When dumb things happen to (supposedly) smart people

Just in case you were wondering whether NY AG Letitia James was focusing too much of her time on Trump's crimes and not enough on every other criminal person and enterprise in her state, there's the heartening news that Vladimir Artamonov, a gradutate of both Wharton (undergrad) and Harvard Business School (MBA) had conned fellow HBS grads out of nearly $3M by getting them to invest with him in what turned out to be a Ponzi scheme.

James’ office said it had secured a court order  blocking the grad, Vladimir Artamonov, “from harming investors through his fraudulent scheme.” Artamonov allegedly projected returns of 500% to 1,000% by claiming to learn which investments Berkshire Hathaway planned to make. (Source: CNBC)

Having been suckered in by a phone scam spoofing the support number of my bank, I know that (supposedly) smart people can get conned. Fortunately in my case, I smartened up from my fugue state dumbness and didn't lose a penny of the thousand bucks I could have been out. 

But even though I don't have the supremo credentials of an MBA from Harvard and an undergrad degree from Wharton, I think I would have smelled something of a rat if someone promised returns of 500% to 1000%.

Come on!

Returns of 500% to 1000%? Even Bernie Madoff was "only" promising returns of 20%, which was crazy enough - yet reasonable enough sounding to have people thinking it was within the realm of possibility.

So if you had an MBA from HBS, wouldn't your first response to an order-of-magnitude more than general crazy outlandish offer be a) this is true good to be true, and/or b) just how is Artamonov learning about those Berkshire Hathaway investments, other than through insider info, which would have been a big NO NO.

Of course, Artamonov claimed he was just being really smart.

The [AG]s] office said “Artamonov lured clients by claiming that he could learn which investments Berkshire Hathaway would make ahead of the market by examining public state insurance filings.”

And no one had figured this out earlier? Big 'duh' here.

“Artamonov boasted to his investors that it is like ‘having a private time machine’ and ‘getting tomorrow’s newspaper today,‘” as he projected massive investment returns, James’ office said.

Private time machine? Sure, back to the days of Bernie Madoff, only with better returns. 

Anyway, there were a couple of red flags waving right there in front of their faces, yet some pretty smart people - or at least well-educated people - gave Artamonov $100K to buy in to his crazy fund? (Artamonov conned $2.9M out of 29 investors, most of them from people in his wide friend-of-a-friend HBS network.)

It's no surprise that Artmonov did more than just Ponzi it up with investor money, more than just pay off those who had gotten in on the groundfloor with the investment money of those who came in later. 

“Artamonov also used his investors’ money to fund unauthorized personal expenses for vacations, shopping, and dining,” the office said.

Of course! Why run a Ponzi scheme if you can't get in on the spoils.   

Hopefully, since Vlad the Alumni Impaler was screwing over fellow HBS grads, most of them had enough wealth to withstand the loss of $100K. Sure, they lost face, but at least they could afford the out of pocket. But sadly:

James’ office said it learned of the fraud when it was told about an investor who ended his own life after discovering he had lost $100,000 in Artamonov’s alleged scheme.

But suicide schmuicide: 

Even after the man’s suicide, Artamonov continued soliciting new investors, lying to them about the fund’s strategy and performance, James’ office said in a statement.

Even after the man's suicide... 

Vladimir Artamonov. What. A. Bum. 

He sure outsmarted himself, though, and is going to be finding himself in a pretty big FAFO situation.