The Arctic Refrigeration Company is the type of enterprise that often comes to people's minds when they think of commercial skullduggery at its most severe. In the 1890s, Artic Refrigeration attracted customers with its promise of better household refrigeration through its proprietary chemical blend. It distributed advertisements nationally and built an ambitious sales force touting its technology as a way to cool perishable foods indefinitely at 25 percent of the cost of ice. After disappointed customers complained to the Department of Agriculture that the firm's products failed to cool as suggested (in fact, the product actually accelerated melting), investigators found that the “proprietary chemical blend” was little more than a type of salt. Artic Refrigeration was simply a fraud masquerading as an innovative enterprise.

While the deception perpetrated by the managers of Artic Refrigeration is obvious, readers of Edward Balleisen's spectacular survey of American fraud from the early nineteenth century to the present shows that allegedly fraudulent enterprises are often not so easily identifiable. In some instances, it is actually difficult for even keen regulators to decipher whether a firm is clearly engaging in fraudulent conduct or not.

Consider, for instance, when the Sears, Roebuck Company sent out flyers to customers with an attractive offer for new shoes. The first person to respond, the advertisement stated, would receive a piano. To the first from each state to respond, a fifty-dollar gold watch. To postal inspectors at the time, this offer appeared deceptive—a lottery program in disguise—and they issued a fraud order against Sears. In another instance, Macy's advertised in the 1920s that its prices were “6 percent less, every day of the year, on every article of merchandise.” Although Macy's managers had every intention of honoring this competitive pricing, the Better Business Bureau (BBB) charged Macy's with engaging in deception since Macy's couldn't know the price offered by every conceivable store to make its claim technically true.

Although the managers of Artic Refrigeration had little interest in fulfilling their promise to customers, executives at Sears and Macy's had an expressed and effortful desire to fulfil their claims. Despite these differences, all three firms were subject to fraud claims. This raises the question of what exactly constitutes fraud in commercial enterprise. Balleisen's work helps illuminate this quagmire and depicts it as an ongoing struggle between regulatory bodies and firm managers. Executives at Sears and Macy's saw no fault in their behavior, but to assuage regulators Sears halted its “lottery like” promotions and Macy's caveated its advertisements that “others may on occasion cut our price . . . until we find it out.”

One of the more fascinating aspects of Balleisen's work is his detailed depictions of the bodies charged with managing and limiting fraud and how these groups evolved over time. Balleisen shows that mitigating fraud in modern America often fell to private organizations such as the BBB. These informal regulatory bodies were viewed as crucial collaborators in the crusade against fraud by helping to distinguish legitimate enterprises from the illegitimate. It is here that we even see some indications of early corporate social responsibility. Balleisen describes one manager in 1925 explaining to his employees the value of paying several thousand dollars to the BBB: “It is not an organization run by somebody trying to interfere with our business. . . . We are members of this Bureau because we want an outside check upon our activities” (p. 206).

This more informally organized regulatory environment was not always effective when it came to addressing the least savory managers, who often were repeat offenders. The desire to address gaps in enforcement led to the creation of more formal regulatory bodies within the federal government. Ironically, this push to more forcefully address unethical and deceptive business practices stirred its own questions of the moral limits of policing. Observers became concerned that the tactics employed by regulators appeared just as morally dubious as those of the fraudsters. For example, some regulators created false identities to detect potential swindles. In this way, it seemed to take deception to fight deception.

Balleisen lays considerable blame on lax regulatory standards for ostensibly permitting and even sometimes fostering fraud. He offers compelling evidence that changing regulation impacted the potential for business misconduct, but one also wonders how this emphasis on regulation fits with the much longer and more global history of commerce that prospered in far looser regulatory environments. For instance, joint-stock companies operated for hundreds of years in jurisdictions lacking formal regulatory bodies. Despite this, fraud wasn't ubiquitous, suggesting that cultural norms and other informal enforcement mechanisms, rather than regulation itself, long supported fair commercial dealings.

Likewise, the argument that the securities deregulation during the late twentieth century caused many of the largest corporate frauds seems inconsistent with how the frauds were perpetrated. WorldCom's failures, for instance, didn't emerge out of some newly created regulatory loophole, but instead were simply due to mischaracterizing expenses as assets. Similarly “simplistic,” Allen Stanford's Ponzi scheme offered investors a marginally higher rate of return on the most basic of assets: certificates of deposits. While it is possible that changes in regulators' vigilance may have allowed frauds like these to fester for longer, neither of these multibillion-dollar frauds could be said to have been caused by deregulation in the financial industry.

Yet, such quibbles are decidedly minor in the content of the remarkable research that Balleisen offers readers. The celebrated criminologist Edwin Sutherland lamented scholars' tendency to avoid white-collar crime because of the multifaceted business, legal, and psychological complexity of the topic. But Balleisen does not shy away from this challenge. His masterful work ambitiously addresses the regulatory environments that fail to limit fraud, the incentives that promote fraud, and even the cognitive deficiencies that permit both perpetrators and victims to be taken in again and again by deception.

Balleisen's book shows us why the same kinds of ruses are successful time and time again. It serves as a much-needed critical history of fraud in America over the last two hundred years—and will serve as the reference on deception until the seemingly inevitable next generation of fraudulent schemes deserves its own place in history.