Earlier quoted context omitted.
Leaving aside the fraud question, my gut says if you hire someone as a consultant because you saw them in a bunch of photos with celebrities, or because you heard they went to xyz corporate parties, you deserve what happens. Don't make lazy shallow hiring decisions, and don't make "meeting the right people" the key to your business plan, and this is never a problem for you.
How naive and self-righteous. Such people "deserve" to be defrauded? Because they acknowledged the reality that funding often depends more on who you know than the merits of your product, and tried to work around it and get on with what they actually wanted to do rather than getting sidetracked on all the little injustices of the world? Because you consider the funded model of starting a business to be fundamentally…
Regardless though, all businesses should think long and hard about hires, not just hire pointless people because they give the impression they know everyone in town.
The world is full of injustices, but I'd rather try my luck with those injustices than have to write consulting cheques to people who's bankable asset is how shamelessly they brag about who they party with.