Criminals really are stupid

A businessman accused of being the mastermind behind an alleged £100m \’Ponzi\’ scheme was warned he faced a jail sentence after admitting charges of fraud and deception.

OK, this was a big one but Ponzis are hardly unusual.

I\’ve been invited into one or two even in my very limited business life.

But here\’s the stupidity:

Pruthi is alleged to have creamed off £38m from the fund for his own use between 2005 and 2008 when he was running Business Consulting International.

If you\’re running a Ponzi you\’ve got to know that you are. Pulling £38 million out of £100 million isn\’t something you do by chance or happenstance. And that does seem to be evidence that he didn\’t fall into the trap (ie, promise great returns through real investment opportunities, fail to make them then turn to the fraud as the original Charles Ponzi did).

So, having snaffled that £38 million why was he hanging around? There are plenty of places in this world where you can disappear with such sums after all.

That\’s the bit I never get with these things. The stupidity of not realising when to cut and run.

5 comments on “Criminals really are stupid

  1. Isn’t it just one of the most fundamental cognitive biases? That kind of earning power is addictive, you’ll always want a bit more.

  2. The original Mr. Ponzi did in fact spot a quite genuine investment opportunity – namely that internation postal warrants were mispriced, so that it was possible to buy postage stamps at a huge discount. Unfortunately, he was then swamped by a tidal wave of money that (with the technology of the day) was impossible to invest. So he stole it instead, which was far simpler!

  3. Richard & Rub a dub nail it. People never know when to stop, it’s the same pattern with people who steal from their employer, first it’s £100 “which they meaned to pay back” and next year it’s £1,000 and if they get away with that they nick £10,000 and so on, and they don’t get caught until they finally help themselves to £100,000. You read it all the time in the newspapers, and this is actually what happens in real life.

  4. I agree, everyone should have in their head the current value of “fuck you” money (refer Neal Stephenson’s “Cryptonomicon”), and it’s a lot less than 38 million quid. Once you hit that, you’re gone. Is it still Rio de Janeiro that is the jurisdiction of choice for avoiding extradition?

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