A Beautiful Model for Fraud

Take a look at this:

A Beautiful Model for Fraud and here is the accompanying article:

The great credit unwind of '08.

How To Spot A Scam, Part 6: Roommate Scam

This is the way the scam works:

A person claiming to be a potential roommate sends a check for an amount far above the amount owed (this is a HUGE red flag). They then request that the balance be sent back to them so that they can buy an airline ticket or some other expense (which is bogus). The check they send is fake.

Check the links and instructions I provide in this post.

Also, go to FakeChecks.org and report it.

How To Spot A Scam, Part 5: Tax Scam Update

There is a new phishing e-mail scam going around involving tax "refunds."

The letter says this:

Internal Revenue Service
United States Department of the Treasury

After the last annual calculations of your fiscal activity we have
determined that you are eligible to receive a tax refund of $496.23.
Please submit the tax refund request and allow us 3-9 days in order to
process it.

A refund can be delayed for a variety of reasons.
For example submitting invalid records or applying after the deadline.

To access your tax refund, please click here

Best Regards,
Tax Refund Deparment
Internal Revenue Service
---------------------------------------------------

If you get this message, delete it. It is not from the IRS. More information can be obtained at the IRS website.

How To Spot A Scam, Part 5: Tax Scams

Bankrate.com has a list of the "dirty dozen" tax scams and how to spot them. Here are the list of tax scams covered:

1. Telephone tax refund abuses
2. Abusive Roth IRAs
3. Tax-related identity theft phishing
4. Disguised corporate ownership
5. Zero wage claims
6. Return preparer fraud
7. American Indian employment credit
8. Illegitimate trusts
9. Structured entity credits
10. Improper charitable deductions
11. Form 843 tax abatement
12. Frivolous arguments

Number 12 is the most common one that I am aware of. Here is the entry from Bankrate.com:

12. Frivolous arguments

This is probably the most notorious of scams. Promoters have advocated numerous false claims over the years, including that the 16th Amendment concerning congressional power to lay and collect income taxes was never ratified, wages are not income, filing a return and paying taxes are merely voluntary and being required to file Form 1040 violates the Fifth Amendment right against self-incrimination or the Fourth Amendment right to privacy. The IRS and courts have consistently held that such arguments are frivolous. Taxpayers have the right to contest their tax liabilities in court, says the IRS, but no one has the right to disobey the law that allows the government to collect the taxes.

...

The absence of a particular scheme from the annual dirty dozen rankings should not be taken as an indication that the IRS is unaware of it or not taking steps to counter it. While some schemes might not be as active this tax season, the IRS says taxpayers should remain wary because old scams often resurface or evolve.

If you encounter any of these schemes, or are approached with a new one, the IRS wants to know. Report suspected tax fraud by calling toll-free (800) 829-3676.

Turn in tax cheats and con artists

You also can report suspected tax fraud by sending in Form 3949-A, Information Referral. The completed form or a letter detailing the alleged fraudulent activity should be addressed to the Internal Revenue Service, Fresno, CA 93888. Include as much information as you can, including who is being reported, the activity being reported, how the activity became known, when the alleged violation took place, the amount of money involved and any other information that might be helpful in an investigation. You don't have to give the IRS your name or address, although it is helpful to do so. The agency says it will keep your information confidential. And if the IRS recovers any tax revenue based on your tip, you might be entitled to a reward. In that case, tax officials will need to know how to get in touch with you.

And remember: If you are ever offered a "surefire" tax-saving opportunity, it never hurts to be a little skeptical.

"When it comes to taxes, everyone has to pay their fair share," says IRS Commissioner Everson. "I urge taxpayers not to be taken in by hucksters who promise to lower or eliminate taxes. Getting caught up in the dirty dozen or similar schemes can lead to big headaches."

And remember the old adage: "If it seems too good to be true, it probably is." If you have any legitimate tax questions or need help with them, only use a certified state-licensed professional or Certified Public Accountant (CPA). If you feel you cannot afford a professional, there are many tax programs (TaxCut, TurboTax, etc.) available at many retail outlets that are easy to use and they will go through any potential tax credits or breaks you might be entitled to. There are also different versions of each of these products to match your specific need. For instance, the cheapest version can be used if you are merely a wage earner and don't have that many deductions and the more expensive version is for those who may have a business for which they need to use Schedule C. For your convenience (and, potentially, a small monetary gain on my part) I have provided a link to Amazon.com for each of the products I have mentioned.

If you do think you want to do it yourself, give yourself plenty of time (set aside at least a full day; even better: plan an entire weekend to prepare your tax returns, if necessary). You only have to do it once per year; and once it's done, it's done.

New Foreclosure Fraud Scam

Foreclosure Fraud Scam PSA


Don't fall prey to scam artists to promise to "save" your home from foreclosure. The answer they promise will be worse than the disease. If you are having a problem, call your lender or talk to a bankruptcy attorney.

Hat tip: Tanta at Calculated Risk

How To Spot A Scam, Part 4

As a follow-up to my post on How To Spot A Scam, here is a link to a website dedicated to helping potential victims spot fake checks: FakeChecks.org.

Here is a PSA advertising the site:



There are more videos here.

Take the Scam Quiz

McAfee SiteAdvisor Phishing Quiz

Can you spot the scam?

How To Spot A Scam, Part 3

Educating yourself against Investment Scams

A group by the name Invest Ed™ has started a web site dedicated to teaching potential investors how to avoid investment fraud here in Oklahoma. The group is supported and made possible by the Oklahoma Securities Commission and produced by the University of Oklahoma Outreach, College of Continuing Education.

You can find the only tutorial at www.InvestEdOK.org.

How To Spot A Scam, Part 2

Here is part 1

If you can answer "YES" to any of the following questions, you could be involved in a FRAUD or about to be SCAMMED:

Is the check from an item that you sold on the internet or Ebay such as a car, boat, jewelry or other easily sold or pawned item?

Is the amount of the check more than the item's selling price?

Did you receive the check via an overnight delivery service?

Is the check connected to communicating with someone via e-mail?

Is the check drawn on a business or individual account that is different from the person buying your item or product?

Have you been informed that you were the winner of a lottery? Was the supposed lottery in another country?

Have you been instructed to either "wire," "send" or "ship" money as soon as possible, to a large U.S. city or another country? (For that matter, are you being asked to "re-ship" a product to another country?)

Have you been asked to pay money to receive a deposit from another country?

Are you receiving pay or commission for facilitating money transfers (or product "re-shipments") through your account?

Did you respond to an e-mail requesting you confirm, update or provide your account information?

Have you been hired to be a "secret shopper?"

Have you been asked to help get money out of another country? (Another related method is to tell you that you will be getting part of an inheritance or business transaction.)

Have you been recruited to do any job and asked to keep it a secret?

If you answered "YES" to any of the above statements, go to your bank and tell them immediately.

AVOID BECOMING A VICTIM

Ultimately, whatever yarn is spun, most scams come down to getting a consumer to send money via a wire transfer overseas. It is never a good idea to wire money, particularly out of the country. Avoiding wire transfers would put a big dent in the success of scams from Nigeria, Australia, Canada, England, Mexico and other foreign countries.

Other advice for consumers:

Use Google. Dozens of sites now index large lists of names and other elements of Nigerian scams. If unsure, put parts of the story into the Google search engine (you can do that from my page here on the left side of the page) and click. If it is a scam, it is likely someone else on the internet will have published a complaint.

Verify the legitimacy of a bank. The FDIC maintains a database of federally insured banks on its web site.

Always use a credit card. Consumers have wide protection when paying for internet-based transactions with a credit card. Checks are easily forged -- even cashier's checks, sometimes called bank checks. U.S. consumers think they are guaranteed.

Banks can take up to two weeks to confirm authenticity of a cashier's check, according to the American Bankers Association -- even if the funds are made available to the depositor. If a check doesn't check out, the bank will take its money back. The consumer will be on the hook for any withdrawals made against that deposited amount.

Thanks to Bank of Oklahoma for much of this information.

How To Spot A Scam, Part 1

I have been seeing a lot of scams coming via email in my spambox lately. I would say that it consists 90% of the email that my filters catch.

One of my clients got suckered in by one he got through traditional postal mail recently. And now that he has been suckered once, he seems to have been put on their list that they pass around.

The particular letter that he fell victim for told him that he had won the lottery in Canada and sent a legitimate-looking check along with the letter. "This check needs to be cashed to pay for your 'government taxes'" the letter told him. He deposited the check, and the bank put a 10-day business hold on it. Had I known about it, I could easily have been able to spot the scam from the letter. The first clue was that the letter started out "Dear Winner." And, if I had been able to run the code at the bottom of the check, I would have been able to determine that the routing code did not match the bank to which the check claimed it was from.

Here is a link where you can input the routing number from the bottom of the check to see what bank it belongs to. The routing number is usually a 9-digit code on the left at the bottom of the check.

***Update*** If it turns out that the bank code matches the bank name on the check, call the bank with information you find on the internet to verify that the account number (usually the number on the right side at the bottom of the check) matches an account they have there. If it matches, then verify that the name on the check is the same as the name on the account.

Another thing to look for: if the letter, return address or the phone number to call is in Canada (especially Toronto), then that is another red flag. Here is a link that allows you to search by phone number.

If they tell you to cash the check and then wire the money via Western Union, that is another red flag as the money can apparently be picked up anywhere in the world (not just where you designate it be sent).

If they tell you that they are sending you a check to pay for taxes or some "handling fee" or any other fee, that is another clue it probably is a scam.

After having talked with the bank regarding the fraud that had been perpetrated against him, I made an appointment to speak with the fraud investigator. I met him at his office and he showed me hundreds of fake checks ranging from Versachecks (checks printed using a computer program and check stock you can buy at any office supply store) to sophisticated money orders that could only be told by looking at them very closely. (Check the watermark and the security strip on money orders which are like the ones in your dollar bills). Many of them had absolutely no water mark and/or only a slightly printed security strip on the outside of the check. (The fake security strip could not be seen through the check from the other side.)

Then check to see if the phone number on the back of the check is present. Many of the fake ones leave this information off (some only had internet addresses instead of the phone number). Here are the phone numbers to call if you think you may have received a fake money order or want to verify the one you have is real:

AAA Visa Traveler's Cheques	1-800-227-6811
American Express Gift Cheques	1-800-221-7282
American Express Travelers Cheques	1-800-525-7641
Bank of America Money Order or Cashiers Check	1-800-756-3333
Circle K Money Orders	1-800-569-3585
Continental Express Money Order	1-714-569-0899
Travelers Express Checks	1-800-542-3590
US Treasury Checks	1-804-697-2605
US Postal Money Orders	1-866-459-7822
Western Union Money Orders	1-800-999-9660
Wal-Mart Money Orders	1-800-542-3590
CVS Pharmacy Money Orders	1-800-746-7287

In part 2, I will post questions you need to ask if you think someone is trying to scam you out of your money using internet, email or postal mail fraud schemes.

Fake Job Ads

Hat Tip to Daily Kos writer BobOak for bringing attention to this information.

Apparently, many job ads put in American periodicals and internet job sites are placed in order to prevent Americans from getting jobs. This is essentially a type of fraud as the employer has no intention of hiring any applicants for the position -- even if they would be willing to accept the position at a lower salary and the applicant is highly qualified.

This is an indication that there is no shortage of American workers, there is a shortage of American employers willing to hire American workers.

Beware Of New Tax Scam Email

In a story at CNN Money, the IRS has warned of a new scam to bilk unsuspecting taxpayers out of their hard-earned dollars.

WASHINGTON (CNN) -- The Internal Revenue Service warned taxpayers and businesses Thursday of two new and potentially devastating e-mail scams that could silently take over their computer hard drives.

The e-mails contain official-looking IRS logos and information, falsely notifying the reader of IRS action against them or their company.

A link for further information would secretly launch an insidious computer program. That program, a type known as a Trojan horse, could cause a variety of paralyzing problems as it directly accesses the hard drive.

One e-mail purports to come from the IRS criminal investigation division, telling the readers they are under tax investigation in connection with the California Tax Franchise Board. The other e-mail falsely notifies the readers that a complaint has been lodged against them.

The agency issued the warning about the e-mail Thursday, saying it learned of the scams a day earlier.

Officials urge that anyone receiving such an e-mail leave it unopened and especially stay away from any hyperlinks contained in the message.

Recipients of such e-mails are encouraged to forward them to the IRS at phishing@IRS.gov.

TPM Muckraker: Bush Adminstration Gutted Fraud Investigations

It seems that I am not the only one noticing an increase in white-collar crime. TPM Muckraker has posted an article tying the increase to fewer law enforcement resources.

Here is the full article in the Seattle Times. From the Seattle Times article:

Thousands of white-collar criminals across the country are no longer being prosecuted in federal court -- and, in many cases, not at all -- leaving a trail of frustrated victims and potentially billions of dollars in fraud and theft losses.

It is the untold story of the Bush administration's massive restructuring of the FBI after the terrorism attacks of 9/11.

Five-and-a-half years later, the White House and the Justice Department have failed to replace at least 2,400 agents transferred to counterterrorism squads, leaving far fewer agents on the trail of identity thieves, con artists, hatemongers and other criminals.

Two successive attorneys general have rejected the FBI's pleas for reinforcements behind closed doors.

While there hasn't been a terrorism strike on American soil since the realignment, few are aware of the hidden cost: a dramatic plunge in FBI investigations and case referrals in many of the crimes that the bureau has traditionally fought, including sophisticated fraud, embezzlement schemes and civil rights violations.

I find this rather interesting, given that the terrorists we are fighting often use such schemes to fund their activities. It seems that having a strong fraud investigation unit would be useful in fighting terrorism. But what do I know? I'm just an Okie lawyer.

How Much of the Housing Boom Is Based On Fraud?

In an article today in the Washington Post, Housing Boom Tied To Sham Mortgages I saw this interesting quote:

Federal law enforcement officers say that with heavy demands on them from homeland security, they have had the resources to shut down only the worst offenders.

"By the time we prosecute, the damage has been done, the neighborhoods are already destroyed and the money is gone," said David E. Nahmias, the U.S. attorney who oversaw the Hill case.

In Atlanta, entire neighborhoods and condominium developments, especially those in affluent areas, were hit by organized fraud rings. Initially, these schemes pumped up housing values for everyone as artificially high appraisals helped the swindlers get inflated loans. Legitimate home buyers rushed in to get a piece of what they thought was a soaring real estate market. Now as the fraud is being exposed, their home values are taking a hit.

As more of these cases come to light around the nation, the question is: How much did an epidemic of fraud contribute to the frenzied housing market of recent years?

Earlier in the article there was this:

In some neighborhoods, mortgage fraud became so extensive that it drove up overall home prices. That is what happened in Atlanta. Hill, 50, was convicted last month in what authorities call one of the biggest mortgage-fraud cases in U.S. history. It involved 400 fraudulent loan applications; nearly $100 million in mortgages; and 120 closing attorneys, appraisers, mortgage brokers and others who prosecutors say were in on the scam.

Federal prosecutors say this kind of fraud is hardly unique to Atlanta -- the lax lending standards that Hill exploited have existed throughout the country in recent years.

What's that saying? "One bad apple spoils the whole bunch."

There were a lot of innocent victims taken advantage of:

Prosecutors think most of the straw buyers, some just college students, did not know what Hill was doing with their names and credit histories. Several later testified that Hill's attorney flipped through loan documents so fast at closing that they hardly read what they were signing. Most apparently thought they were becoming the owners of homes Hill would maintain and rent out to make the monthly payments.

This shows that more attention needs to be taken of white-collar crime. As the article says, resources are being taxed due to the demands of Homeland Security.

I can also tell you that working in the bankruptcy field, there is a lot of overlap in dealing with people who are the most vulnerable to being taken advantage of by these types of crimes. That is why it is important for us to have a strong governmental arm to be the watchdog for these people. Think about it, the people who are the most educated about how these things work -- lawyers, appraisers, real estate agents and bankers -- were were the ones taking advantage of less-educated folk and were getting rich at their expense.

This is the reason why you need more government oversight to prevent white-collar crime. The effects of the crimes often have wide-ranging consequences.

Did Subprime Mortgage Lenders Learn Their Tricks From Used Car Salesmen?

That's the theory behind Road To Ruin: Subprime Lending In The Auto Industry

Overholt is a shady car dealer's worst nightmare. In the business for 25 years, Overholt stood up and blew the whistle in 1997. At the time, by his calculation, he had swindled consumers out of $33 million. Today, he says, abuses at auto dealerships are even worse.

"In 1997, the average rip-off that I could identify, because I did it, was about $1,200 a car. Today it's over $4,000 per automobile."

The rip-offs don't just come on the price of the car, but on the financing. And Overholt says the subprime customer has provided an easy mark for the unscrupulous dealer.

The customer who has little money and poor credit gets saddled with a very high interest rate. In addition, the consumer is charged for things that aren't really there, inflating the price of the car and -- more critically -- the amount the consumer must finance.

They're doing it, he says, by falsifying documents. On the credit application, income is inflated and length of employment is increased to make the subprime borrower look more credit worthy, so they can afford a more expensive car, with those higher than necessary monthly payments.

"They're taking other documents the bank requires, such as a book-out sheet, showing the equipment on the car, and falsifying that," Overholt charged. "Now, that's a very key document because it establishes the value of the car. These two documents they falsify consistently."

For example, a consumer may want to purchase a used SUV that is actually worth $12,000. But as chrome wheels, alarm systems and premium sound systems are added on paper -- but not installed -- the price of the car rises to $15,000. As a result, the bank lends more money on the car than it's actually worth.

"The customer is not only upside down because of the interest rate, there's equipment on the car that doesn't really exist, and they've been put into an automobile they know they really can't afford," Overholt said. "The consumer always believes that the bank is the good guy, that it's not going to lend them money they can't afford to repay. But that's not the case."

How many car dealerships engage in these fraudulent practices?

Overholt admits that it's hard to know for sure, but he believes it could be as many as 60 percent, with more succumbing to the pressure all the time. One rule of thumb, he says, is the bigger the car dealer, the more likely it is to be ripping off its subprime customers. Recently, automotive site Edmunds.com hired an undercover reporter to expose fraud in the showroom.

[William] Cunningham, whose expertise is mortgage lending, has closely followed the implosion of the subprime mortgage market. He traces the problems to the very concerns Overholt has expressed.

"A lot of these predatory lending practices that are now showing up in the housing industry started out in the auto industry. When they weren't caught adding thousands of dollars to the cost of a car loan, those practices bled over to the housing sector," Cunningham said.

"A lot of these predatory practices were first put onto people in communities of color; in Hispanic communities, where there are language issues, and in African-American communities, where there is a problem just from a net-wealth standpoint. We've seen these practices that started out in communities of color now move into the broader community."

Hat Tip to Elaine Dowling for finding this article.

Don't Confuse Savings With Wealth

From The Mess That Greenspan Made Blog:

Everyone just stop it! If, in some twisted sort of way, redefining "wealth" or "net worth" as "savings" makes you feel better about the world and your own lot in life, then go ahead and do it - just do it in private.

Whatever gets you through the day.

But, please, stop sharing your rationalizations with the rest of us who prefer to continue believing that "savings" (as either a verb or a noun) is not something that can come and go as quickly as a subprime lender.

Call it old fashioned if you want, but, just leave the word "savings" alone. Please.

Since the personal saving rate turned negative in 2005 and then plunged even further into the red last year, there has been a steady stream of commentary and research papers intent on blurring the lines between "wealth", "net worth", and "saving(s)" - sort of like a bad doctor anxious to ease the immediate discomfort of an ailment with one pill or another while the underlying illness remains untreated.

Wealth is the value of your assets.

Net worth is assets minus liabilities.

Saving is income less expenditures or money put aside.

Stop confusing them.

Mr. Iacono may be willing to give them the benefit of the doubt, but I am not convinced that those who post "confused" information are doing it unknowingly. I have a suspicion that said "confusion" is actually disinformation.

I fear that the comment by "Python" may be the correct one. Python said:

Apollo, I see it as: "sacrifice the sheep to hasten the inevitable." The PTB are straight out of "1984". Their newspeak is designed to confuse and to ensure conformity. God help anyone who is not exercising critical thinking skills in every aspect of their life. The sheeple are about to get slaughtered.

(I think "PTB" stands for Powers That Be.)

Read the rest of the linked article and educate yourself so you can be wary of financial traps.

Real Estate Fraud Rising in the U.S.

From the article:

Real estate fraud has now firmly emerged on the FBI's radar as the country's fastest-growing white collar crime - all, in essence, polite forms of bank robbery. Industry losses ran to at least $606 million last year, it says. And the Treasury Department's suspicious-activity reports are up 35 percent this year. The Internal Revenue Service's criminal case numbers in mortgage fraud have been doubling every two years through the first half of this decade.

What is not stated is the rip-off of the American consumer as the inflated home appraisals push market values up beyond what is warranted -- and above what middle class Americans can afford. That does not even mention how many American consumers will be forced into bankruptcy because they, in their longing to buy a home, will have their dreams dashed on the rocks of the bankruptcy court because of exorbitant greed.

When homes are sold, the appraisal is based on camparable sales of other homes, or "comps" as they are known in the real estate industry. As inflated appraisals get factored into the market, other homes are expected to sell for similar prices.

Again, from the article:

In over 80 percent of the cases, scammers are helped by an insider, the FBI says. One of them was Jerome Mayne, a former loan officer who spent time in prison before becoming a motivational speaker in Eden Prairie, Minn. "The buyer they sent me was completely full of holes, fake everything, and I knew darn well that these guys were slippery enough to try to pull it off," says Mr. Mayne. A bottle of expensive booze and $500 cash helped grease the wheels, he admits.

Unraveling such gangs takes time and expertise, which has become the focus of law enforcement and industry professionals across the country. Working in their favor, at least, are solid paper trails.

"Usually when we complete an investigation, we end up with a spectrum of actors, from closing attorneys to brokers to appraisers, organizers, recruiters, and straw buyers," says Ms. Nelan. "It's fairly sophisticated, and it takes a lot of people to do it."

One of the toughest things for prosecutors is sorting out who's guilty. One group of recent perpetrators turned out to be clueless senior citizens in Alabama, who OK'd ploys to inflate their income in order to "invest" in real estate, says Linda Finley, a civil attorney who prosecutes such fraud cases in Atlanta. "It's gotten to the point where it's really hard to figure out who the actual victims are."

Another factor is the late-night TV ads and "motivational speakers" that touted how people became "overnight millionaires" buying and selling homes. I read somewhere that many of these motivational speakers were simply teaching people how to commit real estate fraud.

For more education on real estate fraud you can also go to the Flipping Frenzy website.

Top forms of Mortgage Lending Fraud

From the NATIONAL ASSOCIATION OF CONSUMER ADVOCATES:

If you are buying or refinancing a house, watch out for the "Dirty Dozen" tricks by finance companies.

The link is a Word document.

The Shape of Wealth

I decided to go shopping yesterday, and then watch of the OU-Nebraska Big 12 Championship football game. (For those of you who visit this site from out of the country, that is American football, which is similar to rugby -- not soccer.)

Anyway, I did a little more reading of the Why We Want You to Make Us Richer, er, I mean, Why We Want You to be Rich by Donald Trump and Robert Kiyosaki. In it, on page 46, Mr. Kiyosaki refers to a Changing Demographic of the American populace. He claims the American populace is changing from a rhombus-shaped society (I was planning to upload some images to assist me, but Blogger is not working right for some reason) to an hourglass-shaped society where there are many rich and many poor, but few middle class.

***Update*** Blogger seems to be working again.





I think he has the wrong shape. We are turning more into a triangle-shaped society. There are still relatively few rich, but there are more poor and fewer middle class. Many of the middle class are sinking into the lower classes. But the number of middle class Americans that are rising to the upper classes -- even upper middle classes -- is not increasing at same rate as those falling into the lower classes. In fact, you would be hard-pressed to show that the percentage of middle class Americans that are moving up is increasing at all.




Mr Kiyosaki goes on to say on pages 47-48:

The problem is our nation is filled with people like my poor dad -- a good man, well-educated, hard-working, yet expecting the government to take care of him when he retired.

He then says that all the money that the baby boomers contributed to Social Security has "disappeared into a Ponzi scheme."

What a canard.

I, for one, cannot figure out what is so wrong with creating guarantees for workers who have worked all their lives so that they can live out their last days in relative financial security. Not everyone can become a CEO, top athlete, movie star, a Senator or a big-business owner. Many people are quite content to be your Average Joe; and there is nothing wrong with that. The fact is that very few people are cut out by genetics or training for greatness.

Mr. Kiyosaki is starting to come off in this book as a snooty and pretentious elitist. The fact is that one of the best and most stable retirement guarantees is Social Security. It is not like the President of the United States and his administration can filch the Social Security funds like Enron or Worldcom executives did with their employees retirement funds.

Before you throw eggs at me, I realize you could argue that Congress is spending the Social Security money irresponsibly to lessen the current account deficit. But that is not quite the same as dumping the very stock in a company that you own while at the same time telling your employees to buy the stock with their retirement money. It is this very type of graft that discredits Mr. Kiyosaki's argument to make everyone responsible for their own retirement. What we need, if we are to keep retirement plans private and encourage people to invest their money, is to have laws that strengthen the ability to recover money that is misappropriated.

Is this the cause of rising real estate prices?

I have a suspicion that we will be hearing a lot more stories like this as the real estate bubble deflates. From the story:

A federal indictment unsealed Thursday accuses home buyers, real estate sales people and a mortgage broker — seven people in all — of wire fraud, money laundering and other offenses in attempts to defraud lenders in buying homes in Edmond's upscale Oak Tree addition.

The seven committed fraud by "artificially inflating the sales prices of homes and submitting false loan applications," the indictment alleges. "Each of the defendants intended to personally profit by funneling substantial sums of money back to themselves and others from the excess sales proceeds under the guise of remodeling, repair costs or marketing service fees."