An auction house in Sheridan, Colorado, a small Southern suburb of Denver, has been fined about $35,000 after a thirteen hour admininstrative hearing, but allowed to stay open on probation for a year. The business had been shut down for twenty-three days, losing an estimated $12,000 a day, pending this hearing. A criminal grand jury is continuing to investigate. It was accused of rigging bids in charity car sales and of cheat charities out of the proceeds to which they were entitled from the sales. The charities who claim to have been cheated, and any customers who claim to be cheated, could have civil claims against the company as well. And, of course, there is the court of public opinion. Not many charities are big enough to routinely sell cars donated to them at auction and word gets around fast. A better business bureau report on the business would likely be negative. I wouldn't be surprised if this business found itself subject to tax audits as well in the near future.
In short, every manner of possible mechanism for combating fraud has been employed in this case. But, the sheer multitude of approaches to dealing with the problem reflects our ambivalence about what remedy really does make sense in fraud cases. Is it a crime? An administrative violation? A civil manner where punitive damages might be awarded? Or what?
Increasingly, as our economy grows more electronic, fraud is going to squeeze out physical crimes, as the economic gain from theft, robbery and burglary continues to decline. Yet, our society stil hasn't really come to terms with consistent and effective way of approaching it. I know of little data that shows what works best and what does not. But, the fraud issue, dealt with by so many bodies in so many different ways, needs more comprehensive attention. There is, after all, strong international evidence that reducing corruption enhances economic growth, often dramatically.