Lying for Money

Fraud is a global phenomenon that seldom exploits human moral failings; rather, it thrives in the absence of checks and balances.

An economy’s fiscal controls – or lack thereof – will determine the amount of fraud it suffers. Because fraud has expanded concurrently with the modern economy, a corrupt undertaking often bears an inverted resemblance to the frameworks of global corporate or financial institutions.

To con a legitimate enterprise, a white-collar criminal must know as much about running the business as its management does. Perpetrators are generally of the same social class as those who punish fiscal crimes. Typically, businesses trust each other to deliver goods and pay invoices, but this informal arrangement breeds deception.

Charles Ponzi elevated fraud to a global stage in the 1920s by exploiting arbitrage opportunities presented by International Reply Coupons (IRCs), a type of global postage voucher with set exchange rates for each country. Ponzi found that, by using his contacts overseas, he could profit handsomely on the differences in currency rates. He assured his clients, mostly fellow immigrants, that they could double their investments, ...