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The Daily Wildcat

The Daily Wildcat

 

Fraud Museum is the real McCoy

AUSTIN, Texas — It’s a hall of fame for the infamous — a collection of artifacts from con men, large and small, who swindled, stole and cheated to get everything from bread money to billions.

The Fraud Museum, an exhibit in an Austin office building, contains a Bernard Madoff engraved cigar box, given to clients as tokens of his appreciation; now-worthless stock certificates from Enron, WorldCom and Adelphia; and a canceled 1975 check from inside-trader Ivan Boesky.

It also contains not-so notorious items, such as an 1876 French envelope that a perpetrator attempted to mail with a previously used stamp.

This is not a museum for typical tourists. And most of the visitors are fraud examiners or people who wander in, not sure if this office is the right place.

It has grown haphazardly around the headquarters of the Association of Certified Fraud Examiners, which provides investigative training and resources for its 55,000 members in 125 different countries.

Last month, fraud examiners and other members of the association toured the exhibit after an educational workshop in Austin. They meandered through the narrow stairwells, personal offices and conference rooms, studying more than 100 fraud-related items.

The museum’s memorabilia include a 1990 wanted poster of “”Crazy Eddie”” Antar from New York, owner of an electronic store chain who cost his investors more than $100 million, and a document from the South Sea scandal, in which a company proposed a scheme to take on the United Kingdom’s debt in exchange for government bonds. By fraudulently hyping the stock, the company collapsed and brought thousands into financial ruin.

Association spokesman Scott Patterson admitted ignorance of much of the history of fraud until he started working with the association five years ago.

“”I’ve learned the lengths people will go to, to make a quick buck. It’s fascinating,”” he said.

Visitors seemed puzzled and laughed at some of the more offbeat items, such as a medicine box from the turn of the century labeled “”Orangeine,”” which promised to end headaches and strengthen blood. The drug actually caused severe kidney and liver disease and — less egregiously — had nothing to do with orange other than the color of the box.

Also on display was the Oxydonor, circa 1896, a device that featured a metal plate the size of a silver dollar with cords that wrapped around the patient’s leg while a connected metal tube was placed in ice water. It promised to cure all natural forms of disease by absorbing and transferring oxygen from the air.

The association’s founder and chairman of the board, Joseph Wells, began collecting items for the museum more than two decades ago when he started the association and while he was researching his book “”Frankensteins of Fraud.”” Although he is now retired, he continues to search for memorabilia at auctions and on Internet sites. Many members also have donated items to the exhibit over time, such as the Madoff cigar box.

Jim Ratley, president of the association and a former Dallas police officer, said the museum also is a place for investigators to see the patterns of fraud that have persisted over time.

To date, the association has no item from the legendary con man Charles Ponzi, who gave rise to the term used to describe pyramid schemes, employed so spectacularly by Madoff in recent years. An article from 1920, however, details the arrest of three of Ponzi’s rivals, who used his technique to defraud investors.

Ratley said past frauds are relevant today because they are repeated and can help in current investigations.

As a police officer, he said he handled many fraud investigations because he had a degree in accounting. He said it’s difficult for police departments to dedicate the resources to delve into fraud, which is often complex and the work time-consuming.

“”We have to look at where we have been if we want to know where we are going to go,”” Ratley said. “”Fraud is often overlooked.””

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