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The Magic Box Hoax 481

Rasvar writes "Here is an interesting article from The Florida Times-Union about a high tech hoax that managed to pull in the likes of Blockbuster Video, US West, Ted Turner, Sen Orrin Hatch and numerous others. I actually attended one of the "demonstrations" of this device years back. I came away cynical becuase of the way he presented stuff. Sometimes it is good to be a cynic. This is a very good article on an impressive high tech scam."
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The Magic Box Hoax

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  • Bah (Score:3, Interesting)

    by delta407 ( 518868 ) <slashdot@l[ ]jhax.com ['erf' in gap]> on Sunday May 05, 2002 @03:03PM (#3466373) Homepage
    I can transmit video in realtime over a standard phone line -- it's called DSL. Additionally, I can even stream video over a modem, 512x512 @ 30 FPS as listed in the patent (even though TVs aren't square).

    How about solid black? I'm thinking a 9600 baud modem can do that, depending on the compression.
  • Wanting to believe (Score:4, Interesting)

    by Alien54 ( 180860 ) on Sunday May 05, 2002 @03:04PM (#3466376) Journal
    wouldn't they have realized that there are physical limitations to a POTS line's bandwidth?

    I thought that the POTS line bandwidth was to some degree limited by other things like filtering.

    Otherwise things like DSL wouldn't really work.

    (off on a tangent) I recall many years (1970s?) ago how they did (and maybe still do) broadcasts in Boston of Boston Symphony concerts at TangleWood in the Berkshires, over 100 mile away. They had recordings of the original source, they had the signal at the end of the phone line, and they knew what the difference was. They merely amplified the signal at the source end to compensate for the losses, making sure to not clip the signals. Result at the end in Boston was a signal completely acceptable for FM Stereo broadcasts.

    So I can see if you are not completely expert in the technology, being able to make up your own examples, and talking yourself into believing that Certain Limitations had been exceeded.

    Heck, Look at the history of the dialup modem, going from teletype speeds to 56k, far exceeding original expectations.

  • Other scams (Score:1, Interesting)

    by Anonymous Coward on Sunday May 05, 2002 @03:13PM (#3466408)
    This guy isn't the only one running a venture capital scam promising high tech payoffs.

    Check out Betavoltaic [betavoltaic.com] This guy that is the CEO has a long history of pseudoscience, and some of his officers worked on "perpetual motion machines", all of which needed a DC power source to run.

    Posting anonymously to avoid the wrath of that asshole that runs the place. He likes to sue people to quiet them down about his scam.
  • by eagl ( 86459 ) on Sunday May 05, 2002 @03:27PM (#3466459) Journal
    I was a spectator to a similiar case, where a guy calling himself Paul "Voss" Hinds was trying to get money to start a flight simulator game company. That story has a LOT of parallels.

    He claims to be an Air Force Academy Graduate.
    His AF records cannot be found by ANYONE, and he claims this is because of his involvement in secret projects.

    He was out of sight for several months in 1997, and later claimed he was on death's door due to a scorpion sting under a fingernail.

    He had a "fall guy" who he claimed ran off with the $10,000 he managed to get from investors.

    He submitted as "proof" several SGI generated "screenshots", all of which used clearly typical demo features and openGL artifacts.

    He claimed to own a P-51 Mustang and even submitted a doctored photo of a P-51 with his head cut-n-pasted into the cockpit and his name written under the canopy. The font for the canopy matched an Adobe Photoshop default.

    He claimed to have shot down several Iraqi fighters in his F-16, yet no records of those shootdowns exist.

    The list goes on and on, and this guy finally resurfaced using his handle "voss" in an online simulation, and he verbally attacks anyone who brings the scam up, challenging them to talk to his "astronaut general buddy". Strangely enough, this astronaut guy actually exists although I have not contacted him personally.

    The parallels kept hitting me as I read the article, and I wonder if this was the same guy, or if (somehow) Paul Hinds had been set up by this same guy.
  • by KingPrad ( 518495 ) on Sunday May 05, 2002 @03:37PM (#3466492)
    the investors "made their decisions unhindered by the thought process". Sums it up I think.
  • Selling Yourself (Score:5, Interesting)

    by Fished ( 574624 ) <amphigory@gma[ ]com ['il.' in gap]> on Sunday May 05, 2002 @03:39PM (#3466501)
    For all those who are outraged that the scam took in so many (i.e. "Why didn't they get some competent people to recview it before investing), the answer is that <b>they did</b>. The article talks about the way that many scientists reviewed the invention, but were never quite able to say that the invention was impossible. On this basis, the investor's said "it appears to work. I'll take the risk and assume it does actually work."
    <p>

    Why didn't the scientists say that this was completely absurd? A lot of reasons. First, they are being paid to review the invention. If they say that the invention doesn't work and it does, then they are liable for the massive losses incurred by the investor for a failed opportunity. If they say it doesn't work and it does, they get sued by the inventor. So, what do they do? They hedge their bets. They say that "more study" is needed, etc. To business types, this sounds like they are just being nerdy and cautious. Since they leave the question open, the investor (who wants to believe) goes ahead and goes for it, figuring that the 5 million dollars invested (or whatever) could well turn into billions.
    <p>
    In some respects, the scientiastws have failed them by not emphasizing their near-certainty that the idea was nonsense. And the businessmen failed themselves by not bothering to learn that, when a scientist says "quite improbable", he means "impossible."

    <p>

    sounds like everyday life to me, and should to most geeks.
  • by Boulder Geek ( 137307 ) <archer@goldenagewireless.net> on Sunday May 05, 2002 @03:44PM (#3466516)
    Here's a story about a similar scam [thestandard.com] from the dot com era. This guy raised $20M, and spent $16M of that on a party in Las Vegas with entertainment provided by the Dixie Chicks and The Who.
  • This sound familliar (Score:3, Interesting)

    by graveyhead ( 210996 ) <fletch@@@fletchtronics...net> on Sunday May 05, 2002 @03:47PM (#3466526)
    Anyone else remember pixelon [wired.com]? You'd think investers would learn from their past mistakes...
  • by idonotexist ( 450877 ) on Sunday May 05, 2002 @03:51PM (#3466545)
    This article pisses me off, why? This scammer has an expensive home, a few cars such as a Jaguar (ok, Jaguar sucks but it is arguably better than his Eclipse), boats, and a couple of planes --- oh, and he still has a bundle of cash.

    I, or any number of us, could pull an evil-scheme like this off. But, for some reason we don't. For some reason we have ethics and values. And, for some reason, a guy like that has more money than he needs to live on. Obviously, the world is not fair.
  • VCR? (Score:2, Interesting)

    by eander315 ( 448340 ) on Sunday May 05, 2002 @03:53PM (#3466557)
    The investors were tricked using a VCR and lots of coax. I don't know about you, but investing hundreds of thousands of dollars (or even millions) without the chance to at least play quake over the super-fast "network" seems a little ignorant. Anyone who invested in this scam obviously let their greed get the better of them, and demonstrated that the rich are not always rich because they are extraordinarily smart.
  • Hal Puthoff (Score:5, Interesting)

    by buhr ( 97820 ) on Sunday May 05, 2002 @04:04PM (#3466598)
    Perhaps this is of interest. Hal Puthoff, the "Texas physicist considered an expert in the concepts Priest said he was using", is---I believe---also known as Harold Puthoff.

    Together with Russel Targ, this infamous team produced, let us say, somewhat credulous studies of spoon-bending psychic Uri Geller's remote viewing abilities. They also have the dubious distinction of having provided some of the best evidence that positive feedback improves ESP ability. Tragically, no skeptic who uses reasonable experimental controls seems to be able to duplicate their results.

    The fact that Priest's box has something to do with Puthoff's area of expertise is hilarious! I wonder if the author of the article was being *intentionally* ironic.
  • Re:Who's to blame? (Score:3, Interesting)

    by lostchicken ( 226656 ) on Sunday May 05, 2002 @04:08PM (#3466614)
    Inventors make their livings breaking physical limitations. The 1903 Wright Flyer, the Bell X-1, ADSL, DOCSIS all are things designed to skirt around physical limitations.

    I remember someone proposing illuminating lines with an x-ray maser, in an attempt get very high speed transfer. It exceeded the limitations of the wire by not using it. The wire only contained the data.

    If I had "done my research" I would know I can't get 40gHz signals down an Aluminum wire, but waveguides work just fine.

    If we listen to all limitations, we won't get anywhere. You just have to ask how something works.
  • Re:Who's to blame? (Score:3, Interesting)

    by 2sheds ( 78194 ) on Sunday May 05, 2002 @05:03PM (#3466852) Journal
    It does seem that Laser at least has become a generic term, with the 'light' bit meaning the spectrum in general - take the Laurence Livermore Labs CMT Laser which they refer to as a 'table top X-ray Laser'. It gets down to 14-20 nm.

    The Rutherford Appleton Lab's VULCAN X-ray Laser here in the UK gets down to about 5.9nm, though it's apparently huge (providing 90J of energy IIRC) whereas the CMT ('Comet') is obviously compact but only produces 5 or 6J of energy.

    That's probably out of date by now but the point stands...

    james

  • Huh? VisionTek? (Score:2, Interesting)

    by rainwalker ( 174354 ) on Sunday May 05, 2002 @05:12PM (#3466888)
    Craichy and a friend gave Priest about $500,000 for a stake in VisionTek, the company the Priests formed to sell their invention.

    Not that I would accuse this article of being a hoax itself, but VisionTek is a company that makes [excellent] video cards....I use them in my boxes. Poking around Google yielded no companies with similiar names....what gives?
  • by RhettLivingston ( 544140 ) on Sunday May 05, 2002 @05:57PM (#3467049) Journal

    An acquaintance of mine is particularly susceptable to these. He's a real dreamer type who made lots of money on one gamble (purchased cellular telephone bandwidth rights shortly before cellular telephones took off) and then lost it all on two others.

    The scam that took most of it was a guy who was going to wire every stadium box in America with fiber and equip them with dual processor computers and 42" displays (in 1997 time frame). Basically, the idea was to let the rich simultaneously surf the Internet, see their email, get special game statistics, watch replays, etc while watching the game. Even if he did it, I never understood how he was going to make the millions of investment money back. This was an example of a scam that used plausible technology, but never had a sustainable business model. The investment capital was just being pocketed.

    The other was actually a perpetual energy scam. Yes, people still fall for that one. This was some sort of device with multiple rings made of just the right metals and spinning in different directions or something. Somehow, it supposedly extracted energy from the Earth's magnetic field. I researched it a couple of years ago and found that the guy has been running the scam for over 40 years. This guy's big hook was religious based at the time. He claimed to have died in a traffic accident with a ruptured aorta and been miraculously brought back to life. When he awoke, the schematics were in his head for this device. They had been given to him directly by God. He was giving this story from the pulpit at really conservative Christian churches across the SouthEast and attracting all sorts of investors.

    I wonder why there is no suspected scam site on the Internet? Maybe the legal risks would be too great...

  • by Anonymous Coward on Sunday May 05, 2002 @07:45PM (#3467390)
    "I thought I would be the guy that finally got this technology developed," Strong said. "That was my supreme arrogance."

    It never ceases to amaze me how many nontechnical business people - people who are unable to actually produce a single useful thing from scratch - are under the delusion that they are the people that produce technology.

    The real cons take place when investors steal the perpetual rights to powerful technology developed by financially unsophisticated geeks for a few paychecks.

    It's nice to see someone putting something over on the real thieves for a change.

  • by hazem ( 472289 ) on Sunday May 05, 2002 @08:21PM (#3467472) Journal
    Actually, I think the 10% reduction, in reference to decimation, is correct.

    The name comes from a practice used at times by the Roman Army (if my sources are correct).

    When a unit of soldiers did not perform well in battle, and particularly showed cowardice, they were lined up in groups of 10. One was chosen from the group of ten to be brutally beaten and killed by the other 9. It was used as a tool to motivate the troops to fight to the best of their ability.

    So given that, 10% of the soldiers were removed, leaving 90%.
  • It sounds like (Score:4, Interesting)

    by ahde ( 95143 ) on Sunday May 05, 2002 @09:09PM (#3467611) Homepage
    you know, from the article, it sounds more like that the "investors" were more interested in keeping his invention out of production. Particularly Blockbuster and Qwest had tremendenous motivation to supress the idea, whether legitimate or not. I seriously doubt Blockbuster was interested in obsoleting their own business model. And Qwest owns of the more miles of wire than anyone in the world. Whether they knew it was a hoax or not is kind of irrelevant, since the principle investors never intended the product to be developed anyway.
  • by Anonymous Coward on Sunday May 05, 2002 @10:42PM (#3467821)
    I started work at a private company that publishes very popular audio software for the entertainment industry in the late 90's. My first task was to incorporate a new super high digital compression audio codec the company had just licensed.

    Upper level management was very impressed with the algorithm because it was an "analog" audio compression algorithm, and everyone in the music industry knows that analog sounds better than digital :-) The fact that this "analog" algorithm would have to be implemented in a computer never seemed to cross anyone's mind. And according to the scam artist, the secret was that he would take the output on the digital side, and run it through "winzip", not just once like the other guys, but multiple times! You can't imagine how in the world I kept from laughing as the V.P. of Technology of this company told me this on my first day of work.

    The story is pretty much the same-- the guy never produced a working prototype, either analog or digital. He even sent me a visual basic program which of course never actually ran.

    I wasn't there to meet the guy in person, but the demo that was described to me was incredibly easy to fake. He basically had a black box, and plugged the audio source into one side, and the output from the other side into an amp. Incredibly, the output sounded just as good as the input!!!

    Unfortunately the story has a sad ending (for me at least) because in order to explain why I couldn't get the algorithm to work, I hinted that perhaps just maybe the guy was running a scam. (As if the lack of working prototype wouldn't explain it.) The president of the company actually yelled at me over the phone "do you think I'm an idiot!", "do you think I'd let myself by taken by a con artist", etc, etc. Needless to say I was fired a few months later...

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