The American Dilemma and How We Can Fix It

Posts tagged ‘Fraud’


The FBI has nabbed a small coterie of perpetrators who have been making money the old fashioned way – they steal it.  Apparently, they stole quite a lot – about $200 Million by creating false identities, creating fake credit scores and have socked it to the credit card-issuing banks.  While this number pales in comparison to the amount that our Federal Reserve adds to our national credit card, nevertheless, it is not an insignificant sum by almost anyone’s standards.

Given the way that we bend over backward to accommodate our Muslim citizens – that is if Babar Qureshi and Muhammad Shafiq are both Muslims and citizens – I’m merely inferring their religion from their names – I must confess that I’m a little surprised that they were arrested in their resident New Jersey.  The unlikelihood of their engaging in such an activity flies directly in the face of their faith.

As you know, credit card issuers stipulate an interest rate on unpaid balances.  That rate of interest is carefully detailed in the little enclosures that come with your credit card and for which you need an electron microscope to be able to read all the terms and conditions.  What you may not know is that it is forbidden in Islam to engage in a transaction at a specific, fixed rate of interest.

Of course, it is another tenet of Islam that is is perfectly acceptable to lie, steal from, cheat or otherwise engage in any activity against the infidel – including murder – if it supports the advancement of the cause of Islam.  So, since apparently these thieves had no intention of actually paying for anything that they purchased or the cash advances they received, I suppose the second tenet overrides that vexatious fixed interest rate thing.

I am sure there will be those of the OWS mindless-set who applaud anything that hurts the profits of big banking – while at the same time they are writing an elegy to the impoverished, oppressed and misunderstood of our Muslim neighbors.  Well, buckaroos and members of the Peanut Gallery, the people who ultimately feel the impact of this type of rip off are not the banks but their credit card customers.

It’s simple economics.  Those banks which suffered the injury will pass along the costs to their cad holders through higher interest charges and other penalties.  They will also write off the loss immediately, resulting in lower corporate taxes collected by the Treasury – at a time where we have President Obama and the Dems complaining that we need more revenues.

The events of 9/11/01 were devastating.  But with economic jihad we’re not talking about taking the lives of a few thousand people.  Economic jihadists are directly affecting the life-styles of millions of Americans  In a left-handed complimentary way, let me say that this is far more effective than crashing airplanes into buildings.  But, of course, it is far less sensational and for that reason will probably not get the attention it deserves as a part of the master plan of jihad.

That plan is simply this.  By whatever means necessary, to supplant Western civilization with its own world view; to bring the entire world under the yoke of the political philosophy of Islam; to establish Sharia law in all lands; to take no prisoners.

Those in Europe are learning, perhaps too late, that the Muslim infestation is reaching the same critical mass that in the United States we have reached with our permanent underclass.  It’s more than overdue that our politicians on this side of the pond stopped being accommodative and started being proactive while there is still time.  The sand in the hour glass is running very low.



If you start your own business or work for one that someone else just began, the importance of individual accountability moves out of classroom theory into real world fact.  When you’re doing the work, paying the bills, trying to develop new customers, your life is literally on the line.  And if you have one or two employees helping you it is pretty obvious who is pulling his weight and who is not.

Things go well and a few years later you’ve been able to add a few more employees, and then yet more.  All of a sudden it’s harder for you to monitor how your employees are meeting their goals – and it is easier for them to shirk some of their responsibilities because a larger staff means greater anonymity.  This is a case where size really does matter.

Speaking from experience, the larger the staff size grows arithmetically, the number the problems increase geometrically.   So how do we address this issue?

The normal procedure is that we move from being a hands on supervisor and we start developing policies and procedures.  We take from our experience and write down ways that can enhance the good ones and we look to avoid repeating those that led to poor results.

Then we start to build an infrastructure of employees whom we trust to be able to oversee certain parts of our business to which we cannot devote our full attention.  The successful business owner/manager will, as part of this process develop ways to measure how effectively his employees, both supervisors and those she supervises are doing.

Accountability is essential in this process.

But what if you have an organization that does not have accountability?  What if your employees get paid their regular check whether they do an exceptional or poor job in performing their duties?  In private industry you ultimately have a company that is going to lose market share and if the problem grows large enough, you have a company that ceases to exist.

In government you have the IRS.

A recent story in Yahoo News describes how a huge organization like the IRS can let Billions of dollars get refunded through an identity theft scheme.  Apparently, this is not all that complicated to concoct as their estimate is that 1.5 million fraudulent claims for refunds are going to be processed by that agency.  The story suggests that the IRS may have paid out more than $5 Billion in fraudulent refund requests in 2011 alone.

When people are motivated they will always find ways to “game” the system.  Sadly, that is the nature of some of us and probably always will be.  I do not expect that the IRS, any other government agency or even for-profit corporations will be able to detect and catch all fraud.  But look at these examples of how egregious some of these refund requests were.  Even a novice bookkeeper should have caught some of these.

“In one example, investigators found a single address in Lansing, Mich., that was used to file 2,137 separate tax returns. The IRS issued more than $3.3 million in refunds to that address. Three addresses in Florida, the epicenter of the identity theft crisis, filed more than 500 returns totaling more than $1 million in refunds for each address.”

“In another troubling scenario, hundreds of refunds were deposited into the same bank account — a red flag for investigators searching for ID thieves who may be filing for refunds for multiple people. In one instance, the IRS deposited 590 refunds totaling more than $900,000 into one account.”

“We found multiple reasons for the IRS’s inability to detect billions of dollars in fraud,” J. Russell George, the Treasury Department’s inspector general for tax administration, said in a statement. “At a time when every dollar counts, these results are extremely troubling.”

For a real life look at how inefficiency runs rampant within this tax collection agency, I refer you to an earlier post.  Everything described in that post happened exactly as I described, (because I am not sufficiently creative to make any of it up).

This story gives new meaning to the old phrase, “Hi, I’m with the IRS and I’m here to help you.”  From the size and amount of the fraudulent refunds being issued, I guess they are fulfilling their mission – at your expense and mine.

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