Levi, Michael --- "The costs of fraud" [2013] ELECD 911; in Unger, Brigitte; van der Linde, Daan (eds), "Research Handbook on Money Laundering" (Edward Elgar Publishing, 2013) 68

Book Title: Research Handbook on Money Laundering

Editor(s): Unger, Brigitte; van der Linde, Daan

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9780857933997

Section: Chapter 6

Section Title: The costs of fraud

Author(s): Levi, Michael

Number of pages: 10

Abstract/Description:

Fraud is a deceptively simple word covering a very broad territory. It is a way of making money illegally via deception, whether that deception is directly person-to-person in real space or in virtual space; operates by false stories alone or via the use of deceptive real or e-documents or via Personal Identification Numbers; or uses genuine or phoney businesses as tools of fraud. Thus there is a huge range of contexts in which frauds, large and small, lasting milliseconds (like unauthorised electronic funds transfers) or many years (like the Madoff ‘Ponzi’ scheme), are perpetrated. Some are planned as scams from the start, sometimes as part of an ‘organised crime group’ activity; others – with or without the involvement of outsiders – are the result of insiders spotting system weaknesses which, if undetected, may spread from there into much larger schemes. After the event, it can be a matter of interpretation into which planning category any given fraud falls. But the level of harm may be independent of that level of planning, and many losses may have been generated by inefficient business activities and poor judgement rather than pure criminal profit: hence, in addition to clever laundering, the fact that such modest amounts are sometimes recovered from corporate losses.