Thursday

American Greed


Anyone ever watch this show on CNBC? It's on every Sunday and Wednesday night. I tuned in last night and found this one story outright ridiculous.

It follows 2 sisters that operate a business supplying bolts, nuts, and screws on machineries operated by our troops during the war in Afghanistan.

It's very important that these supplies get to the troops in a quick and fast manner. So the government usually pays a high shipping cost to have these delivered pronto!

These two hardworking sisters were able to accidentally stumble across a loophole with the way they can bill their buyers (US Government of Defense) extravagantly.

It started out innocently when they were shipping some supplies over to the buyer and mistakenly keyed in the wrong shipping cost. They realized that regardless of the shipping cost number billed, the automated system used to generate a check to reimburse them for the shipping would pay the amount billed.

For example, the government of defense orders $4 worth of supplies from them. They were able to bill the buyer $100,000 shipping charge on this transaction. Overtime, they realized they can enter in any amount for shipping and still get reimbursed by the automated bill payout machine.

They spent lavishly over this system glitch for years. They bought vacation homes, jetskis, traveled to New York for an expensive jewlery trip, gambled in Las Vegas, and opened a cookie business. They portrayed a very successful image.

Eventually, all "too good to be true" things must come to an end.

Greed was ultimately their downfall when the sisters inadvertently submitted an order twice in error. The order was for a $0.38 screw and they charged a whopping $998,000 as the shipping cost.

Up until now they were able to escape human detection until this machine declined their request due to a duplicate entry. This was when authorities were called in and they found the sisters had scammed them close to $21mm worth.

It wasn't long until the FBI knocked on their door. This was too much for one of the sister. She eventually took her own life while the other one was sent to jail.

8 comments:

Howard said...

Not surprising at all. Our governmenrt operates inefficiently at all levels and all of us taxpayers pay for every bit of it.

Is it any wonder we have these huge deficits and taxes that go up without bound?

Why does health insurance cost so much? It's not because of the healthcare cost itself, but all the overhead and crap wrapped around it. Take away the HMOs, lawyers, and the rest of the BS in the system and we all would probably be paying only 25% of what we do today.

Jersey Mom said...

There are those who would take advantage of anyone in any situation. Many of these people portrayed in American Greed (yes, I watch it as well) are just unbelievable! In general, a few bad mice/rats have ruined it for the rest of us.

Money Reasons said...

I'm more disappointed with our government! I'm sure others took advantage of this system too, but only did it for a few hits to get a bit of cash! They probably won't get caught because they aren't stupid greed like the sisters.

It's truly a shame our government is so lame like that...

Ciawy said...

It's so depressing how people can ultimately get so greedy.

Investing Newbie said...

Oh my goodness! I think I'm going to start watching this show; that story sounds juicy. Anyway, I'm not surprised they were able to take advantage of the loophole. Someone should have been on the other end, the gov't side, to verify those charges.

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