- Four levels of abstraction for financial crime1:
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Long Firm - borrowing money and not paying it back or buying goods and not paying for them
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Counterfeiting - abusing the trust in ways ownership and value are verified by creating false documents
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Control fraud - when operators/managers extract value on the basis of fictious profits or unreal assets. This occurs as operation is separated from providing capital
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Market Crimes - for example cartels or insider dealing ring. The victim is the market itself rather than a given individual
A long firm makes you question whether you can trust anyone. A counterfeit makes you question the evidence of your eyes. A control fraud makes you question your trust in the institutions of society, and a market crime makes you question society itself. Since itâs impossible to run a modern economy without all four levels of trust, fraud is an insidious crime1.
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1. Davies, D. Lying for Money: How Legendary Frauds Reveal the Workings of Our World. (Profile Books, 2019).