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Fraud Security

The First Recorded Scam

Norman Cousins once wrote, “History is a vast early warning system.” I believe that to be very true. With that in mind, I thought it would be great to share some of that history as it applies to fraud scams. Scams occurred way before they were ever written down, but unfortunately those stories are lost to time.

The first recorded scam is from 300 B.C. in Greece. Two shipping merchants named Hegestratos and Zenosthemis took out a bottomry on a ship and cargo of corn. A bottomry is when a merchant would take out a loan with the promise to repay the loan with interest after selling their merchandise. If the loan was not repaid, the lender got the ship and cargo.

Shortly after leaving port, Hegestratos went down into the hold while Zenosthemis distracted everyone on the ship deck. The captain of the ship was on deck talking to Zenosthemis when he thought he heard a noise from the hold. The captain asked Zenosthemis if he heard anything. Zenosthemis stated he did not hear a noise, but the captain was still confident he heard something. The captain, crew members, and passengers entered the hold of the ship to investigate the noise. There they found Hegestratos.  The captain asked Hegestratos if he heard the noise, Hegestratos denied hearing anything. The captain looked around but did not see anything to indicate where or what the noise was coming from. The captain began to leave the hold but was stopped by a passenger. The passenger pointed out that Hegestratos was hiding an axe behind him. As the captain looked closer, he discovered that Hegestratos was attempting to cut a hole in the hull of the ship in order to sink the ship.  

In a panic, Hegestratos ran from the hold and made his way to the deck of the ship. Once there, he dove in attempting to swim to a small boat the cargo ship was towing. He did not make it and ironically, Hegestratos drowned at sea. A fate he had intended for the crew and passengers of the ship to help hide his deceit, as dead men tell no tales. Zenosthemis was arrested and faced justice in the Athenian courts for his involvement of the scam.

Scams are nothing new and the basics have not changed. The scam by Hegestratos and Zenosthemis is the same as insurance scams being perpetrated today. Almost everyone has heard of business owners setting their business on fire, or other destructive measures, to claim the insurance funds.

History is littered with other examples of fraud and scams – from the early Romans to the more recent Ponzi scams. Today we see employment scams to work from home or wrap your vehicle in advertisement. We see romance scams from dating and social media sites. We also see online loan scams in which fraudsters pose as real lenders and companies. We even see scammers pretending to be law enforcement and threatening to arrest victims.

Members should always monitor their accounts for unusual charges and contact Radiant as soon as something is found. To help protect yourself from ID theft it is a good idea to have a freeze placed on your credit report. This blocks a lender from pulling the credit report which should prevent a loan from being opened by an ID thief. By learning from these past scams, we can learn how to protect ourselves from them. The goal of all scams is the same, work hard to take what someone else worked hard to get.