According to federal prosecutors, Grossman promised his nascent South Florida-based tech firm, Dragon-Click, was going to revolutionize the way people shopped online. He allegedly told one of his money backers that one day, people would no longer be saying, “just Google it,” but instead, “just Dragon-Click it.”
One investor, a 78-year-old retired lumber industry executive residing in Temple, Texas, named Ronald Nedry, threw $271,000 at Dragon-Click during a two-year period beginning in 2015. Grossman, whose company was based from his home in the affluent Broward County suburb Parkland, allegedly told Nedry his funds would be used to cover costs for developing Dragon-Click’s technology and securing patents.
In a recent phone interview, Nedry said Grossman pitched him on a concept that sounded simple enough: a web application that allowed users to click on a picture of something and instantly find websites that sell the product. After making an initial investment of $62,500 for 2,500 shares of Dragon-Click stock, Nedry said, Grossman would call and text him with updates while hitting him up for more cash.
“He last texted me that he had half-a-million dollars headed my way, but that he just needed $5,000 to complete a transaction,” Nedry said. “It was all BS.
Nedry isn’t the only person who feels that way.
According to a bevy of federal civil and criminal allegations against him, Grossman turned out to be more like a low-level version of Jordan Belfort, the infamous penny stock scammer of The Wolf of Wall Street. Last month, he was indicted on criminal charges of wire fraud, mail fraud, money laundering, and related conspiracies—a year after a U.S. Securities and Exchange Commission probe said the Brooklyn native siphoned approximately $1.3 million from Dragon-Click’s corporate accounts to pay for a lavish lifestyle.
At a time when the wealth promised by tech startups and apps are inescapable, experts said, the case showed how scammers might prey on a historically inviting target—seniors looking to pad their life savings—by hitching onto brands they could paint as the next Airbnb or Uber.
Grossman was arrested on October 11 and is currently locked up in Broward County Jail unless he can come up with a $250,000 bond. His federal public defenders did not respond to phone messages and emails requesting comment. Grossman, who pleaded not guilty, is scheduled for trial on November 25, and faces a maximum of 20 years on the most serious charges if convicted.
If nothing else, it certainly seemed like Grossman was going through a research and development process: He sent investors PowerPoint presentations touting the application’s concept and videos showing them supposed beta versions. The company also has a website, which is still up, boasting that Dragon-Click has the ability to recognize millions of products and offer them instantly for sale. As of publication, an application by that name was also (still) available for download on Apple and Android devices.
But the feds alleged Dragon-Click was effectively a sham, and that by April 2018, when SEC regulators obtained his bank records, the company’s corporate account had a negative balance of $142. (Spokespersons for the US Attorney’s Office and the SEC Miami office declined comment because the case is pending.)
In fact, according to an analysis of Dragon-Click related bank accounts by Miami-based SEC regulators, Grossman and his wife Adriana gambled $461,000 in Dragon-Click funds on slot machines and card games at the nearby Seminole Casino Coconut Creek, and spent another $158,000 on their children’s private school tuition, payments for luxury cars including a McLaren and a Corvette, Walmart shopping sprees, and jewelry, including a 4.81 carat diamond ring. Only $53,000 out of the $2.4 million in investment capital Grossman raised was returned to investors, the SEC declaration alleges. (Attempts to reach Adriana Grossman for comment were not successful.)
Scams targeting grandmas and grandpas are a tried and true criminal racket that may only getting bigger as the 65-and-over population, driven by Baby Boomers entering retirement age, continues to grow at a record pace. According to the Washington D.C. think-tank Population Reference Bureau, the number of Americans ages 65 and older is projected to nearly double from 52 million in 2018 to 95 million by 2060, and the group’s share of the total U.S. population will rise to 23 percent from 16 percent. A Senate Special Committee on Aging earlier this year released findings that older Americans lose about $3 billion annually to financial exploitation including phony tax collection, identity theft, sending money to people pretending to be family relatives in trouble, or investing in phony companies.
“Many of them are not quick to hang up the phone when they get an unsolicited call from an individual,” said Chris Gerold, New Jersey Bureau of Securities chief who serves as president of the North American Securities Administrators Association. “Oftentimes there are other external factors. They are concerned they will run out of money, so they look for more yield. A higher rate of return is very appealing to them.”
Nicole Iannarone, an assistant law professor at Drexel University specializing in securities regulation and professional ethics, agreed. “They think, ‘Maybe we don’t have as much money as we wish we did,'” Iannarone said. “That exposes them to potential risk. It can make one more susceptible to fraud.”
And the relationship may not be appealing solely for financial reasons. “Social isolation can be a significant challenge for seniors,” Iannarone added. “You are lonely, get a call from this person and next thing you know, you become friends.”
Grossman’s alleged victims may not have known that they could check his history via an online database or call a hotline number set up by the Financial Industry Regulatory Authority (FINRA). Among other things, the ex-stock broker was involved in four customer disputes between 1999 and 2011, fined $5,000 and suspended five business days for allegedly executing stock transactions without a client’s consent in 2004, and fired from a brokerage in 2010 for alleged unprofessionalism and violations of business standards. (These incidents all came before the launch of Dragon-Click in 2014.)
After his stock-broking star faded, Grossman got into the commodities industry when he launched London Metals Market LLC. It was a short-lived venture: In 2013, he settled charges brought by the U.S. Commodity Futures Trading Commission that he engaged in illegal, off-exchange precious metals transactions and did not use investor funds to purchase any precious metals. He was ordered to pay $121,665.75 in restitution, but never did, according to the feds.
That’s when he pivoted to online retail. Over the next four years, he spent some investor funds on developing the Dragon-Click application, Apple and Android certificates, applying for patents and paying employee salaries, Grossman testified during a March 15, 2018 hearing with Miami SEC regulators. That included his wife, who was said to be making roughly $2,000 a week for giving him ideas on how to list products.
Under intense grilling, under oath and without a lawyer, Grossman admitted to using a percentage of the investor funds, which he claimed were his commissions and management fees, for the gambling, the jewelry and luxury car purchases, his kids’ tuition, and personal family expenditures. Grossman also acknowledged that more than half of Dragon-Click’s investors were over 60.
At one point, Grossman said he was going to pass out. “I’m about to have a nervous breakdown ’cause I’m trying to be as honest and upfront about everything,” he said, adding, “I just feel I am in a lamb suit. I’m about to be eaten.”
He insisted Dragon-Click was legit, noting investigators could download the application from Apple and Android app stores and test it out for themselves. “I’m sure you all understand the company has the magnitude of being a billion dollar a year company, no questions asked,” Grossman said, adding, “Please don’t kill me. You know, we’re all human. We all make mistakes.”
Even when armed with knowledge of an unscrupulous broker, however, senior citizens can still be ensnared by players like Grossman. Consider Richard Bennett, an 80-year-old retired hospital administrator from Broomfield, Colorado, who invested in both London Metals and Dragon-Click. Benett said Grossman cold called him and successfully pitched him to invest in silver in 2013. “That went downhill,” Bennett recalled. “I didn’t hear from him for a while. I later found out he was penalized for the silver investments.”
Two years later, around June, Grossman called Bennett again. He convinced the retiree that the London Metals fiasco wasn’t his fault before launching into his spiel about Dragon-Click, Bennett said.
Bennett said Grossman emailed him a PowerPoint presentation explaining how the application, using artificial intelligence, could track down any product on the Internet. For instance, if a person found a picture of a Steph Curry basketball jersey they liked online, Dragon-Click could scan the image and then a pop-up window would pull up a sports apparel store that had it in stock. The company would generate revenue by selling retailers licenses to the application or receiving a commission from directing buyers to an online retail site, the presentation claimed.
Bennett said he initially invested $12,500 for 500 shares after Grossman told him the money would be used to complete the software, pay for a patent attorney, marketing, and technology. In 2016, he said, he invested another $12,500 for 500 more shares after Grossman called him to say he needed more funds to complete the patent process.
Now he hopes to perhaps see some restitution from the sale of luxury items seized from Grossman by the feds.
“He’s a great salesman,” Bennett said, chuckling. “He had stories and I fell for it.”
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Startup of the Week: A Subscription for Anti-Aging Pills… for Mice
Know a startup we should feature on Startup of the Week ? Email us at firstname.lastname@example.org The pitch In 2154, the Earth is an uninhabitable shitworld, and ultra-rich people live on a utopian space colony. This is the movie Elysium. In 2020, you can mail in a spit sample and in return see how fast…
Know a startup we should feature on Startup of the Week ? Email us at email@example.com
In 2154, the Earth is an uninhabitable shitworld, and ultra-rich people live on a utopian space colony. This is the movie Elysium.
In 2020, you can mail in a spit sample and in return see how fast your cells are aging, then get prompted to buy some pills in the hopes of slowing down the process. This is the pitch for the company Elysium Health, which offers its co-called “Index” test for $500.
The Index test purports to provide customers with a “cumulative rate of aging and biological age—the age at which their body is expected to perform. The report also includes general recommendations for healthy living and lifestyle factors that have been shown in clinical research to impact the clock, although there’s no guarantee that these changes will impact your biological age,” a company spokesperson said to Motherboard.
If you do take the $500 test “regularly,” the spokesperson said, you can “determine how your rate of aging changes over time and to see if lifestyle and other changes made can impact how you age in the future.”
Terrific! And what do you do with that information? As the bottom of Elysium Health’s website disclaims, Index “should not be used to determine or alter any age-related health or medical treatments based on your chronological age,” unless directed otherwise by a doctor.
Elysium Health’s main business is selling Basis, a nicotinamide riboside (NR) supplement that increases nicotinamide adenine dinucleotide (NAD+), which is involved in many of the body’s day-to-day cellular processes. Basis costs $60 for a month’s supply, or $50 per month as a subscription.
What problem does it solve?
Elysium Health seeks to address the age-old problem of old age. Elysium Health claims that “clinical trials in humans, including our own trial, demonstrate that supplementing NR can increase the body’s supply of NAD+.”
Whether this actually slows aging in humans is not yet proven. NAD+ has shown to be an effective anti-aging component in mice and yeast. But as New York comedian Sheng Wang noted, “we don’t really care about rat news. Especially if it’s positive. We don’t want to hear about how their population can thrive further. I’d rather read about rat plight.” Elysium Health’s short human trial shows the NAD+ increase, but not the metabolic or overall health improvements. Another human study from Elysium Health’s main competitor, ChromaDex, indicated NR’s ability to raise NAD+, but doesn’t mention any anti-aging effects.
In short, though NAD+ has anti-aging effects for mice, mouse studies are often overhyped. Just because something works in a mouse does not mean it’ll work in humans. In fact, cancer researchers are interested in NAD+ as a possible suspect for fueling cancer growth in humans, as a May 2019 article from Scientific American notes.
Despite the lack of evidence or FDA approval, Elysium Health has millions in funding and genuinely impressive resumes in its orbit.
The leadership team at Elysium Health has five PhDs, and touts a Scientific Advisory Board with “more than 25 world-renowned researchers and clinicians, including eight Nobel Prize-winning scientists,” who are tasked with guiding the “scientific direction” of the company.
Are you confused, and thinking, these people clearly know more than I do, given their academic credentials, Nobel Prizes, and lab coats?
That might be part of the plan. “They are part of a marketing scheme where their names and reputations are being used,” former Harvard Medical School dean Jeffrey Flier told the MIT Technology Review in 2017.
“Several of Elysium’s scientific advisory board members said their involvement should not be seen as an endorsement of the company or its pills,” the Review story goes on to say.
In the same way companies sometimes “greenwash” their image to appear more environmentally-friendly, perhaps a company attaching itself to as many PhDs and Nobel Laureates as possible could be trying to “brainwash” its image.
Who is giving them money?
Elysium Health has raised $31.2 million since its founding in 2015. Investors include Silicon Valley Bank, which led its last $5 million round of debt financing in 2017, and Cambridge, Mass-based VC fund General Catalyst, which led its $20 million Series B round in 2016. Robert Nelsen, who Forbes once described as “Biotech’s Top Venture Capitalist,” has also personally invested in Elysium Health.
What are The Experts saying?
“The company’s first product is Basis, a supplement that combines compounds designed to increase NAD levels and activate sirtuins, boosting cellular health and longevity.” –TechCrunch“Researchers are still working to prove that NR can actually improve human health—a sticking point for critics and an issue acknowledged by the companies themselves.” –Scientific American
“A ‘Fountain Of Youth’ Pill? Sure, If You’re A Mouse.” –Kaiser Health News
“If I had paid $500, I would likely be disappointed” –FastCompany
“There’s no guarantee that Elysium’s first product, a blue pill called Basis that is going on sale this week, will actually keep you young.” –MIT Technology Review
“I take that Elysium stuff…I take that stuff every day. I like it. Um, but-I guess. I don’t really know. I take a lot of things. I don’t really know.” –Joe Rogan
Should you buy it?
If you have $500 laying around that you might end up spending on things that will hyper-age you, like tanning sessions or a cigarette and cocaine smoothie, this is a foolproof way of ridding yourself of that harmful money.
If regular $500 saliva tests and $50 per month pills for a chance at longevity seem appealing, then this is your chance to make it to 2154. If you join their affiliate program, you can also make 12 percent commission on sales.
Should we even want to live longer, if we don’t address the biological age of our planet first? If you flush a bunch of these pills down the toilet, will they help heal the Earth? Like Basis’s efficacy with humans, the results here are currently inconclusive.
If you’re simply interested in your chronological age, there are some very exciting and affordable products on the market. Elysium Health links to one cloud-based chronological age calculator, no spit required.
You Don’t Have to Exercise on Thanksgiving
While some may look forward to Thanksgiving as a nice day to eat special foods, spend time with friends and/or family, or simply take a day off work, others are seemingly preparing for it like it’s a grueling battle. The body vs. a table of food; #goals vs. candied yams. The zone of Thanksgiving-related exercise…
While some may look forward to Thanksgiving as a nice day to eat special foods, spend time with friends and/or family, or simply take a day off work, others are seemingly preparing for it like it’s a grueling battle. The body vs. a table of food; #goals vs. candied yams. The zone of Thanksgiving-related exercise content is flooded and deranged: Googling “Thanksgiving exercise” yields pages of results, ranging from special tips on “how to” work out on this one Thursday in November to illustrated charts that convert each item on the table to units of exercise (one cornbread = 15 laps in the pool, etc.).
Over the weekend, the New York Times weighed in with some particularly demented advice: Attempt to passive-aggressively trick your kind, well-meaning family members to work out with you, via a series of “games” that are actually, stealthily “exercise.” A string of experts gave tips such as, “Don’t say, ‘Hey, everybody, let’s exercise,’ Say, ‘Hey, who wants to play tag?’”, and “See who can rake a pile of leaves the fastest.” The expert refers to this as “high-intensity-interval family fun,” which has real doomsday vibes about it… The family who does this stuff on Thanksgiving will be the same family doing chin-ups as the combination tsunami-wildfire consumes the last remaining pieces of land.
The idea is that by convincing your otherwise-sedentary and possibly drunk family members to do inchworms with you across the lawn, you might inspire some non-exercisers to exercise. First, this is simply not how habit-forming works. But also, it’s an absolutely demonic thing to suggest on this day of rest, as if this is your opportunity to effect change on family members whose lifestyles you don’t approve of. Tensions on Thanksgiving are already high enough for most families with their respective shares of drama. The last thing your harmonious, “no one bring up Uncle Rick’s politics” day needs is some passive aggressive asshole foisting jump ropes on everyone, under the guise of “family fun!!!!” Also… There is plenty of naturally occurring exercise on Thanksgiving, already. Cooking?? That’s sports. Sprinting toward the sweet potatoes? Also sports. Tolerating Aunt Carol’s myriad ways of asking when you’ll start seeing “someone serious?” Basically the Olympics!!!!
Scientifically speaking, Thanksgiving is one day. Even if that day is a marathon of eating, it isn’t going to thwart your overall fitness, nor is it going to make or break your family’s health. If you wish to support them, you’d have much more success providing regular support of a healthier lifestyle, rather than making everyone do kettlebell swings with the gravy tureen.
If you *must* work out, it’s possible and fine to do so. A bit of useful advice the same New York Times story offers is to get your exercise in early, before the day gets going. This is a nice thing to do, especially if you’re someone who needs 20 minutes of solitude before rocketing into a day of socializing in confined quarters. But especially for the one family member who might be tempted to make today the day they try to force everyone else to be healthier, like them: consider giving it a rest.
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Rich People Have Access to Better Microbes Than Poor People, Researchers Say
Our bodies are home to an abundance of tiny organisms, collectively called the microbiome, which are essential to human health and longevity. But not all microbiomes are equal, according to an essay published on Tuesday in PLOS Biology that spotlights how access to healthy microbes is profoundly interlinked with social and economic inequities. A team…
Our bodies are home to an abundance of tiny organisms, collectively called the microbiome, which are essential to human health and longevity. But not all microbiomes are equal, according to an essay published on Tuesday in PLOS Biology that spotlights how access to healthy microbes is profoundly interlinked with social and economic inequities.
A team led by Suzanne Ishaq, an assistant professor at the University of Maine and an expert in animal microbiomes, outlines examples of the human microbiome’s sensitivity to discrepancies in healthcare, nutrition, and safe environmental standards. This “microbial inequality,” as the essay calls it, raises the question of whether a healthy microbiome should be a “right” or a “legal obligation” for governments to pursue on behalf of people.
“The diet that you eat and your lifestyle can have dramatic impacts on the gut microbes that you recruit and the benefits or the negatives that you derive from them,” said Ishaq in a call. “If you don’t even have access to a good quality diet, you might be suffering the effects of not having those beneficial microbes and products in ways you might not have imagined.”
Gaps in microbial health can emerge before a person is even born, because some of the most important microbes are fostered in utero. The fetal microbiome is influenced by the mother’s access to healthy foods as well as her stress levels, which can be amplified by economic inequities. The availability of maternity leave or social support also affects the amount of time that new mothers can devote to breastfeeding their babies, which is another critical factor in the establishment of a healthy microbiome.
These microbial patterns play out over our entire lifetimes. Populations with access to quality nutrition will have better physical and mental health outcomes than those that do not, and that is reflected on a gut microbial level. The environmental quality of the buildings where we live and work also influence what lifeforms are inside us, as does our general proximity to greenspace, on the positive side, or polluting industrial and agricultural facilities, on the negative end.
Ishaq had been ruminating about these connections in her research for years, and decided to teach a special course on the subject at the University of Oregon over the summer. Fifteen undergraduate students with a wide variety of majors participated in the class, and are now co-authors on the new paper. Because the majority of the class were not science majors, the essay has an interdisciplinary approach that concludes with legal and political implications of microbial inequality, in addition to the medical dimensions.
“They were actually much more familiar with the social policies than I was, given their background, which was really cool,” Ishaq said of her students.
One of the questions the team explored is whether a healthy microbiome can be considered a human right or a legal obligation. One 2011 paper touched on this issue through the lens of biobanking, or archiving of human tissue, but there has never been a major legal case that establishes who owns an individual’s microbiome, or if people are legally entitled to a healthy microbiome.
From the perspective of Ishaq and her colleagues, the dynamic nature of the microbiome suggests that legal arguments should emphasize access to healthy microbes, rather than ownership over one’s microbiome.
“You’re picking up and putting off hundreds of thousands of microbial cells every day so to think that what’s in your gut is completely yours is probably the wrong way to think about it,” Ishaq explained. “They are more like passengers than things that you own.”
In other words, healthy microbes could potentially be categorized as an essential resource or common good, like clean water, safe environments, and quality public health. Ishaq hopes the essay will encourage researchers across disciplines to think about the human microbiome as both a metric of social inequities, and a roadmap to more effectively bridge those divides.
“It tends to be people that weren’t even involved with polluting water or growing too much food or pouring chemicals everywhere that end up being the ones that have to deal with these microbial-related problems,” she said.
Addressing this problem will require restructuring our societies on the largest scales, in order to ensure that the small-scale lifeforms inside us can thrive, so that we can too.