Fraud is the new global industry

James Doran asks whether fraud is endemic in America’s business culture – or whether it is just more visible because the US authorities are better at exposing it and bringing perpetrators to justice

I remember vividly when Bernard Madoff was busted for masterminding the biggest Ponzi scheme in history, because it coincided with the day the US Marshals Service broke down my neighbour’s front door.

She too, it seemed, had been the mastermind behind a fraudulent scheme, albeit on a slightly less grand scale. Shola, I won’t give her last name, is suspected of involvement in identity theft, having apparently used somebody else’s name and credit history to obtain a mortgage. She may also have fleeced her mortgage bank for about $500,000 and her two families of tenants out of a year’s rent.

But Shola was no longer at home: she had moved on, and besides, the Marshals were not there to arrest her for fraud, they were there to clear the building and reattach the front door with a giant padlock and chain on behalf of new owners, Deutsche Bank National Trust.

Back at my desk, the Marshals having successfully secured the house next door, I noticed my inbox was heaving with emails from the offices of the United States Attorney for the Southern District of New York – the local Department of Justice outpost that deals with a great deal of white collar crime, as Wall Street falls in its bailiwick. Ponzi schemes, mortgage fraud rings, investment scams, even a hedge fund manager faking his own death to avoid charges of embezzlement, were included in the latest missives from the Feds. All of a sudden it seemed to be raining fraudsters in New York.

Drunks call it a moment of clarity, the sensation when all of a sudden the chaos and complexities of life dissolve to reveal a simple and clear path to the answers one has been seeking. ‘It’s all a fraud’, I thought aloud.

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don

May 1st, 2009 10:54am Report this comment

regulaters are always slow and usually lazy, where's the glory in a boom time to stop a company from trading? you'll be accused of losing jobs and an industry for the country, or that other nations will gain an advantage from your strict rules. The charge of bureacracy always scares everyone into ignoring calls for more regulation

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