The Big Con

• Joshua M Brown
• June 12th, 2009

There's a scene in the movie Die Hard with a Vengeance where John McClane (Bruce Willis) finally catches on to the fact that the bomb-scare scavenger hunt he and the NYPD have been sent on is only a distraction, a ruse to cover up the real crime - a heist of the Federal Reserve's gold bullion stores. 

A street smart kid riding his getaway bike from a shoplifting spree yells out to McClane "Look around!  All the cops are into something...It's like Christmas, you could steal City Hall!"

Much like McClane, reporters are starting to catch on to the fact that with hundreds of billions of stimulus package funds sloshing around, the potential for fraud is epic right now.

From Marketwatch.com:
Swindlers, con men, and thieves could siphon off as much as $1 out of every $10 spent as billions of dollars in stimulus money begin flowing into all corners of the economy in coming months..."The rule of thumb typically is that of the about $500 billion worth of money that's going to run through the procurement process, somewhere between 5% and 10% of that usually finds it way into potential problems...That's sort of the benchmark that I use."

The above quote comes from David Williams, the chief executive of Deloitte Financial Advisory Services, who believes that:

The fraud and theft losses from the roughly $787 billion stimulus package approved earlier this year could reach about $50 billion.

Anytime a large sum of money is being transferred from one place to another, there will be schemers and skimmers lurking about.  In the case of the stimulus plan, we're talking about a potential for theft that is unheard of.  Hopefully, the distraction of the weak economy and the government's scamble to get these funds pumping through the economy don't lead to a bonanza for the underworld.

Sources:

Fraudsters Eye Hug Stimulus Pie (MW)

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