Luc Sante on scams of yore:
I’ve always loved the homespun symmetry of the cat-and-rat farm. It’s simplicity itself: You set up two sheds, one on either side of the road. One contains cats and the other contains rats. You skin the cats to make fur coats and feed their remains to the rats, and then you feed the rats to the cats. The cats and the rats reproduce passim. Presto: fur-coat trade, no overhead. It's a perpetual motion machine.
Now here's the modern version, courtesy of A4E:
The company at the centre of a police investigation into an alleged abuse of government back-to-work contracts compelled jobseekers to work unpaid in its own offices for at least a month at a time, the Guardian can reveal.
In response to a freedom of information request about the company last year, the Department of Work and Pensions (DWP) revealed that A4e sent jobseekers it was meant to be helping into employment to work in at least two of its own offices in an apparent conflict of interest.
The placements, part of Labour's Flexible New Deal scheme, were mandatory and are understood to have lasted for four weeks. Those on benefits were, in effect, forced to work for free for the company or have their benefits stripped.
And the company was also paid to 'employ' each of them for no money, thereby being subsidised to cut its own payroll and overhead. Presto: another perpetual motion machine.