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Bodhi Barney
Mr pitcher
English 12
3/1/2010
Research project
I have learned a lot while researching about fraud. I also learned a lot by reading catch me if
you can. It showed me that I have a lot to learn in protecting myself from any number of scams.
Fraud is almost as broad a topic as crime. It is a little more specific in that you the victim must
agree to something for it to happen to you. If just don’t respond to the email or hang up the
phone they can’t steal from you. This isn’t always the case because a criminal can steal your
information from a database of sorts. This is typically how Identity theft is committed. There
are several types of fraud that I learned about and they all are different.
A major point that I learned about is what is called the Fraud Triangle. Obviously it’s a “tri”
angle because there are three main components of it. Examiner.com calls the three points
Opportunity, Incentive, and rationalization. I think of it like the fire triangle which includes heat,
fuel, and oxygen. Those are the three things that a fire needs to burn. I think that the heat is
like incentive. Something must be driving you to steal or commit a crime otherwise why do it?
The incentive in fraud as with most crimes is financial gain. Examiner.com uses a cashier at a
store as an example. In the example the cashier is able to steal money because he is next to an
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open cash register and no one is around. In this example the cashiers incentive is clearly to get
more money so he can buy the things he wants. Fuel is like the opportunity it allows it to
happen. You can have this great plan, a wonderful idea but if there isn’t an opportunity to do it,
it won’t ever happen. In the cashier example the opportunity is that nobody is around and
there is an open cash register full of money. Finally Oxygen is like rationalization because it
keeps it under control and lets it continue. It’s mentioned on Examiner.com that rationalization
is kind of a grey area because it might not be an exact, specific thing. The opportunity has to be
there or you wont be able to pull it off. The incentive has to be there or you wont have the
desire or drive to try it. The rationalization is where it becomes different. This is where you
have to decide how you can justify steal, breaking the law, hurting somebody, etc. The
rationalization or excuse that Frank Abagnale Jr uses in Catch Me If You Can is that he is only
ripping off big huge corporations. He figured these companies gross billions of dollars every
year they aren’t going to miss five hundred bucks if I write a bad check. The only person he
personally ripped off by writing a bad check was a prostitute in France which he didn’t like.
In explaining the fraud triangle the website Examiner.com does a good job explaining how
people rationalize things. If felt it wouldn’t hurt anyone in particular then you would feel better
about it than if you were specifically hurting or stealing from one person.
Fraud is a very wide spread crime. This is because it is really easy to do. Also because it very
hard to track. Frank Abagnale sums it up really well in an interview I watched of him. He says
“In my thirty-one years teaching at the FBI academy I have only seen crime get
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faster, easier, harder to detect, and committed from thousands of miles away where we
don’t even have jurisdiction to go arrest the people who commit those crimes”. I think this
pretty well says it all about crime and especially fraud. With computers you can do almost
anything at any time in almost every place in the world. You could be in home and the
criminal could be half way around the world in a grass hut and he could be stealing you
identity. The scary part is that it is extraordinarily hard to detect, Especially if it is only in
small amounts at a time. If the criminal has stolen a lot of information from a lot of different
people they can just steal a little from each person and they would never know. A story that
has impacted us locally illustrates that very well. A few men placed skimming devices in the
pay at the pump stations at two gas stations. The skimmers scan all of your debit and credit
card info. Then every once and a while the guys would just drive to the parking lot of the
particular gas station, hang out for a while as their laptop downloaded the info and nobody
was the wiser. Police say between the device at the 7-Eleven on 1300 East and the device
found at the 7-Eleven on 9400 South, consumers lost more than $11,000 from criminals
skimming their credit and debit cards. (Yi,Sandra KSL.com 2010). The criminals in this story
only took about thirty dollars per person that they ripped off but it added up. They would
retrieve the data from the machines in Utah, and then use that info to get money out of ATM
machines in California.
Another reason fraud is so wide spread is because almost anybody can do it. You don’t
really need any special skills to do it. To be jewel thief you have to be very smart, have a
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ton of technology, probably need to be physically fit, and be very good at hiding from
authorities. Fraud on the other hand you really don’t even need to hide because it is so
hard to track. To show that anybody can commit fraud there is a story in time magazine
about a nerdy sixteen year old kid who started scamming people to gain respect of girls.
“Minkow says he got into scamming at age of sixteen an set up zzzz best in his parents
garage so he could impress girls. I learned that money brought respect, and it was like a
narcotic, he says. I couldn’t live without it. At its peak, zzzz best had 1,400 employees at 23
locations in three states. But the reality was something else” more than 85% of zzzz
best’s cash flow came from undisclosed loans fronted by organized crime in New York City—
all booked as revenue for supposed contracts to renovate distressed housing. When the FBI
finally unraveled the scheme, Minkow managed to pay of his Mafia loan sharks (you can’t
mess with ‘em, he says), but some $300 million worth of company stock was suddenly
worthless leaving hundreds of investors in the lurch. Zagorin,Time 2005. This young man
now works for the FBI on fraud just like Frank Abagnale did once he was released from
prison. This article just shows how accessible and easy it is to commit fraud. This kid created
a fake carpet cleaning company and it was worth over $300 million before it was found out.
He just ran it out of his parents home and it didn’t even exist.
Fraud can take place almost anywhere and in any industry. The kid in the story above did it
with carpet cleaning. We hear a lot about bank fraud, check fraud, how corrupt the big
corporations are, but you don’t really think about it taking place in the science community.
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An article in the New York Times this is shown very clearly. “In June, a survey of 3,427
scientists by the University of Minnesota and the Health partners’ research foundation
reported that up to a third of the respondents had engaged in ethically questionable
practices, from ignoring contradictory facts to falsifying data. In 1981 Dr. Donald
Frederickson then the director of the national institutes of health, defended the standard
view of science as a self-corrective enterprise saying “we deliberately have a small police
force because we know that poor currency will automatically be discovered and cast out. But
fraud after fraud made the weakness of that system impossible to ignore. In the early 1980’s
a young cardiology researcher, Dr. John R Darsee was found to have fabricated much data for
more that 100 papers he wrote while working at Harvard and Emory universities. This story
proves that fraud can and does happen anywhere and to anybody. For some reason science
seems like it would be immune to fraud. That is far from the truth, it goes back to the fraud
triangle. The scientist obviously had some incentive to commit fraud. As stated in the New
York Times article the opportunity was definitely there. There were almost no regulations to
ensure that scientific findings were accurate or even true. We can see a great example of
that in recent history. A story that was all the rage not too long ago was that many if not all
facts about global warming were either made up or grossly exaggerated. These scientists had
a lot to gain in terms of money if some tree hugger wanted to pay them off to over
exaggerate the facts about climate change. Clearly there incentive was to monetary, and
since no one really regulates scientific findings they felt that they wouldn’t be caught. This is
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what gave them the opportunity and also the justification or rationalization that it was okay
to do this.
It seems like many years ago you would never expect the government to be corrupt. You
would that at least the government can abide by its own rules and regulations. President
Nixon probably made the biggest impact on people being suspicious of the government.
Even the military isn’t immune to fraud. In a FOX news story they tell about not having
enough investigators to catch all the things going on in the militaries budget. Double billing,
bribes, kickbacks, military contracts are big targets for serious crimes. The army’s contracting
budget has exploded since the wars in Iraq and Afghanistan began from $48 billion in 2002 to
$112 billion in 2007. Yet the number who hunt down crooked companies and corrupt officials
has stayed the same according to associated press interviews and research. This shows that
nobody is completely safe from fraud and we need to be on constant look out to avoid. A big
thing is to take away the opportunity for the criminal to commit the crime. Frank Abagnale
says that best to prevent fraud from happening to you is to make it difficult for them. The
opportunity is the only one you as the general public can control so we have to be careful
and protect ourselves from fraud. If criminals are usually opportunistic and not looking for a
challenge. So even if you make it the least bit hard for them they will move on to somebody
easier to scam. Without one thing the fraud triangle falls apart so the same goes with any of
the three things, opportunity, incentive, and rationalization.
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I have learned a lot from doing this research paper. I learned a lot about fraud, Frank
Abagnale and most importantly I learned a lot about how to do good research. Before this
project I hadn’t even heard of a database. When Mr Hinckley came and taught us how to find
good, reliable, credible sources that opened my mind to a lot of new resources’. I would
never have known about all the real databases available to me if it weren’t for this project. I
would have just continued to use Google and Wikipedia. Which I now know are probably the
two worst sights to use for a research paper. I learned a lot about fraud prevention and what
it really means to be fraudulent. I learned an awful lot from this project and it has helped
immensely.