Fraud is harmful to the economic engines of our society and can completely destroy the small business aspirations and existence so vital to local economies when simple acts of bad faith between a seller representing something for sale to a buyer are fraudulent and wealth is generated from dishonesty over productivity. The wealth of effort in working the plow is lost to the effort of wielding the sword where only attorneys profit and the fruit in the field goes wasted and unharvested at the time of seasonal yield.
NPR recently did a piece examining fraud from the perspective of one person now doing time for their fraud asking the question about the psychology of fraud. Importantly in this piece we see how the lie that starts the fraud balloons and how more fraud and lies are committed to hide the first one to where it becomes a moral imperative to defend one’s actions in order not to be revealed. This is why folks will spend $100 to win a penny because it is about protecting the lie of the first crime not the money. Oddly, the people committing the fraud often find others to help them who genuinely believe they are helping the person. Doesn’t this description fit the model of ‘psychological enablers’ because instead of confronting the person they enforce and support the bad behavior. Yet, as we find with psychological experiments with social authority and conformity, the individual psychology is often pliable to the will of others if the appearance of authority is created and if the individual has no loyal ally to confront the group error.
The harmful part is the damage the fraud does to the buyer as corporation comprised of individuals and the community economically and psychologically when a public resource is involved.
Fraud at the Mine begins on April 27th 2017 when Mine Country 102.1FM was placed for sale. Initially all the pretenses are believable. A man in an answer to a prayer gets an opportunity to fulfill his dream to be a basketball coach and agrees to leave the state in 30 days and needs to sell a radio station that fell in to his lap from a widow after being hired as a sales person ninety days prior. It does happen legitimately. The buyer recognizes the short time frame required to complete the transition and being offered an affordable price to begin the endeavor engages in a sales agreement to purchase the radio station and release the seller to follow their dreams. The buyer makes the arrangements and together seller and buyer transfer the mining operation to the buyer’s control. The seller leaves the state to start a new job against the terms of his license. After faithfully making payments toward a two year term ending in July 2019 and transferring all expenses but one, it is time for the seller to transfer the license to the buyer and allow the last remaining expense and all liabilities for the station operation to transfer. Transferring the license is important to legitimize the sale and for the buyer to take on the full responsibilities of the station. The transfer will take 2 to 3 months and must be approved by the licensing body. The seller who has now received 37.5% of the sell price refuses and demands 62.5% of the sale price to fulfill his obligation. The next month the buyer with 62.5% in hand is now told they need 75% for the seller to comply. The buyer brings 75% and now the seller demands 100% and refuses again. At this point the buyer contacts the licensing agency, the licensing agency states the sale can’t be complete until it is reviewed, monies should be refunded to the buyer and a ‘plain as vanilla’ sales agreement should be filed with the ownership transfer request immediately and the form is attached to the response. If this is not done, the station should be taken off air or fines maybe levied. The seller is confronted with the email and requested to file the ownership transfer document which given the simplicity of the sale, takes less than an hour online to accomplish. The seller then demands an additional 12.5% above the sale price to comply with the request to fill out the form or he will take the station off-air.