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For Book: Big Fraud Scheme
Old 11-19-2016, 03:15 PM   #1
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For Book: Big Fraud Scheme

I watched Chasing Madoff recently.



As you probably know, for a decade, this one guy (Harry Markopolos) kept presenting evidence to the SEC about the fraud he detected, but no one would listen. The movie was satisfying because it finally turned out that Markopolos was right (although it wasn't his evidence that blew the lid off things).

Anyway, my next book is about a political candidate who has a big fraud scheme going, and tries to hide it. I want to use the same idea of someone trying, unsuccessfully, to get the SEC to pay attention.

I might make it a Ponzi scheme, but I'd like to think of a different type of fraud. It has to be big, and it has to involve the candidate hiring bad guys to find and destroy information, and kill people who know too much.

Any ideas?
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Old 11-19-2016, 03:24 PM   #2
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Just make sure one of the businesses is a financial internet forum that starts with no ads, then more ads, then lots and lots of ads. All useful content is provided free by the participants and they even get unpaid moderators to police the joint.
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Old 11-19-2016, 03:24 PM   #3
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Bwahahahaha!
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Old 11-19-2016, 03:39 PM   #4
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It doesn't have to be just one crime, there can be many intermingled. Such as sure, a Ponzi scheme, but how about buying a pharmaceutical company and then raising drug prices 300%? That's certainly believable! Buying fixer-upper houses and doing crappy repairs before selling? Selling houses you don't own? (I really had a case like that.) Selling the same house three times in one day? (Another case I had.) Instead of houses, make it office buildings.

Go further and make it international in scope. That can make things pretty tangled.
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Old 11-19-2016, 05:20 PM   #5
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Medicaid billing fraud is huge.

http://www.nytimes.com/2015/04/01/ny...ents.html?_r=0

https://archives.fbi.gov/archives/wa...dicaid-program

Or perhaps fraud in defense contracting.

https://www.justice.gov/opa/pr/defen...ps-afghanistan

The All-Time 10 Worst Military Contracting Boondoggles | Mother Jones


The defense contracting area seems more fertile grounds for murder for hire and the like.
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Old 11-19-2016, 05:42 PM   #6
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Easy--campaign fund fraud. Google it for lots of examples. Not an SEC issue perhaps but pretty easy to get away with.
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Old 11-19-2016, 05:56 PM   #7
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What about something directly related to an election, like manipulating electronic voting machines? Instead of the SEC, the whistle blower tried going to various election commissions. Would only need a few key players to pull off such a crime, and a few well placed operatives (such as 1 person per county in a few key counties that actually receive the machines on voting night, who would secretly upload a special patch from a USB drive, or otherwise manipulate the machines). So wouldn't need to kill off hundreds of people to maintain silence - just a dozen.

And maybe have a completely unrelated item eventually bring all of it to light....like maybe someone uploaded the 'instruction video' to the cloud for these operatives to watch and learn what to do to pull off the crime....and then, while passing time on election day, one of the operatives surfs to some porn site and downloads a virus. The virus let some hacker in Nigeria gain access to the system....who then discovered the videos that the account had on the cloud.

The Nigerian hacker tried doing a good deed by contacting the election commission multiple times, only to be ignored (with the Nigerian's e-mails in the typical broken English that you see in scam e-mails). When they finally are believed, they get a whistle blower award...and an awkward conversation ensues at the end of the novel, when a gov't official tries to wire the money to the Nigerian's bank account, and the bank employee thinks the gov't official has gone off the deep end for wanting to wire $100,000 to a Nigerian's bank account.
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Old 11-19-2016, 10:29 PM   #8
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Maybe have the protagonist (antagonist?) start a semi-fake university. Teaching, oh, I don't know, real estate investing or something outlandish. The fees are exorbitant, some even say huge! But in reality, the students just don't learn very much of anything while the owner collects a lot of $$. Of course in the end the fraud is uncovered and the owner of the university has to settle a lawsuit for tens of millions of dollars.
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Old 11-19-2016, 11:25 PM   #9
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Pay folks to buy life insurance, naming the company/guy as beneficiary, then the slime hires someone else to create accidental deaths in order to collect early.

Or business owner, who pretends to fund the pension plan, even extracting wage concessions from workers in return for the gold plating on the pension plan, then he has to start killing off retiree's once more than a few retire. Plus he keeps trying to convince workers to stay on the job just OMY.
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Old 11-20-2016, 01:56 AM   #10
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Someone slips a routine in the program running the treasury bond auction market, where large customers submit blind competitive bids against each other for the auction yields. They set it such that it appears to just be a rounding error...but when each auction involves billions of dollars for the 3 month/6 month/12 month/etc., just .0004% adds up to serious money time after time. The code was inserted on the Treasury's end - so while bidders like Merrill Lynch or Goldman Sachs or the Chinese Gov't submitted their bids at discounts to par of, for example, 98.093 for the price, the Treasury only actually received 98.0926 deposited into the Treasury account. The missing .0004 was diverted to an intermediary account, and then ultimately to someplace in the Caymans, or a Swiss Bank account, or maybe even Iran.

To help conceal it, the difference in yield between what was deposited into the Treasury's account and what the bidders actually bid on were then adjusted when the Treasury publishes the official results of the bond auction. Since it's a blind competitive bid, none of the other bidders (or the public) know what the other bidders ultimately paid, so only the Treasury officials seeing the bids could ever know something was up. Even if you used a calculator to check, the "discount price" doesn't instantly convert to a yield (i.e. you have to use a bit of number crunching to determine the equivalent yield on an annualized basis, which is what is published as the auction result). Since it's just a small fraction of a percent, unless you are extending things out to several decimal places, you aren't going to get a precise number. And even if you did check, the APY is only carried out to so many decimal places - multiply that APY by the hundreds of millions of $ from each bidder, and you will only get an approximation of what the Treasury "should have" received, since the APY the equation calculates is truncated - so that leftover yield could be manipulated, and explained away as "rounding error".
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Old 11-20-2016, 10:05 AM   #11
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A similar but different "rounding error" scheme, put in a rounding total at a major bank where the rounded off (actually truncated) interest is totaled up and added into a special account. No one notices that they "lost" 1/2 cent each month, but multiply that by tens of millions of accounts each month, and that adds up to some serious $$ (ten million accounts average "loss" of 1/2 cent per month is $50k per month. Do that to the top 10 banks and you have real money really fast). The protagonist can be a lowly programmer who is overlooked at his job, and when he is discovered, he can claim that he is trying to expose the evil money grabbers at the banks and had planned to give the money to the oppressed!
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Old 11-20-2016, 11:09 AM   #12
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A respected bestselling author is discovered trolling internet sites for plot ideas under an assumed name.

LOL! Sorry - couldn't resist.
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Old 11-20-2016, 11:18 AM   #13
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Quote:
Originally Posted by TromboneAl View Post
Anyway, my next book is about a political candidate who has a big fraud scheme going, and tries to hide it. I want to use the same idea of someone trying, unsuccessfully, to get the SEC to pay attention.
How about some Bitcoin fraud? It is a currency equivalent that is anonymous and untraceable and not produced under the auspices of a regulated agency. This makes it very difficult to investigate and lends itself to conspiracy theories.

The crime could be the politician is conspiring with a group of hackers to make fraudulent bitcoins. The politician wants to use the proceeds to finance political objectives, while the hackers want to destabilize the global economy.
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Old 11-20-2016, 11:42 AM   #14
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A similar but different "rounding error" scheme, put in a rounding total at a major bank where the rounded off (actually truncated) interest is totaled up and added into a special account. No one notices that they "lost" 1/2 cent each month, but multiply that by tens of millions of accounts each month, and that adds up to some serious $$ (ten million accounts average "loss" of 1/2 cent per month is $50k per month. Do that to the top 10 banks and you have real money really fast). The protagonist can be a lowly programmer who is overlooked at his job, and when he is discovered, he can claim that he is trying to expose the evil money grabbers at the banks and had planned to give the money to the oppressed!
They already made a movie out of that. Now where's my red stapler.
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For Book: Big Fraud Scheme
Old 11-20-2016, 12:18 PM   #15
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For Book: Big Fraud Scheme

The Homeland Security Industrial Complex
Government decides it needs to track its citizens for their own protection. They coerce private industry to cooperate by offering highly profitable incentives but the price for the tracking network is just too high until an evil genius suggests a way that the citizens will pay for the system voluntarily. It takes decades for the network to evolve as citizens slowly accept less privacy as the norm and multiple govt agencies and private companies carry out an elaborate scheme that only a very few individuals know to be highly orchestrated.
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Old 11-20-2016, 12:24 PM   #16
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Nice ideas, thanks. One of those will definitely be it.

Yes, It would make sense to have it be some kind of fraud related to the election.
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Old 11-20-2016, 01:14 PM   #17
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My new favorite campaign fraudster is former Rep. Aaron Schock of Peoria, indicted last week on 24 counts. He posed shirtless for the cover of Mens Health and decorated his DC office like a Downton Abbey set. Comic gold, even though I don't think you're going in that direction. On my list of favorite campaign fund hucksters, Schock overtook Jesse Jackson Jr., whose wife (also an elected official) also just got out of prison (she went in after JJJr served his sentence) for conspiracy in ongoing campaign fraud--and one of Jesse's illegal expenditures was jewelry for his mistress. Ouch. These people got caught--think of all the grey areas of fraud your bad guy could stray into.
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Old 11-20-2016, 02:34 PM   #18
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Fiction to mimic reality?

But, but, but we already have plenty of weird things in real life. When one reads fiction, I thought it is for an escape from reality.
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Old 11-20-2016, 06:31 PM   #19
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Aren't all the suggestions a bit of reality?
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Old 11-20-2016, 07:11 PM   #20
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...we already have plenty of weird things in real life.
Here's an example of real-life weirdness: Illegal Campaign Donation Scheme

It would take a skilled writer to turn this into a potboiler. Call it a challenge!
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