Google: Anatomy of this Company's Fraud
Life Lessons 101: How to Spot a Fraud JesseL
NEW 5/21/2005 10:33:06 PM
Post Your Reply prudentbear.chat
In the course of my years of business, in both the technical fields and business development, I have come across a few
A fraud comes in many forms but they generally have one or two characteristics that mark them.
1. One of the most common is resort to 'special knowledge' that they have from some source.
a. The identification of this knowledge is always obscure, mysterious, vague.
b.Its linkages to real data are always indirect.
c.You will never be able to get them to explain what it is that they 'know' because they don't know it; it doesn't exist.
d. Its a secret mechanism, and inside source, something that sets them apart as special.
e. There will be an piling of 'facts' to counter any argument, quotes from a variety of sources, testimonials
f. There may be specific demonstrations of predictin events with a 50 - 50 chance of occurring at worst. The human mind is remarkably blind to statistics, forgetting or dismissing 'misses' and chiseling 'hits' in stone.
2. Changing the subject, misdirection
a. Its frustrating to try and argue down a fraud because they are engaged in a fundamentally dishonest activity, so their 'discussion' will not be straightforward. Changing the subject, falsifying claims, red herring issues, and when finally cornered, the personal attacks on accusers, are all hallmarks.
b. Significant personal problems. Oftentimes a fraud has some large failures in their past, most likely recent past, that have set them off on the road of deceit, because they feel that life has broken the bond of honesty with them first. It could be anything from a failure to achieve a promotion, to a broken personal relationship, to a failed business.
There is always some 'tell,' some misstep, something that does not seem right, a false connection that tips you off that things were not as they appeared to be that later on you say "Oh yeah I thought so!" For example, Enron's commercials were a dead tip off that it was a fraud. An employee gets the idea for double hulled oil tankers from two coffee cups, and Enron revolutionizes the business. HELLO? Did you believe that one? The series about using the idle bandwidth under the ocean for communications and making a market in it when no one else could do it was another. Notice they never give any real details, show any real results, just allude to their 'superior insights.' I knew the bandwidth business cold, and I knew they weren't doing a damn thing in it.
Yes sometimes people do get a better insight, but normally it makes sense and they can explain WHY without getting all hot and bothered and changing the subject or lashing out in some fake emotional tizzy.
Most of the 'frauds' you will meet in life are amateurs, usually regular people or companies that get in too deep, go down the path of deception too far to back out, and so instead go for it with all their energy. They usually have not really thought it out ahead of time.
The ones to really watch out for are the professional grifters. I have only met two in my life. They have thought it out. They are emotionally indifferent to whatever happens to you. They just want your money, they don't care one way or the other. I got stuck once, the second time I spotted the scam. There have been others since, but they've been brushed off easily. There is only one real defense against the professional grifter...
"If it sounds too good to be true, it isn't. If it can't bear the light of day, run away."
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