While bidding farewell to the old year and welcoming the new, this Christmas Eve story out of Canada should not be lost in the holiday news cycle:
“Over a one-year period during 2011 and ’12, some 6 million gallons of maple syrup – about $ 18 million worth – were stolen from the ‘strategic maple syrup reserve’ controlled by the Federation of Quebec Maple Syrup Producers (FPAQ)…. Last week, three men were arrested in connection with the heist.”
The Mounties have ridden to the rescue, the arrest total reportedly has reached 18, and weightier issues can now be on the table than a supply threat to the breakfast calorie count. Namely:
Producers around the world closely protect their strategic assets – whether Middle Eastern petroleum (OPEC), Japanese agricultural products (Nokyo), Colombian narcotics (Cali and Medellin) or American professional football and basketball players (NCAA). So it should not be surprising that the question is debated about Quebec, why our typically mild-mannered northern cousins maintain a government-run cartel to promote market stability in the supply and pricing of gourmet pancake toppings.
A better question, though, is just how fully one-quarter of the national stock – the equivalent of 16,000 barrels of syrup – could have been siphoned out of a warehouse described in the FPAQ’s own press release as “secured by a fence and locks, and visited regularly.”
The question must inevitably be asked, in short, “Where were the gate-keepers?”
Fortunately for the appetites of the world’s luxury crepe-and-candy consumers, the thieves were undone because they chose the hard way, working their felonious little scheme on the liquid commodity itself. Their sticky footprints left a trail, because to monetize their scheme required a disposition infrastructure – trucks and warehousing, a processing facility in neighboring New Brunswick and a sales pipeline through which to channel their slippery merchandise into the sweets-addicted US market.
In this, they suffered the detection risks of scams like that of India’s Satyam in 2009 – where maintaining a roster of 13,000 phony employees would arouse the curious to wonder about the absence of ancillary evidence – the ghost workers’ non-existent desks, telephones and withholdings and remittances for health care and benefits.
Simpler, harder to detect and far less messy, would have been the time-honored creation of inventory that was fraudulent and fictitious from the outset. Consider these classics:
- The great Salad Oil Scandal of 1968, by which Tino DeAngelis floated only enough vegetable oil on bulk tanks of water to fool auditors who looked and tasted from the top rather than tapping the tanks at the bottom.
- Equity Funding in 1970’s Los Angeles, with over-stated death benefit liabilities under fictitious life insurance policies turned into cash through a Ponzi scheme of cessions to reinsurers.
- The South American coffee shipper, showing tons of stock on its balance sheet and available for collateralized borrowings, in reality comprising only camouflaged piles of sand under thin layers of beans.
- Over-stated Texas cattle herds, sold to unwary urban tax-shelter buyers – it being no great trick to run the same calves repeatedly through a maze of corrals, past the clip-boards of credulous city slickers unwilling to dirty their suits to exercise the control of chalk-marking the forehead of each passing animal.
- Or the related German scheme by which a fleet of trucks was over-counted in their repair sheds by auditors distracted from the back parking lots, where the vehicles were re-cycled by simply switching their license plates and dashboard bar codes.
The examples are as endless as the ingenuity of the criminal mind. Had the light-fingered Canadians only thought through the vulnerabilities of their targeted provincial cartel’s control system, they’d have kept their hands far cleaner while moving phony paper rather than hot syrup.
And they’d have made their illegal fortune while avoiding not just the brown sticky stuff, but what will now be extended stays in government custody, where the pancakes in the prison cafeteria will not be flavored with so much as a drop of down-market Aunt Jemima’s.
Happy New Year to all. Thanks for joining this dialog. Please share with friends and colleagues. Comments are welcome, and subscription sign-up is easy and free, both at the Main page.