Casino Fraud II

One of the more common types of fraud for casinos is comp fraud.

Comp fraud occurs when employees misuse authoired complimentary transactions for their personal gain. 

For example - if two people are having dinner and one person has a complimentary sevice voucher (comp) and the other is paying in cash.  The party with the comp pays $100 at dinner while the party paying cash pays $300.  A restaurant employee switches the two transactions by closing the cash check with the comp and pockets the $200.00.

More later.

Credit to Robert Randolph Jr. and Fraud magazine.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Casino Fraud I

We will spend the next few posts talking about casino fraud.  It may be hard to feel sorry for casinos, but any industry, including the gambling industry, can suffer from fraud and white-collar crime.

Some of the fraud experienced by casinos will be familiar to everyone and applies to all industries.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

More good TV

Another good show on CNBC - this one is peripherally attached with white collar crime, but an excellent show:

http://www.cnbc.com/id/42767515

No, I am not on CNBC's payroll.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Good TV

Most readers of this blog know that I am a fan of the TV show "American Greed" on CNBC.  Aside from being entertaining, the program also has a very good explanation of most white-collar fraud schemes.

So - although I don't watch TV very much, I reccomend this series highly.

http://en.wikipedia.org/wiki/American_Greed

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Health Care Fraud in San Antonio

Health Care Fraud charges in the Western District of Texas (San Antonio)

http://www.justice.gov/usao/txw/press_releases/2012/Tejas%20Ambulance%20SA%20indictment.pdf

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Tax Evasion in Northern Texas

Tax Evasion in the Northern District of Texas

http://www.justice.gov/usao/txn/PressRelease/2012/SEP2012/sep21kyle_jack_tax_evasion_sen.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

Tax Crime in the Eastern District of Texas

Tax crime in the Eastern District of Texas

http://www.justice.gov/usao/txe/News/2012/edtx-tax-peters-090712.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Tax Fraud involving attorney in San Francisco?

The banner has a question mark after it because there is an interesting case developing in San Francisco.  Tax fraud charges were filed against an attorney in San Francisco but the real story seems to be the attorney client privilege.

http://www.law.com/jsp/ca/PubArticleCA.jsp?id=1202571837534

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Another Sentencing in the Allen Stanford case

Yet another bit of fallout from the former financial wizard.

http://www.justice.gov/usao/txs/1News/Releases/2012%20September/120913%20Pendergest-Holt.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Sentencing in Related R. Stanford Case

Although R. Allen Stanford is sentenced, the fallout from his conviction still resonates.

http://www.justice.gov/usao/txs/1News/Releases/2012%20September/120913%20Pendergest-Holt.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's 3 Rules Regarding Fraud

OK - it's been a busy few weeks in the world of fraud so we are going to move on and for the next few days just post some news stories about white-collar criminals (and, as usual, there are no shortage of those).

So, as a recap -  the three rules of fraud are the basic analysis I use whenever I am asked to review a fraud situation or am presented with an "investment opportunity of a lifetime."  They have always served me well.  These are not the end-all-to-be-all of fraud examination, but as I said, they work well for me and I feel kind of honored as being in the same place (sort of) as Sir Isaac Newton, Sir Arthur C. Clarke and Larry Niven.

And, for those who ask: Larry Niven and Sir Arthur C. Clarke are and were great science-fiction writers.

If you don't know about Sir Isaac Newton, sue your high school teachers.

RULES:

1. If it sounds too good to be true, it probably is
2.  If you can't explain to me in two minutes or less the investment or money making idea, I'm not interested
3. Remember the parable of the chessboard.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's 3 Rules Regarding Fraud

OK - let's get back to the chessboard analogy.

Remember - if someone promises an investment that doubles in value every month, the logical question to ask is - when will the investment simply consume all the money in the world? 

If I invest $10,000 in an investment that promises a fantastic rate of return, then for how long can this rate of return continue?  Suppose, for example, I am told that I can double my money in one year.  So - within 12 months, I now have $20,000.  I leave the money in the account.  The next year, I have $40,000.  Year 3 I have $80,000.  Year 4 $160,000.  Year 5 $320,000.  Year 6 - $640,000.  Year 7 - $1,280,000.

So, an investment of $10,000 within 7 years is now worth more than a million.  Quite an impressive rate of return. 

Quite better than stocks, which historically have brought an average rate of return of about 10% per year.  So, an average stock return will bring me $1000 after my one year of investment, while a "fantastic" investment will bring me $10,000.

You can start to see the problems we face here.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's Three Rules Regarding Fraud

Let's talk about the chessboard analogy.  Remember, when you place one penny on the first square of the chessboard, and double it every square, you end up with more money than most economies.

I use the chessboard analogy to demonstrate a point - many fraudulent investment schemes offer interest rates that promise some fantastic rate of return.  20%!  30% per annum.

This is like the chessboard analogy.  If an investment is offering that fantastic a rate of return, there is something wrong.  Just like the chessboard, if you keep up this rate of return, eventually you will have a situation where there is not enough money in the world to support it.  It literally becomes economically impossible to have this kind of constant, growing investment without violating the laws of economics.

More on this later.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's Three Rules Regarding Fraud

Let's talk about the second rule for a minute - if the person can't explain something to me in two minutes or less (regarding an investment or a money-making idea), my skepticism radar immediately kicks in.

     Most people can describe how they make their money in fairly simple terms such as:

1.  I earn X amount per year from my job
2.  I invested money in X bond or X stock or X investment portfolio or X mutual fund
3.  I lent money to Uncle Bill who took it and started his auto repair shop.  He is paying me back at 5% interest
4.  I played the blackjack tables at Vegas and came out ahead.


     You get the idea.

    An excellent TV show to watch concerning fraud and con games is "American Greed" on CNBC.  It is amazing to me as I watch this program how many people are taken in by schemes which require at least ten minutes to go over the basics, not to mention the time required for a more in-depth analysis.

   More on this later. 

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's Three Laws Regarding Fraud

OK - back to Rule 1 - if it sounds too good to be true, it probably is.

     We have discussed this previously, but one of the tactics of fraudsters is to prey on a target's fears and hopes.  We all HOPE to make money and and we are all AFRAID that we will not have enough money for what we want in life.  Obviously, a fraudster uses the false hope of a quick profit, or at the very least the idea that we can "outsmart the market" or "show up the experts" is an alluring thought.

     Keep this in mind, however, whenever examining a statement about investments or any kind of money-making venture.  There are very, very rare cases of people making money overnight.  But, even the best investments (think: Apple), can take years to fully pay off.  If someone is telling you that you can make (a) a great deal of money (b) in a very short amount of time, there should be some questions in your mind.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's Three Rules Regarding Fraud

OK - let's go back to Rule 1 -

If something sounds too good to be true, it probably is.

     As I said in the beginning, this is not original.  But when it comes to discussing fraud, it is paramount.

     Let's face it, most fraud schemes are motivated by the target's greed.  Everyone wants to make money.  A fraudster promises the target the opportunity to earn a great deal of money in a short period of time.  This is the "hook" that get's the target's attention. 

     However, it has been my experience that if the target were to take a step back and just examine the offer being made by the fraudster, most target's would have second thoughts about the whole thing.

More on this later.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's Three Rules Regarding Fraud

OK - so what is the parable of the chessboard?

     Back in 4th grade, lo these many years ago, my teacher asked the class the following question:

"What is more profitable?  To get $10,000.00 (TEN THOUSAND DOLLARS) immediately or get a chessboard, start with a penny on the first square, and this doubles every square?"

So - a chessboard is an 8x8 grid which has 64 squares (I know mathmeticians can argue as to how many squares by using math logic, but for the rest of us let's just leave it at 64).

So, you start with a penny on square 1, which becomes 2 cents on square 2, which becomes 4 cents on square 3, which becomes 16 cents on square 4......and so on.

Long story short, it is MUCH more profitable to start with one penny on the square of the chessboard and double it every time.  So much more profitable, in fact, that there is not enough money in the U.S. to pay you at the end.

It was an interesting lesson on how multiplication works.  It is also an interesting lesson in economics.

What does this have to do with fraud?

Tune in tommorrow.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's Three Rules Regarding Fraud

OK - the third rule

"Always remember the parable of the chessboard."

What does this mean?  We will discuss this tommorrow.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's Three Rules Regarding Fraud

OK - so, what is next:

Gene's Rule 2:  If you can't explain how my investment is supposed to make money for me in two minutes or less, I'm not interested.

     Fraud schemes generally have one thing in common - the fraudster has a long explanation as to how the money will be made.  If I invest in a stock or bond, it's pretty simple to explain how I am making money.  If I invest in a factory, then I invest in a factory.  If I lend money to someone, it is clear what is my rate of return.

    Fraud schemes, however, usually have some harebrained or zigzag or outright loony explanation ("I have a formula for playing the market that no one else knows") that is a dead giveaway.  And, the time it takes to explain these moneymaking "ideas" usually runs at least 10 minutes, if not more.

In my book, you have two minutes to explain it to me. More than that, something is up.

More on this later.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Gene's Three Rules regarding Fraud

I mentioned sometime in an earlier post that since this is my blog, I can pretty well post what I please.  I am going to take advantage of this lack of editorial control to spend some time examining what I call Gene's Three Rules of Fraud.

Why three rules?  Well, three rules (or laws) were good enough for Sir Isaac Newton, Sir Arthur C. Clarke and Larry Niven, so I guess they are good enough for me. 

So, without further introduction:

 

RULE 1:  If it sounds to good to be true, it probably is.

 

No major points for originality there, but when it comes to fraud schemes, this is always worth remembering.  If someone is promising a 10% annual rate of return when the average is 2% as an investment, the would-be investor should be paying attention and Rule 1 should always be in the back of the investor's mind. 

 

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Dr. Henry Jones - Master Fraudster

Interesting Wikipedia article on Dr. Henry Jones who ran a massive fraud scheme.

http://en.wikipedia.org/wiki/Tri_Energy

We will probably be analyzing this in depth for a future article.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Credit/Debit Card Fraud

Credit/Debt Card Fraud in the Southern District

http://www.justice.gov/usao/txs/1News/Releases/2012%20August/120830%20Wong.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Conspiracy to distribute false pharmaceuticals

Conspiracy to distribute false pharmaceuticals in the Northern District of Texas

http://www.justice.gov/usao/txn/PressRelease/2012/AUG2012/aug23jones_carles_anthony_arrest.html

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

More on the El Paso corruption case

Additional sentencing with the El Paso corruption case

http://www.justice.gov/usao/txw/press_releases/2012/EP%20Corruption_Jones%20Sanchez%20sentencing2.pdf

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk