In case you missed it among all the other U.S. and global headlines, the penny was quietly retired from circulation last week. Few of us still carry coins, much less cash, yet there’s something faintly sentimental about the penny’s departure — a tiny copper token that once promised luck when found on a sidewalk. Its value was always negligible, but its presence was unmistakable.
This week also happens to mark International Fraud Awareness Week, an annual global campaign led by the Association of Certified Fraud Examiners to promote anti-fraud education and sharpen public vigilance. At first glance, the end of the penny and a week devoted to fraud prevention may seem unrelated but they share a common lesson about how small things matter — and how the devil is always in the details.
The Classic "Salami Slicing" Fraud
As the name suggests, it evokes an image from the deli counter: the butcher holding up a slice and asking, "Thin enough?" Each cut is nearly weightless, a fraction shaved off, barely noticeable; yet, accumulate enough of them and you have an entire salami gone missing.
Fraudsters exploit precisely this psychology through salami-slicing schemes that involve skimming imperceptibly small amounts (a penny here, a fraction of a cent there) across thousands or millions of transactions. The victims rarely notice, and, after all, who scrutinizes a one-cent discrepancy? And yet, those micro-amounts scale. Whether in illicit schemes or in entirely legal domains like high-frequency trading, fortunes are built by exploiting tiny advantages measured in microseconds and fractions of pennies. Hedge funds have long understood that the right algorithm, executed quickly enough, can turn minuscule price movements into enormous profit.
This is exactly why fraud examiners are trained to treat every anomaly, no matter how small, as potentially meaningful: A stray entry. A rounding error. A penny that "shouldn't" be there or one that inexplicably isn't. These are the breadcrumbs that often lead investigators to uncover sprawling, sophisticated fraud.
Here are a few notable examples:
Perhaps the most popular media appearance of salami slicing occurred in the 1999 comedy Office Space, where frustrated and mistreated Initech employees Peter, Michael and Samir decide to take revenge by infecting the company’s accounting system with a computer virus designed by Michael to divert huge numbers of fractions of pennies into a bank account, stealing $300,000 over a weekend. In January 2023, a former software engineer for the e-commerce company Zulily was partly inspired by the movie and edited code to divert shipping fees to a personal account and manipulate product prices, stealing about $260,000 in electronic payments and more than $40,000 in merchandise, even referring to the scheme in a document on his work computer as “OfficeSpace project,” according to police.
In July 2014, the FTC shut down a mobile phone cramming scheme that fraudulently added more than $100 million in charges on consumers’ mobile phone bills without their permission. The FTC, and later federal prosecutors, alleged the defendants created fake websites with sham offers of “freebies” or gift cards, to trick consumers into providing their mobile phone numbers. The defendants then placed monthly subscription fees for a variety of “services” on consumers’ mobile phone bills without their authorization. The case went on for nearly a decade resulting in multiple individuals being charged and found guilty including a former mobile phone industry CEO who was sentenced to 10 years in prison.
In December 2023, federal prosecutors in Florida alleged that a group of fraudsters stole millions of dollars from consumers and small businesses by making recurring unauthorized charges against their bank accounts including through numerous sham microtransactions so that banks would not detect large numbers of chargebacks for unauthorized debits.
Also in December 2023, federal prosecutors in California charged another network that, through various business entities they owned and operated, processed payments for clients that made unauthorized charges to consumers’ accounts. The defendants used sham microtransactions to reduce the number of chargebacks and evade scrutiny from banks.
- In 2008, a fraudster wrote a computer program that allowed him to defraud E-Trade and Charles Schwab by opening 58,000 brokerage accounts which he then used to steal “micro-deposits.” Financial institutions made a micro-deposit when the account was opened to test the functionality of the account. The amounts deposited in this case ranged from $0.01 to $2.00. The defendant was sentenced to 15 months in prison and to pay $200,000 in restitution. Though an older case, it is often cited about micro-deposit exploits.
Taken together, these schemes show how fraudsters rely on the same principle as the deli counter: shave the slice just thin enough and hope no one bothers to weigh it. In honor of International Fraud Awareness Week — and in the same week we’ve said goodbye to the penny — it’s worth remembering that vigilance starts with the smallest discrepancies. Because in fraud, as in life, the devil lives in the details, and the thinnest slice can reveal the biggest scheme.