Black: Accounting is the “weapon of choice” for elite financial frauds

Image: watcharakun / FreeDigitalPhotos.net *

“‘Geithner is not simply wrong about fraud playing no significant role in prior crises. His senior staff is also wrong, or unwilling to speak truth to power. Geithner is not slightly wrong, he is grotesquely wrong. The fact that he is so wrong a quarter-century after the facts on fraud were made public would be disturbing for any official, but for the U.S. Treasury Secretary who has just seen the global economy crushed by an orgy of accounting control fraud by the world’s most elite bankers it is terrifying.

They find the truth beyond inconvenient because it threatens their fraudulent big finance contributors. William K Black PhD

“Fraud does not even make Geithner’s list of contributing factors to financial crises. The U.S. has experienced three recent financial crises – the S&L debacle (which is the subject of this first installment), the Enron era frauds, and the ongoing crisis. Accounting control fraud is the leading cause of each of the crises. “Control fraud” is the term white-collar criminologists use to refer to frauds in which the person controlling a seemingly legitimate entity uses it as a “weapon” to defraud. Accounting is the “weapon of choice” for elite financial frauds. Control frauds cause greater financial losses than all other forms of property crime – combined.”

Complete article HERE:

Bill Black is an associate professor of economics and law at the University of Missouri-Kansas City. He spent years working on regulatory policy and fraud prevention as Executive Director of the Institute for Fraud Prevention, Litigation Director of the Federal Home Loan Bank Board and Deputy Director of the National Commission on Financial Institution Reform, Recovery and Enforcement, among other positions.

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