Complex Systems with Patrick McKenzie (patio11) APIs of evil: studying fraud as infrastructure
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Feb 12, 2026 A deep dive into industrial-scale fraud as a coordinated business process. How fraudsters reuse shared services like incorporators, CPAs, and lax banks to scale theft. Why high-growth programs and weak financial links attract abuse. Proposes simple proof-of-work signals and data-driven defenses to detect repeat offenders and map fraud supply chains.
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Minnesota Daycare Stakeouts
- Minnesota investigators filmed daycare centers with no children despite billing paperwork.
- Patrick McKenzie highlights visceral video evidence that paperwork alone failed to reveal.
Fraudsters Replay Their Plays
- Fraudsters play an iterated game and often open new frauds after being caught.
- Tracking past fraudsters yields high hit rates for finding future schemes.
Fraud Has A Supply Chain
- Fraud develops a detectable supply chain of specialized service providers.
- Shared incorporators, mail services, CPAs and addresses reveal networks at scale.
