Not exactly Finance, but there's no Interesting Frauds forum --

From WSJ Law Blog:

Here’s how the scheme allegedly worked: As part of his deal with the Times, Holtet was responsible for picking up daily and weekend copies of the Times from its local printers in Minnesota and elsewhere and distributing those copies to retail locations and home subscribers. The Times paid Holtet approximately 55 cents per weekday paper delivered to home subscribers and approximately $1.10 per Sunday paper.

At the end of 2006, according to the complaint, the average number of daily home subscribers in La Crosse was 65 and the average number of Sunday Times subscribers was 103. However, starting around 2007, those numbers began to climb rapidly, and by the beginning of 2008, there was an average of approximately 2,781 daily subscribers and 2,818 Sunday subscribers. The complaint says that jump was due to Holtet, who, when all was said and done, had created about 8,500 fraudulent subscriptions.

Prosecutor alleges delivery man earned about $230k from the scheme.

Edit for typo.

Sounds like he would be perfect for Wall St.

While we have a break in the action this afternoon, let’s head off to La Crosse, Wisc., where a newspaper deliveryman is alleged to have created thousands of fake New York Times subscribers, recycled the papers, and made about $227,000 on the wily subterfuge.

The trick was that the NYT would deliver to new subscribers and bill them later for the subscription. So our entrepreneur signed up a bunch of deadbeat fake subscribers and got paid to deliver their papers.

Did the guy seriously not think that they would be just a little suspicious that 95% of his customers defaulted on their bill? Gee, I can't imagine how they could have traced it back to him!

WSJ cant even get the first name right, its Martin and not Michael....This guy has a long rap sheet:
Rap Sheet

55 cents to deliver the daily paper!? Wow, I wish I had gotten that rate back when I was delivering papers when I was a kid. I was excited when they raised the price of the paper 8 cents one year, and I got to keep 1 cent of the increase, bringing me up to 6 cents per paper.

Of course, even the profit was better, this scheme would never have worked for me. I had to collect the money from all my subscribers, so it came out of my profits if someone was a deadbeat.

Mithrin said:55 cents to deliver the daily paper!? Wow, I wish I had gotten that rate back when I was delivering papers when I was a kid. I was excited when they raised the price of the paper 8 cents one year, and I got to keep 1 cent of the increase, bringing me up to 6 cents per paper.

Apples and oranges. Please adjust one figure or the other into constant dollars for an accurate comparison. 6 cents went a lot further in 1955 than in 2008. I guess another thing to consider is back in the old days almost everyone subscribed to the paper. How compact do you think a 100 customer delivery route in Minneapolis would be? Perhaps enough subscribers in that city to keep 2 or 3 delivery people busy?

longwood8 said:This just shows that the Time's circulation numbers are even worse than they appear. If this is a national policy you know others are doing it, just not to the same extent.

really...a bank employee robbed a bank - obviously all the bank employees steal $1 a day from the bank and just arent getting caught.

The times is judged not just on reported circ numbers but how many paying customers contribute to the bottom line.

Wonder if they noticed this on their Paragraph 3