Back
in May 2016, various news outlets ran stories about 14-year old entrepreneur Taylor
Rosenthal. Rosenthal turned down a $30 million offer from “a major healthcare
company” to buy his startup RecMed, a company that planned to make vending
machines for first-aid equipment. Various news outlets, including CNBC, CNN Money, and Fox Business, wrote about this
buyout offer and how Rosenthal also already had an order from Six Flags for 100
of the machines.
I
ran into one of these articles earlier today, and I wondered how the story
turned out. Googling “RecMed” provided surprisingly little information,
including not even a company website. This made me suspect that things had not
gone quite as expected.
As
it turned out, Taylor Rosenthal was just one of many people to be taken in by
Kyle Sandler, a scam artist who targeted Rosenthal’s hometown of Opelika,
Alabama, a suburb of Auburn. According to an Associated Press
investigation,
Sandler started a business incubator called the Round House and encouraged various
locals to invest, before spending much of the $1.9 million in investment funds
on himself. It helped that while Sandler was in Opelika, he made friends with
John McAfee, the founder of the namesake security firm, who had also moved to
Opelika at the same time. This friendship made Sandler seem more credible. (If
you’re wondering about the seemingly implausible coincidence of Sandler and
McAfee just happening to run into each other in a small town in Alabama,
apparently Opelika was Alabama’s “first ‘gig city’ with a high-speed fiber-optic network” and “provided an
incentive of free internet service worth about $50,000.”)
In
any case, Sandler convinced Taylor Rosenthal and Rosenthal’s family to let him
be their advisor on the RecMed idea. He then invented the offer from Six Flags and
created a fake letter from Johnson and Johnson with the supposed $30 million
buyout. He sent out fake press releases with this information, which inspired
those articles above.
I found
this story interesting because it’s common for news outlets to run unusual stories
to draw attention, and I’ve always wondered how those stories turn out. (I’m
apparently not the only one, given that I recently ran into a Cracked article
titled “5 Viral Stories
That Had Insane Twists After We All Moved On.”) I think the story of Taylor
Rosenthal and RecMed is a particularly dramatic example of how there’s often
more to these stories than you get to see in the news, and thus your first impressions of them might not always be correct.
