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Americans Scamming Americans

BY MICHAEL REISIG –

The truth is, man has been defrauding man since the first cave dweller offered his companion a phony stone talisman for a haunch of bison. Some of the earliest chicanery in America focused on health cures. Snake oil scams began as soon as the Pilgrims landed on Plymouth Rock.  Medical frauds ranging from deceptive medicines and spiritual cures, to bloodletting expanded from there, to modern day cancer miracle cures and Internet charlatanism. Once we started cheating each other we never looked back.

Wall Street scandals in stock selling led to the Crash of 1929, and ended the laissez-faire policy of government toward unregulated buying and selling of corporate ownership shares. But that didn’t slow down our need to con at all. Corporations and individuals just found other ways. Then, when we started giving money away – to the poor and the needy, someone immediately found a way to take advantage of that.

While the general consensus is that welfare fraud is a major issue, advocates for welfare programs tell us that fraud is only found in two or three percent of cases researched by welfare investigators across the nation.  But anyone with half a brain knows that’s only the tip of the iceberg. The problem is, there isn’t any way to accurately substantiate percentages of fraud in this, and no one in their right mind is going to willingly report to census takers that they’re scamming the government, so all we know about are the stupid ones who were caught.

As to the two or three percent being negligible, according to the 2010 US Census Bureau findings, there are 114.8 million families in the US.  With 34.2% of US families “on welfare” this means that approximately 39.3 million homes were receiving monthly welfare benefits.  The government estimated spending $451.9 billion in 2012 on welfare expenditures. This averages out to roughly $11,500 annually per family or $958 per family per month.  Even if the fraud rate is only 2 to 3 percent, that would mean about 785,000 to 1.2 million families are illegally receiving welfare benefits.  At the average rate of $11,500 per year, this means taxpayers are being scammed out of roughly $9 to $13.5 billion dollars every year. I don’t know about you, but to me, that’s a lot of money.

Then of course, there’s tax fraud. It’s another one of those things to which we generally turn a blind eye. What the heck, everyone does it, huh? But few of us understand that tax fraud is a big, organized business in certain areas of the country. It is estimated that in 2010 alone, $305 billion dollars were lost to tax fraud. The following is a list of the number one cities for tax fraud in the United States: Chicago, New York, Washington D.C., Los Angeles, Birmingham, Atlanta, and Miami. I’ll avoid drawing any social parallels here.

We are deluged by scams that steal money from Americans every minute of the day – identity theft, phishing, hiding income, Social Security scams, charity imposters, false 1099 returns, and frivolous lawsuits against businesses and individuals. But it doesn’t stop there. Even our own military is in the thick of it. An Army program meant to increase the number of recruits during the Iraq and Afghanistan wars dissolved into a long-running, illegal scheme among National Guard recruiters that went undetected for years. It cost taxpayers millions, military investigators say. Army officials eventually appeared before a Senate hearing and explained a complex criminal endeavor that implicated more than 1,200 people — hundreds of them officers — including two generals and dozens of colonels. Criminal investigators for the Army said soldiers, civilians and National Guard recruiters had used the program as a “bounty” from which they could illegally collect money for recruiting soldiers they had not recruited. All told the scam may reach numbers as high as $100 million.

It wasn’t but a short time ago that the government urged that Bank of America pay $863.6 million in damages after a federal jury found it liable for fraud over defective mortgages sold by its Countrywide unit. Bank of America and Mairone were each found liable for defrauding government-controlled mortgage companies Fannie Mae and Freddie Mac through the sale of shoddy loans purchased from Countrywide in 2007 and 2008. These are names of organizations we’re supposed to be able to trust…

All of these dastardly schemes suck the life from a failing economy and a struggling nation – reducing our ability to survive as a solvent country – all in the name of the almighty dollar bill.

I’ll leave you with a quote by Sophocles: “Better to fail with honor than succeed by fraud.”

The views and opinions expressed in this column do not necessarily reflect the views and opinions of the ownership and staff of The Polk County Pulse. Michael Reisig is a freelance writer and published author whose works are reproduced throughout the globe.

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