Hd Control

The Con

It’s a great time to be a white-collar crook especially in Los Angeles, the undisputed capital for white-collar scamming. Think of all the high-tech gadgetry laptops, cell phones, pagers and the like that has made it so much easier to make the mark, do the con and steer clear of authorities. Think, also, of how the Internet has created untold opportunities for fraud, ranging from old-fashioned boiler-room schemes to elaborate stock swindles.

And while you’re thinking those unnerving thoughts, consider the paltry number of law enforcement types available to track down these no-goodnicks and then put them behind bars.

We should be outraged when the California Department of Corporations reports receiving 4,649 fraud complaints in 1997 but only 15 criminal proceedings and 21 convictions. And yet, statistics of this sort have outraged us many times before. The more con games change, the more they stay the same.

Part of the problem can be illustrated by the current controversy over a proposed rule by the Federal Deposit Insurance Corp. that instructs banks on how to detect signs of money laundering from their customers.

The proposal would allow banks to verify customer identities and sources of income and then monitor accounts for unusual transactions that could involve white-collar skullduggery.

While this kind of information could prove valuable for police, the FBI and the IRS, civil libertarians are crying foul. Just published a few days ago, the proposal already has elicited 3,000 complaints (though many are from those who believe the monitoring is part of a deeper, darker federal conspiracy).

Whenever there is a choice between individual freedoms and stepped-up law enforcement, Americans tend to side with individual rights and quite appropriately. (The one exception involves terrorist attacks and other threats to national security and even here opinion is divided.)

The reason Americans are not willing to have cops rifle through our personal affairs in an effort to track down white-collar criminals is that, for all the misdeeds, white-collar crime doesn’t have an overt social cost. Even Richard Wade, the FBI’s top local official in charge of white-collar crime, acknowledged last week that “it is mostly a hidden cost. Very few white-collar crimes really impact directly on individuals. With the major exception of telemarketing and other related fraud schemes, the vast portion of the impact is on business.”

Those businesses sometimes pass on the cost to their customers, of course, but the net effect is seldom enough to cause any backlash. And why would it? A business would be shooting itself in the foot if it passed on too much.

So the scammers win at least many of them do. Bankruptcy trustees unknowingly sign off on countless numbers of fraudulent filings. Visa and MasterCard suck up countless numbers of fraudulent charges. And all over Los Angeles, the scamming capital of the world, a limited number of agents, prosecutors and police officers desperately try to keep it all from getting out of control.

Ultimately, the only real answer is self-enforcement. Con artists typically prey on those after the fast buck. Just a small bit of due diligence in determining where that buck is coming from can go a long way in thwarting the thieves. It’s not terribly high-tech and it doesn’t involve an army of agents, but it will get the job done.