Criminal Deception in Silicon Valley - Schneier on Security
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Criminal Deception in Silicon Valley
Interesting paper:
Abstract: With entrepreneurial fraud cases on the rise, we investigate how entrepreneurs carry out criminal deception, employing deceptive means to defraud audiences. Analyzing court data from Silicon Valley ventures and their founders prosecuted for fraud between 2000 and 2023, our findings reveal that entrepreneurs carry out criminal deception through a process of façading: Entrepreneurs construct, perform, and protect illusory appearances (façades) that externally project high-growth performance to audiences while masking ventures’ actual underperformance. We identify three forms of façading—surface, reinforced, and deep façading—that are contingent on the severity of the gap that entrepreneurs face between audiences’ performance expectations and ventures’ performance reality. Our theoretical framework captures how entrepreneurs facing minor, wide, and extreme expectation-reality gaps engage in evermore sophisticated efforts to detach the venture’s externally projected appearance from its actual operational reality. Practically, we propose several approaches to deter and detect criminal deception, including the extension of U.S. Securities and Exchange Commission surveillance and whistleblower program, investor due diligence reform, and dedicated entrepreneurship education interventions that clearly demarcate when entrepreneurs transgress into criminal deception. We make contributions to literatures on cultural entrepreneurship, organizational wrongdoing, and the social effects of entrepreneurship.
Tags: academic papers, crime, deception
Posted on August 24, 2026 at 6:38 AM •<br>0 Comments
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About Bruce Schneier<br>I am a public-interest technologist, working at the intersection of security, technology, and people. I've been writing about security issues on my blog since 2004, and in my monthly newsletter since 1998. I'm a fellow and lecturer at Harvard's Kennedy School, a board member of EFF, and the Chief of Security Architecture at Inrupt, Inc. This personal website expresses the opinions of none of those organizations.
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