In the last few years, in addition to COVID-19, the ethics world has witnessed another kind of outbreak. I call it “Star Struck Stupidity,” but you can feel free to call it fraud.
Whether we’re talking about sports figures, actors, Reality TV characters or those who have attached themselves to charismatic individuals such as Elizabeth Holmes of Theranos, good people have invested – and lost, their life’s savings simply because they were blinded by celebrity.
The latest in this series of star struck stupidity has taken place in India. Why would I write about India today, because a woman invested her savings in a planned luxury apartment building presumably endorsed and part-financed by tennis star Maria Sharapova (a Russian citizen who has lived in the U.S. since 1994) and Michael Schumacher, perhaps the most successful Formula 1 racer in the history of the sport. They, along with 11 other wealthy individuals, have been booked for fraud.
The FIR
The FIR or the First Information Report is a document prepared by the police when those who believe they have been victims of fraud go to law enforcement and fill out a formal complaint.
The 11 have been booked for fraud and criminal conspiracy in regard to the apartment construction project. In the victim’s complaint she specifically stated that “she booked an apartment in a project named after Sharapova and in that project, a tower was named after Schumacher.”
The complaint alleges the project was supposed to be completed by 2016. It was never built. The victim accused the celebrities (who promoted their involvement) of having knowledge of the fraud.
Said the complaint:
“We came to know about the project through advertisements and reached out to the company management after pictures of the project and a lot of false promises were made.”
The complaint continued:
“It was mentioned in the brochure that she (Sharapova) is promoting the project, and she also made false promises, had dinner parties with the buyers, and all this was done for the project, which never took off.”
The complaint does not state how much money was lost. Part of the reason the victim decided to invest in the property was that Sharapova promised she was going to build a tennis equipment store and tennis training facility on the property. This was obviously never done.
Star Struck
As an ethics speaker and ethics consultant, I have become increasingly alarmed at the amount of fraud that has been taking place because otherwise reasonable investors are drawn into schemes for no other reason than “personalities” have attached their name to a project.
I mentioned Elizabeth Holmes of Theranos above. She initially stocked her board of directors with people such as Henry Kissinger and George Shultz, two individuals who were brilliant in their time but clueless in regard to biotechnology. Nevertheless, the presence helped Theranos defraud more than $700 million from investors.
Sharapova and Schumacher lent their name to the project however, they quickly moved on to other pastures leaving investors in a lurch for the past five years. The fact that this fraud occurred in India is only emblematic that this type of bait is seemingly used everywhere with good results.
In the world of fraud, “the bait” can be used to simply complicate and deceive. The fraudsters can rationalize the activity any way they choose. My guess is that when all is said and done Sharapova and Schumacher will claim they walked away because they did not endorse the other investors – or, that they never made the promises claimed. It is a difficult assertion for Sharapova as she invited the giddy investors to lunch.
Fraud has many faces. In this case, no face would have been as powerful as a legal prospectus, solid plan and an iron-clad contract.
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