Most frauds would try to imply lower margins. If the company were totally fraudulent, why wouldn't they try to show a much higher cost of growth, therefore they could show impressive growth, but with more needed capital, therefore they could justify multiple secondaries, rather than a dividend.. Frauds look for ways to get more money from investors, not give it back..having "too good to be true" margins and earnings does not help them accomplish getting more money from the investor base. It just doesn't make sense.