How to Get Away with a Fraud?

Ever ordered food from Zomato two times in half quantities to save money using discount coupons twice? Ever created a new account on UBER multiple times to get the first ride free? Ever taken bulk quantities for a lower price than the market from the secondary market? Ever asked the shopkeeper to not charge GST, by not drafting a bill, and paying cash?

Every one of us at a point of time in our lives thinks or has done the above intentionally or unintentionally. Are we criminals? No. But when a combination of all these techniques was applied to large sums of money, it marked the biggest financial frauds in the history of the world. Call it the Roman Empire Fraud of 193A.D. or the Modern Insider Trading Scam of 1986. But whether the actual reality behind these frauds ever get caught? Is it possible for a scamster to make loads and chunks of money, by fraud to citizens or the government and not be seen or get caught? As they say, the best cop is the one who thinks like a criminal. It’s time for the analysts to look at it from a criminal perspective. Whether it is possible or not?

The sale of the Roman Empire, 193 A.D.

During the Roman Empire's instability period, a special force allegedly loyal to the emperor assassinated the existing emperor and sold the empire to the highest bidder. The "winner" was Julianus, who proposed a very absurd price: 250 gold pieces for each member of the army, which equates to around $1 billion in today's money. Unfortunately, the guards had sold what they didn't own, committing a classic, financial scam.

The Great Insider Trading Scam, 1986

Ivan Boesky earned a fortune of more than $200 million by betting on company takeovers, many of which occurred just a few days before the transaction was announced. When accused with insider trading, Boesky cooperated with the SEC and received a 3.5-year negotiated sentence. He was also fined $100 million, a fraction of his ill-gotten gains, and barred from working in the securities industry for the rest of his life.

India has total black money of 500 billion US Dollars. Is it possible to use it to consume taxpayers’ money once and for all? So, buckle up, and tighten your seat belt, we are going to discover the strategies of Money and Asset Splits, Multiple Small Users instead of 1 big cash butt, Bulk and Secondary Market, and Undrafted Deals. We will learn the mistakes of the minds behind Roman Empire Fraud and Great Insider Trading Scam to understand why they were seen by the officials and the world. And all this for what? To see if there is something we might miss even when it is in front of our eyes. To make ourselves aware of what is the scheme behind identity thefts and investment frauds. Let us decode the technique to efficiently and smoothly, behind the eyes of the world, take it all. To understand the answer to the question,“How to get away with a Fraud?”

The sale of Roman Empire in the Modern World –

Similar to the nature of the scandal of the sale of the Roman Empire, which involves selling something that you don’t own, and the concept of Secondary Market, we have a concept of trading of intangible assets. While stocks and bonds are still regulated and under the jurisdiction of the government or other regulatory bodies, asset classes such as cryptocurrency are still an open market of close to 100 million dollars, as of recently. Easily the governing body can take all that money, and who will question. It is too late now to put a ban, even if the regulation that government is exposing after the budget release in 2022, it will take time wherein the regulatory body will come into action, as of now the cryptocurrency market is still vulnerable to one of the largest financial scams India has ever seen.

So, the formula here is that if you don’t own something and you sell that in the secondary market for the trade of assets, you are quite likely to score big.

The financial bodies around the country, if things the way a criminal would think, can avoid these getting away with a fraud concept, if each unregulated secondary market, can be treated as an independent body, and people are made aware that what they are buying is what the sellers own, but something that has an altered value in the market, giving potential of profit to its buyers.

The Great Insider Trading Scam in the Modern World –

Undrafted Deals, Multiple Users, Money Split, Hacks to Market Fluctuations and the concept of the scam in 1986, betting on takeovers a few days before the actual transaction to take place by an understanding of market’s internal management discussion and information, is another way to get into the high league.

Taking instances from the Financial Crisis of 2008 –

When the global financial behemoth Lehman Brothers collapsed in September 2008, the

impending economic disaster became a matter of 'when' rather than 'if.' Lehman Brothers was substantially involved in mortgage debt and the securitization products that resulted from it.

Lehman Brothers was primarily a real estate hedge fund camouflaged as an investment bank until it declared bankruptcy. When the US government declined to extend a loan, Lehman's insolvency triggered the world's worst financial crisis. Regulations that had been put in place to prevent this had been repealed.

These financial frauds have a huge impact on the economy and personal finances of the public, independent of the scale of operations or the geography impacted.

If we combine both the modern world realities of the schemes used in the two of the biggest scams in the world, we get how and when can people like us be fooled for all we have.

If company A deals with mortgaging and long-term security loans and uses them for trading, the bank will have to keep forging the loan to avoid discrepancies in the economy. Banks holding these loans will increase the debt rate, and so will follow a great depression. At this time, if a company B, dealing in intangible assets, or something that they don’t own and sell them in the secondary market, people will see it as a way to pay back to the government, and so will the government bring back the economy on track. While they try to increase the inflation rate, it will eventually come back to its even form, with a scenario where a vast population owns something that nobody owns, to give an instance the current cryptocurrency market in India.

Now the fact that arises is why we need to learn how to get away with fraud, is to understand how important it is for governments to regulate markets, or how important it is for us to be aware of these instances, otherwise, the science of Financial Frauds can screw us in its very natural form.

So, it comes down to why we need to understand what types of identity thefts exist and the mechanism of how financial fraud occurs. For people to be aware of such events, and make sure it doesn’t happen with them. And for the government, to make sure that a nation doesn’t have to go through it.

They, together need to figure out how to get away with fraud, and then never let anyone get away with fraud.

- Harnam Singh Chhabra