THREE SHADES OF FRAUD

Who knows what evil lurks in the hearts of men. The Shadow knows.

There is unquestionably a streak of evil in many. Evil manifests itself in degrees. Some evil being more serious than others.

One example is fraud. Fraud has many definitions. Generally, fraud can be defined as deceit perpetuated for profit or gain or to damage another. Deceit.....for profit or gain.

This article concerns itself with three examples.

In recent days, Subway has been in the news. Subway and its footlong sandwiches. Subway refers to them as the "Subway Footlong."

Subway's problem was discovered when an Australian teenager measured a Subway sandwich. It was only 11 inches long. He told people. The international news soon picked it up. People all over the world started measuring Subway sandwiches. All came up with the same result. Eleven inches, not 12.

An inch can be worth millions of dollars to a company such as Subway.

Instead of owning up and saying sorry, Subway appears to be stonewalling. A Subway representative issued a statement that the term footlong was was merely descriptive and not intended to describe length.

Tell me another story! How stupid!

Again, Subway should have immediately stepped up, said sorry and most importantly that the problem was being corrected. Then it should have followed up the mea culpa announcement with a further one offering some sort of bargain to its customers for a period of time.

It would not surprise me if this breach of trust costs Subway a reduction in sales for a while.

Lets move on to prisoners. Persons in jail. People like murders, thieves, child abusers, molesters and the like. Ingenuity recently evidenced itself within the jail population.

It was recently reported that persons in jail have been filing tax returns seeking refunds. Fraudulent returns. In some instances, false names were used. In others, another person's Social Security number. Initially, some inmates were successful in receiving refund checks.

For the taxable year 2011, 173,000 fraudulent tax returns were filed by those in jail. That was twice as many as had been filed in 2010. The word was spreading.

If any federal agency is diligent, it is the IRS. They caught on to the scheme. The IRS saved $2.5 billion in refunds by discovering the false returns filed in 2011.

The ingenuity of the bad guys who originally thought up the scheme is to be complimented. I would also make the observation that it is too bad their genius before and during jail was not exercised in a legitimate fashion. Honest men have been known to make money.

This article would be remiss if banks were not mentioned.

Montepaschi Bank is Italy's oldest bank. Strong in assets and character. Till recently.

Montepaschi is becoming the Lehman Brothers of Italy. Scandal has befallen the Bank.

The situation is different from Lehman Brothers and at the same time similar.

Three top level managers were involved with hedge funds and the like. They were investing Montepaschi monies in complex and complicated business dealings. To the detriment of the Bank, the Bank's shareholders, and soon perhaps its depositors.

The deals entered into lost the Bank $300 million in 2012 alone. Last week the Bank's shares dropped to $ .31 a share.

Montepaschi needs a bailout. It is seeking one from the Italian government. To the tune of $667 million. Apparently there is more involved than the $300 million 2012 loss.

The joke in all this is that the Italian government is broke. They are right behind Greece with a teetering economy. Germany is on Italy's ass to repay Eurobank loans. Thus far Italy has not been able to do so.

The cry is that Montepaschi is too old and too big to fail. Giants fell in the United States. Again, remember Lehman Brothers.

Deceit perpetrated for profit or gain. Seems to apply to Subway, the inmates, and Montepaschi.

Since the preparation of this article, the Bank's bailout request
has risen to $5.2 billion. The Bank's losses are now projected at $1
billion. A knowledgeable person said the problem has arisen because of
"...risky deals hidden from regulators."

It never ends.