The other day I was at a party where more than a few financial people were gathered and talking. Aside form the usual talk over Sunday afternoon cocktails, the discussion turned to financial fraud and the assorted scams and Ponzi Schemes that have pervaded the nation and much of the world. Madoff was given his usual attribute as the headmaster of the Ponzi Scheme. But then it turned to all the other min-Madoff’s and the assorted mortgage scams and financial fraud that garners much more modest numbers.
But then a few hundred million here and there, even dozens of millions, even several million added to the bigger pile compose appreciable figures for criminal fraud. Given the economy and the loss of money, the people who were scammed, this kind of amalgamated loss can take your breath away. What’s worse, as the economy continues to fail or find stasis, more people grow desperate and commit desperate acts.
Business owners trying to stay afloat or who are in search of new ventures will find prospective partners more than willing to take advantage of their vulnerabilities and scam them into oblivion. Other business owners will be so happy to acquire new accounts, they will not bother to do the business research to see if the reason they are so “fortunate” to have this new account is because he has burned his bridges with every other supplier.
And then there are the bold new ventures, the forays into alternative energy and environmental reclamation. While I truly believe these emerging industries and the ancillary sectors that will grow around them are the future of this nation, I am also aware that there are dozens of scam artists waiting to hoodwink someone with their nefarious schemes. Then there is the mortgage fraud and the assorted deals on distressed paper and properties. With the FBI announcing there are a half million incidents of mortgage fraud it should be small wonder there should be the post mortgage fraud-fraud that we are forced to endure. Then there are the stimulus package frauds and another hundred Ponzi schemes.
So if you are engaging in business, conduct business research. Run business credit reports on any potential partners. Run comprehensive background checks on the principals of the company. Spend a few bucks and save thousands, even millions. And what’s best of all, when you do appear in your fifteen minutes of fame on the six 0’clock news it won’t be a sad story you are telling.
Check them out before you invest.
