“Sticking The Arson Charge On A Couple Of Patsies”

Authored by Bryce McBride,
Imagine a situation where the owner of a long-established building supply company sees his profits turning into losses with no way to turn things around.
The owner has two options.
The honest option is to acknowledge the situation and shut down and sell his inventory of goods, his buildings and his equipment. With some luck the sale will earn enough to fund a modest retirement. The dishonest option is to continue to operate on the good name of the business in order to acquire lumber and hardware from suppliers on credit, and then sell the goods privately and deposit the proceeds in an offshore bank account. Finally, when his suppliers lose patience and threaten legal action the owner will arrange for the business to suffer a fire.
The fire serves two purposes.
First, it directs attention away from the owner’s poor management as the cause of the firm’s difficulties. Clearly the fire destroyed the business, not the owner. Second, it obscures the owner’s fraudulent sale of inventory in the months leading up to the fire and so protects his ill-gotten wealth. The ashes in the lumber shed could just as easily be from the firm’s declared or actual inventory. With a full fire insurance payout based upon his declared inventory of lumber (and equipment and buildings) the owner will be able to settle with his suppliers and, with the remainder of the insurance settlement and the money squirreled away in his offshore account, enjoy a very comfortable retirement.

This post was published at Zero Hedge on Aug 25, 2017.