Tech is the con artists’ new magic wand

bit2Big > Africa News > Tech is the con artists’ new magic wand

The world’s favourite binge-watching portal, Netflix, has simultaneously mesmerised and shocked the world with the tales of The Tinder Swindler. The documentary features the victims of a con artist called Simon Leviev, born Shimon Hayut, who lured them through a dating app, Tinder, to dreams of romance and a lavish lifestyle. 

His linked Instagram account showcased him leading a glamorous, stylish and globetrotting lifestyle. His love-bombing arsenal included red roses, whisking women off to exotic locations on a private jet, endless sushi and using message apps for a bombardment of “I love you’s”. 

He would spend time and money to create a romantic attachment or friendship and a promise of life-long devotion. Eventually, he staged a traumatic event and alleged that he urgently needs cash to get away from his so-called enemies who are linked to the diamond industry he allegedly was involved in through family connections. 

He would then resort to drama, pressure and manipulation to compel the women to send him money and provide him access to credit cards and loans. According to Netflix, he gained access to $10-million through this romantic con from 2017 to 2019. He spent only five months in jail for his crimes and is again posting his lavish lifestyle on social media. Tinder confirmed that he, and his alias accounts, have been banned from the app. 

Real-life Netflix

He is not alone, according to the FBI, Americans lost $1-billion in 2021 to romantic scammers and con-artists that focus on women above 40, as well as older and disabled people. They predominantly use technology for their cons, quite often not meeting their victims in person, or only for brief initial first dates, which then moved to messaging apps. 

This romance lasts on average between six and eight months. Eventually, the pleas for money would start, based on some fictitious crisis or urgency, quite often to release a gift for the victim from customs. Then the con artist would disappear, disconnected from the very technology that fueled the romance or by “blocking” the victim, the passive-aggressive response of our time. 

Moving away from “rom-cons” to corporate con-artists, Elizabeth Holmes, founder of the now-defunct biotechnology company Theranos, showed that companies and investors could be conned as well. She used the fear of missing out on the next tech unicorn (a privately held start-up company valued at $1-billion or more) in Silicon Valley and the need for more efficient and (relatively) painless blood testing as the focus of her fraudulent activities. 

Her reign also capitalised on the feverish search for an extremely successful, female-led tech start-up. She started Theranos as a 19-year-old college drop-out in 2003 and built the company on promises and fraud to its peak of $10-billion valuation in 2014. She raised about $700-million from private investors and venture capitalists, such as the Walton family (owners of the Walmart group), Rupert Murdoch (media tycoon whose newspaper, The Wall Street Journal, eventually exposed Theranos) and Betsy DeVos (who served as former US president Donald Trump’s secretary of education). 

The American company Walgreens, which operates large pharmacy style stores, went into agreement with Theranos to provide in-store blood testing at 40 locations, leading to numerous allegations of false positives and negatives in blood tests by doctors and patients. Through the accumulation of red flags and whistleblowers the medical investigative journalist of The Wall Street Journal, John Carreyrou, led the investigation into, and eventual exposure of, Holmes and Theranos as a company in 2015.  

The various Theranos technologies were fundamentally flawed and Holmes used the appeal to proprietary information and “tech-babble” as a shield between her con and the truth. In January 2022 Holmes was found guilty of fraud but is still to be sentenced. 

Another near-legitimised group of con artists are the stars of the “Fake Guru” industry using “hustle culture” and “toxic positivity” for maximum effect. They promise wealth and fame for a prize, posing in front of sports cars and mansions on social media. They offer online material and e-learning courses on financial management, wealth, business creation, investment, relationships and self-help. They excel in offering masterclasses, often starting with a free event and giving the attendees only minutes to spend money on a limited-time offer of a masterclass. This leads to even more special and limited-time offers of even more classes and courses. 

Apart from the sense of urgency, they use numbers and key terminology to create a sense of novelty, such as “7 Ways to Invest in NFTs Today”. But, quite often, the only business or industry these alleged fake gurus have ever succeeded in is offering these limited time only courses and masterclasses. Increasingly, long revered masters of the self-help industry are included in the collective of fake gurus. 

In turn, technology is used to expose the doings of these fake gurus, with YouTube channels such as Coffeezilla and Mike Winnet’s “Contrepreneur Bingo” series. Victims of these fake gurus are interviewed on these and other channels relating their stories of how they have spent thousands of US dollars on these masterclasses, which is quite often of low-quality or advice one can get for free on the internet. 

A subset of these fake gurus is “Crypto Bros” who uses technology to lure people into various (often fake) schemes to invest in cryptocurrency and more recently in NFTs (non-fungible tokens, which are unique digital pictures, writings, videos and audio which are traded and protected via blockchain). 

The so-called “influencers”, people with a high amount of followers on social media platforms, such as TikTok, YouTube and Instagram, have also joined the realm of creating cons, ranging from fake diet and fitness advice and supplements, which are either never received or of low quality. Some of these so-called, and often self-labelled “influencers” have been charged and found guilty, but there are still many others posting on social media every day, spreading false information and defrauding their fans. 

Then there is the so-called “hunbot”, the woman you remembered vaguely from school, who suddenly befriends you on social media and slides into your DM. She calls you “hun” and spams you with invites to either join her multi-level marketing endeavour as her “downline” and become a fierce girl-boss or at least buy whatever product she is selling. Recently there has been a growth in social media channels, accounts and podcasts that have popped up to expose the tactics of these “MLM-hunbots”, such as “Not The Good Girl” on YouTube. 

Many of these companies, which are even household names in South Africa, have had to pay fines by the Federal Trade Commission of the US for fraudulent claims and activities, although they are most adamant that they are not pyramid schemes. Due to personal financial hardships brought on by the government and corporate reaction to the coronavirus, the internet has been the vehicle for unprecedented growth in MLMs, which subsequently became a $35.2-billion industry. The US’s Federal Trade Commission (FTC) found that 99% of multi-level marketing sellers lose money.

Deepfake imposters

We have had these grifters, con artists, imposters, tricksters, swindlers and snake-oil salespeople with us as long as humanity existed and technology is, and increasingly will be, their tool, their magic wand, which they will wave to mesmerise us into victimhood. As easy as it is to label them as chancers, psychopaths, criminals and immoral outsiders; they are victims as well. Victims of a global society that craves novelty, fame, fortune and who is always made to feel to strive, to hustle and that they are never good enough. 

As technology, such as blockchain and quantum computing, becomes even murkier for mere mortals to understand, as well as technology such as “deepfake” (fake videos of people, such as presidents and celebrities) becoming more difficult to detect; we are entering an epoch of unbridled opportunity for con-artists. 

The only way through is knowledge: knowledge of how technology works and not accepting limited time offers that seem too good to be true. Knowledge and understanding that technology has always been, and will always be a tool. It could be a tool used for good, but if it could be abused or used in a con, it will be. From hacking to exposing fake news, fake gurus, fake romantic partners and fake influencers, the remedy will always be a step behind the perpetrator. 

Without becoming negative and missing out on real opportunities, we will have to become custodians of our own trust, commit to rigorous due diligence practices, always use critical and systems thinking and apply a great measure of doubt. We will have to manage our lives, hearts, companies and technologies with a responsibility to ourselves, our families, our investors, our staff, the community and the environment. 

The University of Stellenbosch Business School will be offering a specialist stream in Managing New Technologies in the post-graduate diploma in Futures Studies from 2023. More information will be available on the website: https://www.usb.ac.za/


Bit2big offers global digital finance solutions based on blockchain, cryptocurrency investments and blockchain services.

With a presence in Switzerland, Nigeria, Rwanda and Uganda we are driving the adoption of blockchain technologies in the east and west Africa.

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