Ep 6: Nice Frauds

Fraud always involves deception but all frauds, though deceptive, may not be illegal, necessarily.  Think about that deceptive romantic partner, even someone from your past, perhaps.  Isn’t that looser finally behind bars, one might ask rhetorically—even humorously?

Well, some such frauds—cynically—might even be labeled “nice frauds.”  That’s because the Perp—the fraud’s perpetrator—calculates they can pull it off without suffering much, if at all.  It’s so-called nice, of course, because society chooses merely to look the other way.    

Still other frauds may be declared illegal, but then often not enforced.  If you steal grandma’s cookie jar stash, for instance, prosecution may be anything but certain, unless of course, grandma presses charges.

This is what so-called nice fraud looks like in my life, recently.  A rep, I’ll call him, from a locator service—and operating on commission—messaged an apartment suggestion to me.  

However, I found the complex on my own—on Craig’s list—visited and began the sign up process even before the rep sent his email.    

Even when notified by the apartment manager he was not eligible to claim a referral commission, he persisted.  Why not?  He might get lucky, if he could wear her down, he may have surmised.  Ultimately, perhaps she might pay him merely to get rid of him.   

Fortunately, she did not.  If the manager had paid, as happens on occasion, then the fraudulent fee might have been passed on in higher prices to all customers, merely as a cost of doing business.    

My maternal grandfather, a water commissioner in the old West, would not have understood.  Charles would not have understood how standards for defining and prosecuting fraud have evolved in such murky ways.  

For instance, making a so-called killing by trading in irrigation water—a commodity unchanged from Grandpa’s day—may now be accompanied by time in the slammer.  Grandpa would be scratching his head.  No doubt, also, he wouldn’t comprehend how widespread financial fraud of the sort triggering the Great Recession, largely has gone unprosecuted.      

Grandpa’s life work included some time in the trenches, so to speak, as irrigation ditch rider, on horseback and on bumpy dirt roads in an old Model T.     

Fast forward to Norman Armstead, recently fired as a rider for the White Rock Ditch Company.  His uncle William, now also looking for work, had been superintendent of a rural ditch company.  Together, they have been charged with stealing over $800K.  

When interviewed, the Daily Camera reports Norman admitted to buying water restricted for agricultural use, for $30 an acre foot.  Then he rerouted it from the City of Boulder, to a fracking water supplier where he collected $2700 an acre foot, for use in well drilling operations.  

That’s a tidy profit!  Moral philosopher Adam Smith would cringe, however, at calling this scam, profit.  When confronted about why he was selling scarce farm water for fracking, marked up over 90 times, Norman Armstead reportedly responded:  Who wouldn’t?  

Well, for one, Grandfather wouldn’t.  But, more on that, later.  In the meantime, check out Capitalism in Crisis on the Web.

From Boulder, Colorado, this is Jim Sawyer for Capitalism in Crisis. Org