The American government's 2006 Fraud Review concluded that fraud is a significantly under-reported crime, and while various agencies and organizations were attempting to tackle the issue, greater co-operation was needed to achieve a real impact in the public sector. The scale of the problem pointed to the need for a small but high-powered body to bring together the numerous counter-fraud initiatives that existed. I’ve decided to be that body.
Coincidentally, I was talking with a grand jury a while back and we were exploring the subject of fraud, in general terms. Texas is a business friendly state at heart, which is why it is currently such an attractive relocation destination, both for employers and employees. With business comes prosperity…houses, cars, steel mills, schools, refineries, pipelines, chicken fried steak (almost two dozen sold)…and bloodsucking leeches. We all agree that growth and prosperity are generally desirable in a community, and we all agree that all fraudulent behavior is an undesirable situation in all aspects, but ‘fraud’ itself seems difficult to recognize. Theft is when you steal money, covertly or forcibly. Fraud is when your mark gives you money, the more the better. Both of you enjoy it. You think you’re receiving something of value, but you’re not. Accordingly, I’ve put together this field guide to recognizing a fraud in your midst and avoiding entanglement. These organizations use devious methods but share common traits.
1. Set up a patsy, just in case. He can keep a little money, and probably not go to jail. But if anyone goes to jail, someone else is always better. If your patsy has half a brain, he’ll set up a patsy too.
2. The service you provide should be of tremendous value. Don’t get confused trying to provide services of tremendous cost.
3. If your service is related to legal or regulatory compliance, you will be more successful. We have a lot of laws. Find a niche. Besides, penis enlargement and hair growth are crowded fields already.
4. Set up a home office in another state or country. At least 50 miles away. You don’t want irate people barging into your office.
5. You have a system, right? Steal a little money every day, maybe no one will notice. There are 365 days in a year.
6. Avoid responsibility. Your system should do the heavy lifting. Systems don’t go to jail.
7. Where there is lots of confusion, there is lots of money.
8. Never talk to a mark directly. This is what your patsy is for.
9. If you’re unavailable, your secretary can take a message and you can return the inquiry later. Much later.
10. Your staff should only have first names. It’s more social. And do some churning. If the person in question no longer works there, it takes some time to check stuff out.
11. Act quickly receiving money. Act glacially in all other aspects. Anyway, you’re on vacation this week, right?
12. Use bribes strategically. People can be grateful. Inspire avarice.
13. Be generous with your partners and employees. Their silence is golden.
14. Use other people’s money. Whenever possible.
15. Defer compensation. To other people.
16. Hire some scientists. People like scientists.
17. Hire some doctors. People like doctors.
18. For the complicated stuff, write real small, and hire that guy who talks real fast for the voiceover. People don’t pay any attention anyway.
19. Have plenty of sweepstakes. People like to have a chance to win stuff. They don’t have to actually win it.
20. Always send a receipt, describe the services rendered, and say ‘Thank You.’ She might have more money.
21. If someone wants to know a little more detail, they should ask info. Everyone can take turns being info for a day, or customerservice, or whatever.
22. Answer all inquiries with a request for more information, so your response can be more responsive. Maybe inquiries have to be worded in a certain way, to comply with your system. Maybe the inquirer will die before info is able to fully research the issue.
23. Have an exit plan. Be ready to change the home office, change the name, dissolve the corporation, restructure the business to regain focus, go bankrupt…at a moment’s notice.
24. Don’t sign anything. Don’t send e-mail. Don’t skype in. Don’t leave tracks.
25. A POBox is a good thing to have. POBoxes don’t sign for acceptance. Stuff gets lost.
26. Confusion is your friend. It never hurts to bill someone twice. Sometimes they pay twice. They might have a system too.
27. Cook your books. Double entry bookkeeping is amateurish. Use offsets. Establish reserves. Be creative.
28. Compartmentalize information. Three people can keep a secret. If two of them are dead.
29. Use accomplices to inflate the perceived value of an asset before sale outside the group. A coordinated effort can also deflate the value of a desired asset before acquisition within the group.
30. Work on many levels. Consider dba SomeoneElse, SomewhereElse.
31. Be a Trustee. Inspire confidence. Take a fee.
32. Be an internationalist. It can be advantageous not to know the language well, qui’en sabe?
33. Cultivate mystery. Other people’s imagination can paint a stunning portrait.
34. In the land of make-believe, true lies are your mortar. Dollars are your bricks. Be expansive!
35. Take small bites. To a man with $1000, ten dollars is insignificant. To a man with $84.2 billion, $12 million is insignificant. Be discriminating. Eat out often.
36. You get more money from people who have already given you money. And their friends.
37. Don’t respond to argument. People believe, or they don’t. Don’t waste time with unbelievers. Inspire!
38. There are always obstacles. A little more money would help out.
39. Costs should be specific. Benefits should be incalculable.
40. Make sure not to break any laws. Only if unavoidable. Don’t be a patsy.
42. [Not invented yet]
45. Someone else’s problem
46. Someone else’s fault
47. [To be disclosed]
48. [Under review]
49. No strings attached.
50. Set up a patsy, just in case. He can keep a little money, and probably not go to jail. But if anyone goes to jail, someone else is always better.
I hope this short precis’ serves as a helpful guide in your daily activity. It’s much more satisfying to recognize and avoid entanglement, than to extricate oneself from a situation. Cheaper also.