only embezzlement of money that's a problem. It's also embezzlement of information. Because information has become extremely valuable. And so far as restitution is concerned? Unheard of.
About a third of that $400 billion is from embezzlement, employees stealing from their employer. Out of embarrassment, the vast majority of companies never report these thefts to the police. They merely fire the employee, then tell human resources that if they receive a call about this person, say that they worked here but no longer work here. Consequently, the person goes on to steal from somebody else.
One of the things that always amuses me is that back when I was on the other side of the law, it was harder to commit fraud than it is now. You'd think it would be the opposite. And five years from now, it will be easier than it is today. And that's because of one word - technology. Technology breeds crime and it always has. Thirty-five years ago, if I had to make a check, I literally had to print the check, and so I had to be a skilled printer. I had to know how to do color separations, make negatives, and make plates. It was very time-consuming and tedious. Today, sitting at home in an apartment with a PC, a scanner, a color printer, and a color copier, you can reproduce just about any type of document, including hard cash.
So when people ask me, if I were a con artist today, what would be different? I tell them, "Instead of making $2.5 million, I'd make $20 million. It's that much easier."
And we look on white-collar crime a lot differently. China, many years ago, printed a warning on its currency that whoever forged counterfeit money would be beheaded. Until the early 1800s, forgery in England qualified as a hanging offense. Justice got a bit more civilized, but thirty-five years ago you at least got sent to prison. Today, I'd probably get probation or community service, and maybe have to make some restitution. That's not deterrence, that's encouragement.
It's a dark, morally ambiguous world today, but one problem we have in our society is that people don't really care if some big company was embezzled for $100,000. They figure that's the company's problem; they've got billions. Instead, people want to know what law enforcement is doing to clear the streets of murderers, rapists, drug dealers, and other violent criminals. People want them off the street, because they pose a physical threat. If you ask them about some guy selling counterfeit Gucci bags for twenty bucks down by the supermarket, their reaction is, "Well, I don't care about that. If the purse looks good, I'll buy one myself." In addition to the cost of fraud, counterfeit goods are responsible for $350 billion in losses in the United States every year, but people don't care about the problem because they think it doesn't really affect them. What they don't understand is that ultimately, it does affect them. It means we all pay higher fees for goods and services.
The police are frustrated. They complain that if they go out and arrest a check writer, then the district attorney doesn't want to fool with the guy because it's not a high profile case. The guy just wrote some bad checks. If they do prosecute him, the judge says the prison is full. He can't put this check writer behind bars; he needs the cells for murderers and rapists, the really scary guys. Thus, something like 98 percent of forgers go free. Prosecutors have a benchmark. Rarely will they prosecute a fraud of less than five thousand dollars. So criminals know that if they stay under the benchmarks, they're safe.
There's no reason to rob a bank the old-fashioned way, with a mask, a gun, and a prayer. Why go and stick a gun in someone's face? You're talking about armed robbery, ten to twenty years. You could end up shooting someone. Someone could shoot you. And for what? The average bank robbery in 1998 and 1999 netted less than one thousand five hundred dollars. You're a lot better off doing your robbing with the point of a pen. Why not walk in and cash a fraudulent check for twenty thousand dollars? Maybe you'd get six months in the county jail, if they caught you, if they prosecuted you, if they sent you to jail. And so the machinery of fraud functions almost untouched.
Another big difference is, thirty-five years ago you had to