Most people are aware of the insane amount of money Google keeps earning, but the New York Times (h/t Online Media Daily) offers up an article about what the former employees are doing with it.  They are starting their own venture capital firms.

What I didn’t know was that this path was blazed by the former PayPal employees a few years ago.

Mr. Sacca, 32, joins a growing number of Google millionaires hoping to parlay their newfound wealth into even greater riches by bankrolling technology start-ups. Three years after Google went public, a fast-growing network of company veterans is fanning out across Silicon Valley. Some are joining the venture capital firms that financed the technology boom of the 1990s. Others are raising investment funds or backing embryonic companies with their own money as so-called angel investors.

…

It often pays to stick together in Silicon Valley. PayPal, the online payments system, spawned a bunch of serial entrepreneurs who went on to found and finance some of the hottest Web 2.0 companies, among them YouTube, LinkedIn and Slide. Many PayPal alums invest in one another’s companies. One co-founder, Peter Thiel, who now runs a $3 billion hedge fund and venture firm in San Francisco, is the godfather of what people jokingly call the PayPal Mafia.

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This story is almost unbelievable.  The scam was set up at AIG and involved a VP of HR.  From Workforce Management (my editing):

Federal authorities have charged a former human resources vice president of American International Group Inc. and three accomplices with defrauding the insurer of $1.1 million with phony bills for employee search services.

According to a federal criminal complaint, Falcetta moved from Philadelphia to New York to take his job with AIG in September 2005. His duties included managing contracts with employee search firms, and he had the authority to add firms to AIG’s approved list of vendors and to pay vendor bills up to $50,000.

Over the next two years, until AIG terminated him in August, Falcetta approved payments to bogus headhunter firms set up by Santone, Pombonyo and Broadbent, authorities allege. Those payments included $320,525 to G. Santone Associates, run by Santone; $674,886 to two firms, Enterprise Business Group and Global Search Affiliates Inc., run by Pombonyo; and $120,000 to Broadbent Advisory Group, run by Broadbent, the complaint says.

The four companies then kicked back $462,476 to Human Capital Management Partners, an entity Falcetta had created, authorities charge.

None of the search firms actually performed any work for AIG, and at least some of them appear to exist only on paper, the complaint suggests.

It never ceases to amaze me how criminals will go to such lengths to set up a scam.  Imagine if they used their skills for a legitimate enterprise.

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