But once they determined the trace multipliers thye had come up with didn't work, they should have come clean right there and then. Not turned it from a failed venture into a fraudulent one.
Still, I feel like I could understand how a person could get into that situation. Imagine you have a company with investors, employees, facilities, everything. Your investors are pressuring you for results. There's a lot of pressure to get results, and you're failing to produce them, but you think your scientists might come up with a solution at any moment. You might be fooling yourself, but you have a lot of people counting on you, and if you can pull through it, you'll be filthy rich.
All you have to do is stall, and keep it all together long enough for your scientists to make your promises a reality. You expect it to be difficult, but everyone seems happy to look the other way. Your investors don't really care as long as their investments are growing in value. Your employees don't care as long as they get to keep their jobs. Keeping things going requires some secrecy, but everyone involved is just looking for an excuse to believe whatever your tell them.
After a while, you're too deep in. You started out just stalling, misleading people a little until you could figure out how to make it all legit. But that was months ago-- years ago now. You've already accidentally crossed the line into fraud a while back, without even realizing it at the time. Now you have no choice but to keep it all afloat and hope for a scientific breakthrough, or some other miracle,
I'm not saying that this is Holmes's story. I'm just saying that it's not hard to imagine how a relatively young and inexperiences person could fall into a situation like this. After all, they do say "fake it 'til you make it," and she might have been hoping that at some point, her company would "make it". Either way, it does seem like Vanity Fair is right to assign a fair amount of the blame on the Silicon Valley system. Somehow people invested massive amounts of money in a 19 year-old who was claiming to do something experts claimed wasn't possible, and they did so without doing due diligence?