local police. Check section 7 http://www.fbi.gov/about-us/investigate
In the prior TechCrunch write-up, it was indicated in private correspondence that Cuban preferred to not go to the police to deal with the situation. So there went that straw man.
The only strawman here is the one you just created to shoot down. I'm not claiming to know what happened. I'm just pointing out a potentially suspicious aspect of this otherwise incredibly mundane story.
Supposedly Mark Cuban asked another investor to hold off on contacting the police while he personally investigated. Later, at some point, someone contacted the FBI. That's all we know. When the FBI takes on a completely trivial case and the victim is a billionaire I get suspicious. That is all I have said and all I believe.
Sad sad story. Feels very bubblish to me as well. I knew a couple of people who had, what could best be described as a meglomaniac breakdown kind of experience during the dot com explosion. The person I was closest too seemed to be so confused/mystified by what ever it was that got people multi-million dollar IPOs on no revenue or profits that they seem to have decided it was basically all acting, and they embraced full out meglo-mode. Big parties, lying about everything, pulling in as much money as they could as fast as they could and apparently just hoping that "somehow" the magic would happen and no one would care or something.
That person was at least 30% right about the dot-com boom afaict... plenty of people whose skills were precisely self-confidence and throwing parties made big profits, simply by not holding the bag when the music stopped playing. I'd hesitate to say it was the majority, but there are a lot! And many of them are today's VCs. :)
Or it could be outright fraud. I was a victim of a person who made big promises and I finally had to take them to a debt collector. My sympathy level for people who do this sort of thing is at a very low ebb.
Some people are taking the extravagant behavior as sign that he's mentally ill.
But, as you are probably aware, the extravagant behavior could be a cold deliberate move, an attempt to get people to give him money. "Look, I'm a rising star, I'm rich, hook yourself up to me." Lots of con artists flash money to get people to trust them.
I think the best thing here is to let a court of law determine this. Either way, a lot of people got hurt. There has to be some level of culpability for committing a crime.
Everything about the situation is sad in my opinion.
It's sad that gullible people invested blindly/stupidly. It's sad that this guy clearly has(at the very least) sociopathic tendencies that weren't discovered by his peers until the damage was done. And in a way it's sad that he probably won't receive the help that would best facilitate his rehabilitation.
Do I feel worse for the people who lost their money than the guy who lied/stole/cheated them out of it? Of course. Fuck him. But I still think his situation is a sad one in the same way I would think a heroin dealers situation was.
For those of you wanting to see this guy go away for a long time, you are most likely going to be disappointed. It sounds like he stole less than $1 million and will be charged with mail or wire fraud. He will be released on bail, will plead this out a year or so from now, and will be sentenced to somewhere between 18 and 36 months in a minimum security federal prison. He may get a little less than that if he can convince the prosecutor that his conduct was the result of a drug or gambling addiction (my guess is gambling was an issue here).
He will have a chance to redeem himself in the not-so-distant future. Hopefully he will capitalize on it.
Why should we want to see him go away for a long time? We shouldn't. This idea of "we got to put this person away for decades" is one of the few areas where I find the European belief (in rehabilitation) to be better (I'm American).
18-36 months, in addition to the fact that he will have a felony on his record for probably the rest of his life, in addition to the fact that his public online reputation is destroyed forever, is appropriate.
I'm sure I'm suppose to know who the other guy in the picture is (I don't), but when you feature a person in an article and then show two people in the lead photo... you really should give that photo a caption so we know who was arrested and who has nothing to do with the story.
I doubt very much that Cuban was the one reaching out to the FBI. In situations like this, the "rich & powerful" often use their power and influence to sweep things under the rug, avoiding scandal and the shame of being a dupe to a grifter.
More likely, someone with half a brain on the BOD or within the co. realized everyone was going to be super-screwed really soon, and better to be in front of the wave doing the right thing. Sure, Cuban's involvement may have accelerated the process (people are human, fame has an impact) but I suspect something like this would have happened regardless (might not be featured on YC news with a cast of nobodys)
How do these people think they can get away with this sort of thing? Are they just completely delusional, or does this kind of outright fraud sometimes work out for them?
Every industry has it's charlatans. If you invest, do you due diligence even it concerns a friend you're investing in. It's just business, not personal as they say.
