In his enduring classic Manias, Panics, and Crashes, economic historian Charles Kindleberger considers a number of factors that can precipitate a financial crash. The uncovering of fraud is one of them. When a bubble grows to a huge size and euphoria turns to anxiety, a whiff of scandal or impropriety is enough to cause everything to tumble down. Interestingly, we have recently witnessed the reverse of that sequence. The current worldwide financial crisis is usually dated back to the summer of 2007. Back then, the housing market imploded in the United States, along with financial products tied to the securitisation of subprime mortgages. The credit crunch and banking collapses followed. So it was a long time before allegations against Bernard Madoff and now Allen Stanford first surfaced. Between the two, Ramalinga Raju, the once high-flying chairman of Indian information technology outsourcing company Satyam Computer Services, admitted to having cooked the company's books for years in what has been called India's biggest corporate fraud case. As famous investor Warren Buffet once observed, when the tide ebbs, we know who has been swimming naked. The ones who are most exposed are inevitably fraudsters running on empty. Madoff is alleged to have run the biggest Ponzi scheme in history, possibly fleecing investors to the tune of US$50 billion. Stanford, too, seems to have played a confidence trick, turning his personality into the biggest asset of his now rapidly sinking investment empire. Meanwhile, Raju rode, as he himself puts it, the tiger's tail on the back of the meteoric rise of the Indian economy, with no way of getting off. Telltale signs against all three men had been there all along, but the illusion of profits they conjured up was so great that their investors were mesmerised and regulators were blindsided. Since we are talking about crooks while quoting wise men, it may be worthwhile recalling another man of wisdom: Machiavelli. Every great political enterprise, the Florentine wrote, has been built on a great crime. French novelist Honore de Balzac said something similar about those who amass great wealth. Flashy personalities who do so rapidly can be a telltale sign of fraud.