• fraudstersdiary

Types of Fraudster

In a previous diary entry, I described myself as essentially lazy, something of an uncomfortable truth, and, in my opinion, the main reason why I did what I did. In my experience, there are broadly three types of fraudster - although I’m happy to be proved wrong if you know different......


Opportunists

These are people like (the old) me who are driven by the chance of making quick and easy money, with only a limited chance of being caught. Once I’d had a few quick wins, I was hooked: Why would I choose to be a wage slave working 40 hours a week, commuting with the ‘great unwashed,’ and paying a shed load of tax when the alternative was far more attractive? My preferred ‘job’ consisted of working from home (before Covid made it necessary), picking and choosing what I did, no commuting, and earning a small fortune. It was addictive. And maybe, getting away with it was more than a little exciting.


Whilst some involved in this industry are loners who never work with anyone else, I would meet with my ‘colleagues’ at least once a week to discuss current trends, any known threats from the Old Bill, and opportunities to exploit situations and/or people. We usually met in coffee shops and though we knew each other’s first names, we divulged no other details. New members of our ‘business community’ were treated with suspicion until they had proved themselves - usually by providing information that one or more of us could use.


Those In the mire

I’m not making excuses for those in this category, but many of these guys see fraud as the only way of digging themselves out of the mire they are in. Clearly there are a number of reasons why people drop into the shit in the first place. Just for instance, one guy had a family business and had over 100 employees (some of who had worked for the company for 40 years). He was basically a distributor of imported goods. He had a warehouse on a dilapidated industrial estate, and his heavily-mortgaged house was nearly as big. His trophy wife was a parasite who felt underdressed if she walked outside with less than five carats in diamonds dripping off her. His adult kids were rude to everyone, and had an angry entitled attitude. All the family members had cars and lifestyles paid for by the business, which was fine until the likes of Amazon and eBay made massive inroads into his order book. Business dropped off and he was stuck with stock that was going out of fashion quicker than Megan Markle.


The warehouse next door became vacant, and if anything it was larger than his own. He had seen something on TV about fake companies, and thought he now had a way of digging himself out of the situation he found himself in. He bought an ‘off the shelf’ company under a false name, and described it as a distributor working with various importers and exporters. Companies House does no due diligence whatsoever so this was simplicity itself. Using the new company as a front, he hired the warehouse, stuck up a few signs outside and took out a phone contract and answering service. He then photoshopped invoices for his ‘real’ business totalling just over £800,000 and used these as collateral to approach four different factoring companies. These businesses basically advance you money on the strength of invoices awaiting payment. Obviously they charge for providing this service, but in these circumstances, that was never going to bother him. As a result he secured £550,000 in loans. The four companies lending him the money accepted the invoices without much hesitation -- and clearly without realising that those exact same invoices had been used to secure loans from elsewhere.


He took the money, fed it into his ‘real’ business and cleared his debts. His staff were happy and he knew he had at least put off the day when he would have to make them all redundant. The signs disappeared from the empty warehouse and his fake distribution business evaporated into thin air. If the Old Bill ever came knocking, he had a prepared story about still waiting to meet his new neighbours.


If things had ended there and then (and with my own perverted standards) I would probably have had a grudging respect for him. He had only cheated other businesses, who themselves were charging extortionate fees, and/or who had not done whatever due diligence was necessary to protect themselves. However, he got greedy.


His wife splashed out on a new car and a vulgar watch for herself and each of the kids, and before long he was heading back to ‘Poo City’ in a hurry He considered doing the fake invoice scam again as it had been so straightforward - and so lucrative. However, for whatever reason, he chose to do something different; he (again) hired the warehouse next door, through his own company this time, and put signs up explaining that business was so good he was expanding and needed more space. He was even interviewed by the local paper and feted as a role model for other entrepreneurs.


After two months of ‘trading,’ he staged a burglary and claimed that his new warehouse had been cleaned out in the middle of the night. He had bolt-cropped the padlocks on the shuttered loading bay and left enough packing cases strewn around the entrance to give credibility to his story. He acted crestfallen when interviewed by police. In reality, nothing had been stolen; he contacted the insurance company and filled in the necessary paperwork. A few days later a guy arrived from the insurers and inspected the empty warehouse, took a few photographs and spent over an hour taking him through the statement he had provided to police. He was sweating like Josef Fritzl appearing on ‘Through the Keyhole’ but managed to pull of the deception. A cheque for £180,000 from the insurance company duly arrived within a few weeks.


Unfortunately (for him at least) the story does not end there. About a month later, one of the forklift drivers from his factory accidentally clipped the bumper on his wife’s 4x4. She demanded her husband sack him, which he obediently did, rationalising that his ‘dangerous behaviour’ could have resulted in someone’s death and was therefore tantamount to gross misconduct. Rather than get legal advice regarding an Employment Tribunal, the forklift driver went straight to the Old Bill and told them about his suspicions. Our guy was arrested at home at 6am the following day, and this time he cracked during the interview. He admitted the false insurance claim and the invoice frauds and was sentenced to three years in prison. His wife immediately left him and within weeks was getting very friendly with a wealthy scrap metal dealer who was as strong as an ox and nearly as bright.


Organised Crime Groups

These guys have weaponised the crime of fraud. In my first entry, I described how Vasile and his team regularly rip the backside out of banks, exploiting the fact that they don’t talk to other banks - in fact branches of the same bank don’t even talk to each other! I need to be a little bit careful here because there are some parts of Eastern Europe where life is cheap and mine is valuable - to me at least. I’ve witnessed ‘justice’ being meted out to those who have been caught skimming a little off the top, rather than putting all of their ‘winnings’ into Vasile’s pot. An easy mistake to make, but not one you would repeat if you were caught.

As much as I would not dream of crossing Vasile, he is only middle-management. In reality, the senior executives enjoy enough visible separation from the ground troops not to have to worry about the local Old Bill. They divert profits from what many (including the old version of me) would consider to be a fairly harmless crime into many other activities. Those other activities: people trafficking, child prostitution and obviously the large-scale importation of drugs. So when someone describes fraud as a ‘victimless crime’ they are only trying to fool themselves.

52 views0 comments

Recent Posts

See All