July 2003 Topics
Curry favor, deep discounting, nostrum, piratsvo, piratstvo, scam baiting, and unbanked community
 

This article is in the July/August 2003 issue of
The White Paper, the Journal of the Association of Certified Fraud Examiners.
 

Curry Favor
To seek or gain favor by fawning or flattery. To show bias. “Le Roman de Fauvel” was a very popular allegorical poem about corruption, written in 1310 by Gervais du Bus, a clerk in the chancellery of the kings of France. Six years later, Chaillou de Pesstain adapted 167 pieces of music to the poem. The main character of the poem was a chestnut-colored horse named Fauvel, who was used to symbolize fraud, cunning and deceit. Fauvel’s name was an acronym of six vices – Flatérie (excessive, insincere praise), Avarice (insatiable greed), Vilanie (outrageous wickedness), Variété (fickleness, prone to change), Envie (envy), and Lascheté (cowardice, laziness). Fauvel was unbridled and sly – definitely a horse that needed flattering to get what you wanted. A good brushing was just the trick to please Fauvel. Curry is a term for grooming, scrubbing, or brushing a horse. Fauvel was an unfamiliar word to Medieval English speakers, so the phrase “to curry Fauvel” was interpreted as “to curry Favor.”
"Ci Commenche le Livre de Fauvel," manuscript with English translation, http://www.mtholyoke.edu/courses/mtdavis/
320/Fauvel/fauvel.html, April 18, 2004.
 

Deep Discounting
A marketing strategy to sell selected merchandise at a huge discount, often 50% or more. This price slashing strategy is used on a limited basis to sell excess inventory from over-production, “dog merchandise” (slow-moving items), and discontinued items. In contrast, deep discounting of popular items should be a red flag to a buyer that the unusually low-priced merchandise might be counterfeit or stolen.
LA
 

Nostrum
A medicine of secret composition recommended by its preparer but usually without scientific proof of its effectiveness. The first documented advertisement for a nostrum appeared in the Boston News-Letter in 1708 for Daffy’s Elixir Salutis. Nostrums were quack remedies sold by apothecaries, postmasters, goldsmiths, grocers, hairdressers and others. The ingredients were kept secret for the purpose of restricting the profits of the sale to the inventor or proprietor. In Latin, nostrum means “our own.” On old medicine labels, nostrum meant “one of our own make.”
Chuck Whitlock, Mediscams: How to Spot and Avoid Health Care Scams, Medical Frauds, and Quackery from the Local Physician to Major Health Care Providers and Drug Manufacturers, Renaissance Books, Los Angeles, 2001, page 39.
 

Piratsvo (Piratstvo)
A Russian word for a music CD, a movie DVD, or computer software that is copied and mass-produced by some shady outfit without the original creators sharing a kopek in royalties. The kiosks in the Gorbushka Market in Moscow might be the largest market for pirated music and films in Eastern Europe. DVDs of recent films sell for $8, instead of $20. The Microsoft Windows operating system sells for $2, instead of $90. Copyright agents of the Ministry of the Interior confiscate suspected bootleg material. However, the inspections are more of an annoyance than a deterrence. Often, all it takes for a vendor to retrieve the piratsvo is a small payment to the right official.
Douglas Birch, Baltimore Sun, “Moscow a Haven for Pirated Goods,” The Arizona Republic, December 28, 2002, page A30.
 

Scam Baiting
Teasing a scam artist by feigning interest in the scam and forcing the fraudster to perform silly or time-wasting tasks. Many Web sites log the daily tactics of scam baiters who aim to thwart and humiliate criminal gangs – especially those that run Nigerian advance fee fraud schemes which have victimized people everywhere for hundreds of millions of dollars. In Britain, scam baiting has become a hobby – “the new Internet blood sport.” Volunteer baiters respond to actual Nigerian scam letters and e-mails. Scam baiters use fictitious names, often based on mythological characters or dead celebrities. Their correspondence is used for insulting and stringing the fraudster along. Baiters offer to set up trust accounts or send money to the fraudsters, but give them names of nonexistent banks with acronyms like GRIFT or MORON. It takes considerable time for the fraudsters to dutifully reply to all the correspondence, research the banking relationships with the fraudster’s country, and arrange meetings. Some baiters tricked fraudsters into waiting in front of public Webcams in Amsterdam and then posted the fraudsters’ photos on the Internet. Scam baiting is a form of revenge – it tries to trick the tricksters.
The Word Spy, http://www.wordspy.com/
words/scambaiting.asp, March 31, 2003.
 

Unbanked Community
People who do not keep their money in banks. They depend on grocery stores for cashing payroll checks and Western Union for sending wire transfers. Mexican nationals in the United States wire home $9.2 billion annually, which is one-fifth of the global retail money-transfer business. The unbanked community does not understand or trust banks because of their experiences in their native countries. Many have been victims of high account fees, high transfer fees, poor foreign-exchange rates, and other scams that siphon off money before it reaches their intended recipients. Many immigrants and undocumented illegal immigrants are afraid of walking into a bank and having to identify themselves. Banks are trying to win the loyalty of second- and third-generations of the unbanked community by offering savings/checking/debt accounts, ATM cards, and on-line transfers that are safer and cheaper and can be used across borders.
Karen Krebsbach, “Following the Money,” U.S. Banker, September 2002, pages 62 – 65.
 

Larry C. Adams, CFE, CPA, CIA, CISA, is an audit consultant in Phoenix, Arizona. He is the author of 80 articles and 2 books about fraud. Contact him at www.larry-adams.com or fraudwritr@aol.com.
 

ã Copyright 2003 Larry C. Adams.
All rights reserved.

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