The First Ever Fraud Recorded in History

In 300 BC, two Greek sea merchants, Hegestratos and Zenosthemis, plotted to enrich themselves by taking out a bottomry, an insurance policy on their ship and cargo.

Per the agreement, they were required to re-pay the loaned money with interest after selling their merchandise. If they failed to repay the loan, the lender would gain possession of the ship and its cargo.

After leaving the dock, both men decided to sink the ship so they could pocket all the loaned money. However, the plans went awry due to the alert captain and crew members and Hegestratos jumped and drowned himself in the sea. Zenosthemis was arrested, tried and imprisoned in Athens.

This fraud type (Insurance Fraud) is still practised today, with even more devastating effects on people’s economic and emotional health.

Note: Bottomry, also known as a bottomry bond , is a contract where a shipowner provides his or her ship as security for a loan to finance a voyage or for a certain period of time. The shipowner usually uses the loan for maritime (i.e. sea-related) risks (e.g. repairs, equipment, emergencies) during the voyage.