Dan Davies, a former Bank of England regulatory economist, offers an in-depth portrayal of fraud and its effects on the global economy. Using contemporary and historical case studies, he delves into commercial fraud, translating its complexities into understandable terms and providing insights into white-collar crime. He details intricate schemes that have entrapped investors and firms in the United States and Europe. Davies asserts that the skills required to manage a legitimate commercial operation mirror those that financial criminals use to deceive. His creative depiction of the intricacies of fiscal crimes adds up to a fascinating reference manual on how to spot fraud.
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, ...