International Law

Smart Heuristics

Posted on November 17, 2008
Image by Getty Images via DaylifeGood interview on some sophisticated thinking about risk, uncertainty and decision making."Isn't more information always better?" asks Gerd Gigerenzer. "Why else would bestsellers on how to make good decisions tell us to consider all pieces of information, weigh them carefully, and compute the optimal choice, preferably with the aid of a fancy statistical software package? In economics, Nobel prizes are regularly awarded for work that assumes that people make decisions as if they had perfect information and could compute the optimal solution for the problem at hand...

Vending Fraud in Canada

Posted on November 13, 2008
Image via WikipediaFrom the Mississauga News, there is story about a business opportunity fraud A 41-year-old Toronto man has been charged with defrauding Mississauga and other GTA residents of more than $800,000. York Regional Police say at least three Vancouver residents were swindled by the scam, which ran from the summer of 2007 to the spring of 2008...

Franchise Fraud Loans

Posted on November 13, 2008
Image via Wikipedia A man was sentenced to 10 years in prison Thursday for the worst single case of loan fraud at the U.S. Small Business Administration, a scheme to provide federally guaranteed financing to buyers of gas stations, convenience stores and restaurants...

Internet Payday Lenders Charged by FTC

Posted on November 13, 2008
Image via WikipediaFrom the FTC Press Release on Internet Payday LendersThe Federal Trade Commission and the State of Nevada have charged 10 related Internet payday lenders and their principals, based mainly in the United Kingdom, with violating federal and state law by not disclosing key loan terms to U...

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The Road from Foolishness to Fraud - Pascal's Wager

Posted on November 12, 2008
Robert L. Park's book on Voodoo science has a great deal of wisdom to offer to the prospective franchisee or distributor and their investigations about the income generating opportunity. In Science, the "no free lunch rule" from the social world is recast as "conservation of energy", or "you cannot get something for nothing"...

Free Incorporation - One Day Only

Posted on November 11, 2008
MyCorporation, an Inuit Company, is offering a free incorporation package for today only.This $149.00 expires at 6:00 p.m. Pacific Time, or 9:00 p.m. Eastern Free For a Day: complete an LLC or Inc filing for FREE at MyCorporation - $149 value! Coupon FREEBIZ-149D...

The End of Wall Street's Boom

Posted on November 11, 2008
Image via WikipediaOne of the viewpoints I have urged at this blog is to analyze wide departures from rationality as if the actors were engaged in systemic fraud.  The basic stance is taken from two different sciences.  First, from the heuristic decision theory crowd, I take the general observation that there are a number of shortcuts we use to manage uncertainty...

Mary Kay's House of Cards

Posted on November 11, 2008
Image via WikipediaOver at Pink Truth, there is an excellent post detailing with emotional accuracy the perils of what economists refer to as the sunk cost fallacy - that the expected gain of a future action depends upon what you have already put into the pot...

Businessman had perfect Pitch

Posted on November 11, 2008
Image via WikipediaStory out of Tucson about a con criminal, which illustrates an important point about how con criminals see themselves. In Tucson, Trujillo engaged in elaborate currency-exchange and real-estate schemes, the prosecutor alleged in court documents...

10 Top Irritating Phrases - Oxford

Posted on November 11, 2008
http://www.telegraph.co.uk/news/newstopics/debates/3394545/Oxford-compiles-l ist-of-top-ten-irritating-phrases.htmlMr Butterfield said: "We grow tired of anything that is repeated too often - an anecdote, a joke, a mannerism - and the same seems to happen with some language...

Shop to Earn Lacks a Real Business Model

Posted on November 10, 2008
Image by Alex Osterwalder via FlickrTracy Coenen has posted a detailed explanation of what Shop To Earn is recommending to its new business/builder brokers on her fraud site. "A Business Builder / Broker has his/her first 30 days to receive an additional $500 Fast Start Bonus (refer 5 Website Owners in your first 30 days)...

Making Fraud Legal

Posted on November 10, 2008
Image via WikipediaRobert FitzPatrick, in a story at Sunday Times, published in Sri Lanka, has an interesting story about the relationship between our current financial crisis and how lobbyist's bring about laws which enable fraud. The big bad word that is normally reserved for illegal pyramid schemes - COLLAPSE - is now referenced daily in discussions about our stock and credit markets...

Is this an Illusion?

Posted on November 10, 2008
Image via Wikipedia I like this illusion, party because of the false claim that the way you see the dancer spin, left or right, determines something about whether your are left or right brained. Virtually everyone who looks at this illusion seems to believe that a) their perception is unique, and b) everyone else is nuts...

Telemarketing Offering Low Interest Rate Scam

Posted on November 10, 2008
Image via WikipediaEd Dickson, writing at his blog Fraudwar, has a warning about a new telemarketing scam. "Cheap long distance, the ability to spoof caller ID and the credit crisis are being used to facilitate a scam called vishing. Although telephone (telemarketing) scams are nothing new, the term vishing probably came about because advances in telephone technology are being used to depart unsuspecting people of their hard-earned money...

Burger King's Opening Hours

Posted on November 07, 2008
Image via WikipediaRyan, writing at the Franchise Pundit, has a good observation about why it is important to have good counsel read a franchise agreement."Three Burger King franchisees in Florida found that every word counts in the franchise agreement...

The Eyes of the Psychopath

Posted on November 07, 2008
Image via WikipediaIn the 1941 book the Mask of Sanity, writing about psychopaths, Cleckly "emphasized his subjects' deceptive, predatory nature, writing that the psychopath is capable of "concealing behind a perfect mimicry of normal emotion, fine intelligence, and social responsibility a grossly disabled and irresponsible personality...

Franchisers Passing on Costs to Franchisees

Posted on November 07, 2008
Image via WikipediaThe Wall Street Journal reports on the exercise of the franchisor's discretion."Some franchisees say they are being forced to pay for a variety of expenses for the first time -- making difficult economic times even tougher. McDonald's franchisees contend they have to take on some expenses once covered by their franchisers...

Disagreement Debate Status?

Posted on November 06, 2008
Image by Getty Images via DaylifeRobin Hanson asks about the very prospect of rational disagreement, a topic of much practical interest to mediators and negotiators. "So what do folks think is the status of the debate on the rationality of disagreement?  That is, how reluctant do you think people should typically be to knowingly disagree with one another, and if the arguments I've outlined  seem to have some potential to influence this reluctance, what more is needed to see if they can fulfill this potential?" I had promised Victoria Pynchon, who writes a negotiation blog, a better answer to her observations about confirmation bias and Hanson's post is a good place to start...

Federal Reserve Board Advance Fee Scheme

Posted on November 06, 2008
From the Federal Reserve Board Press Release.The Federal Reserve Board on Tuesday alerted the public to instances of questionable solicitations directed at consumers. These solicitations promise consumers access to personal loans through a nonexistent Federal Reserve lending program...

Consumer Goods Ponzi Scheme

Posted on November 06, 2008
Image via WikipediaFrom the FBI Press ReleaseR. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced today's filing of an Information charging defendant Andres Leonel Pimstein, 48, of Miami-Dade County, with wire fraud in connection with the operation of a multi-million dollar "Ponzi" scheme, in violation of Title 18, United States Code, Section 1343...

Optical Ilusions and Framing Problems

Posted on November 06, 2008
Interesting illusion by Dan Ariely. Optical illusions are used by many behavioral economists as demonstrations of our cognitive limitations. While this illusion is neat, it doesn't explain or demonstrate any known framing effects. I like Ariely's new book, but I am increasingly doubtful about the value of optical illusions as an explanatory model for framing effects...

Congratulations to President Elect Obama

Posted on November 05, 2008
Our Southern neighbors have elected Barak Obama in something of a national rout of the Republican party. Be interesting to see if the audacity of hope can beat the international debt collector which will showing up soon.

The Cause of This Bubble?

Posted on November 03, 2008
Image via CrunchBaseIf Mark Cuban is right in his diagnosis, the current credit fiasco should have no permanent damage."Let me get this straight.  In 2008, funds trying to squeeze out another basis point or two thought they were being conservative  buying insurance on heavily leveraged portfolios of sub prime loans and other debt...

Fraud News You Can Use

Posted on November 03, 2008
Book cover via AmazonNassim Taleb has a fond farewell to the statistician David Freedman.  From Berekely news:"Throughout his career, Freedman made major contributions to the theory and teaching of statistics. But he also had a broad impact on the application of statistics to important medical, social, legal and public policy issues, including clinical drug trials, epidemiologic studies, economic models, interpretation of scientific experiments, statistical evidence in the courtroom and adjustments to the census...

The Behavioral Revolution?

Posted on November 03, 2008
Image via WikipediaDavid Brooks writing in the New York Times discusses the popular view of behavioral economists."Economists and psychologists have been exploring our perceptual biases for four decades now, with the work of Amos Tversky and Daniel Kahneman, and also with work by people like Richard Thaler, Robert Shiller, John Bargh and Dan Ariely...

Reforming Franchise Regulation

Posted on November 03, 2008
Rupert Barkoff, a well known franchisor lawyer, writes about franchise regulation:"I am not totally convinced that a complete elimination of franchise disclosure document review would be good. However, presently the system has erred on the side of too much review...

Florida Ponzi Scheme

Posted on October 30, 2008
Image via WikipediaR. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced today's filing of an Information charging defendant Andres Leonel Pimstein, 48, of Miami-Dade County, with wire fraud in connection with the operation of a multi-million dollar "Ponzi" scheme, in violation of Title 18, United States Code, Section 1343...

A Big Banker Speaks Out

Posted on October 30, 2008
Image by swisscan via FlickrHere is lead about banking skills., from Joe Nocera's column."I've been a lender for most of those years and I've been appalled at the changes in the industry.The government has already done plenty for the big banks. It needs to stop worrying about them now...

Fighting Manipulative Ads

Posted on October 30, 2008
Image via WikipediaNoah Goldstein has a neat observation about how to deal with manipulative ads, something that the FTC should pay attention to."Several years prior to the cigarette ban, the Federal Communications Commission had enacted the "fairness doctrine," which ordered radio stations and television networks that broadcasted controversial messages of public importance to also provide free air time to those with opposing views...

Pantheon Holdings: Biz Op Scammer Sentenced

Posted on October 30, 2008
Image via WikipediaA Miami woman was sentenced today to 78 months in prison, followed by a three-year term of supervised release, in connection with fraudulent business opportunity sales at a Miami firm, the Justice Department and the U.S. Postal Inspection Service announced...

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