My friend Michael Kuria CFE, recently published an article on fraud in Kenya in the Daily Nation of 10 March 2019. He has allowed me to share the article here.
While going through the
last several weeks’ news stories, my mind could not help but travel back in
time over a decade, to a country house on the outskirts of a small market town
in Eastern Europe where I and others selected from across the world spent one
very hot summer perfecting our skills in service of our chosen craft. What
craft, you ask. Well, the craft of financial forensics. Catching and otherwise
disrupting the schemes of economic saboteurs and terrorists. And make no
mistakes that is what corruption is; economic terrorism. In addition to the heat (it hit 40°C that
day), I still remember the instructor taking us through the paces that day
repeating an operating heuristic that has become one of my commandments. I can
still hear his Germanic accent with the exaggerated “s” bellowing the words “Always assume fraud until genius is proven”.
Indeed. These words came to my mind as I went through column after column in newspapers reporting numerous corruption cases involving people whose crimes should have been evident the moment they made ostentatious public displays of unexplained wealth.
Indeed. These words came to my mind as I went through column after column in newspapers reporting numerous corruption cases involving people whose crimes should have been evident the moment they made ostentatious public displays of unexplained wealth.
Assuming
fraud until genius is proven means that in every situation where you come
across an individual, a corporation, any entity whether natural or corporate,
public or private that repeatedly outperforms its peers day in day out, never
having a bad day, always displaying incredible success without any clear
indication of its competitive advantage you must assume that those involved are
fraudsters and the results come from deception until you are presented with
proof of their genius.
This
heuristic has many implications. If you are dealing with one of the many
preachers who promise guaranteed immense blessings if you “plant a seed” chances
are, unless he can prove supernatural abilities, he is a smooth talking
conman. If a corporation that has left
its peers in the dust for decades year-in year-out without any radically
different products or strategy, it is likely cooking the books. If it is a
rockstar stock-broker who always has his nose in all the right deals, chances
are he is an inside trader not some genius possessed of unnatural intuition. Or billionaire lawyers who have their fingers
in the most lucrative government tenders and never lose cases but possess no
discernible special abilities or talents. Nine times out of 10 you’d win if you
bet that they are corrupt and greasing the wheels of justice with bribes. It is hard to be that good. Genius is rare.
You
wouldn’t think genius is rare in Kenya though if you read the news stories
though. It appears to be very common. In each one of these cases you have
fellows who just a few years ago were unknowns vegetating in utter penury and about
as well fed as a barber’s cat becoming billionaires overnight without
delivering any known value to anyone in the entire solar system. All this without any special skills or
abilities, without inventing, developing, producing or creating anything. To be sarcastic, I am surprised that the Nobel
Prize for Economics is not awarded to a Kenyan every year. And when they are uncovered as having been
nothing more than clinical mythomaniacs with the IQ of a mudfish and the truth
telling abilities of a carnival mirror, we all pretend to be shocked and
disappointed. It is all feigned outrage and we convince nobody. Least of all
ourselves. Everyone Kenyan alive knows what’s going on in all of these cases.
To
end the charade of feigned outrage, I propose that going forward we apply this
heuristic in all circumstances. Until genius is proven, we must assume fraud and
act accordingly. When a suave, smooth talking city-slicker flies out to your
village in a convoy of helicopters to ask for your daughter’s hand in marriage,
and you have no idea what he does for a living or how he made his wealth just
assume he is up to no good, end the negotiations and throw him out of your
house. If not, let’s agree that you are
an accomplice and the beneficiary of thievery not a helpless victim of
unimaginable trickery.
As
the ancient legal maxim goes, Non decipitur qui scit se decipi. He is not deceived
he who knows himself to have been deceived.
Michael Kuria is a risk consultant specializing
in the detection, prevention and disruption of complex transnational financial crime. He can be reached on michael.kuria@consultant.com