Page 17 - Insurance Times October 2023

Historical

Maritime

Fraud

Dr. Soumi Mukherjee
The Pioneers of the Marine Insurance Media Officer
International Police Organization
Frauds (4th Century BC)

Hegestratos was slated to deliver a large grain shipment to a buyer in Athens. Instead of actually
delivering the grain, he devised a plan to place no grain on his ship, secure the bottomry loan,
sink the boat to collect on the bottomry, then sell the grain to a new buyer. Shortly after leaving
the port, Hegestratos went down into the hold while Zenosthemis distracted everyone on the ship
deck.

H istory, as we all know, is like a memory book, against the value of a ship. If the ship successfully completed

which records all the events of our past; so that
the voyage, the loan was paid back along with considerable
we can go back to it, learn from its
interest. If the ship was damaged during the voyage or sunk,
consequences, avoid the same mistakes and
have a better meaningful life to live for the present, and of the loan could then be disbursed to the ship owner for an
amount up to the full value of the loan. Such a financial
course, the future. With that in mind, I thought it would be instrument was an essential means of securing the interests
great to share some of that history as it applies to fraud of merchants and buyers during the era.
scams. Scams occurred way before they were ever written
down, but unfortunately those stories are lost in time. Hegestratos was slated to deliver a large grain shipment to
a buyer in Athens. Instead of actually delivering the grain,
The first recorded scam is from 300 B.C. in Greece.While he devised a plan to place no grain on his ship, secure the
not referred to as ‘insurance’ at that time, a Greek
bottomry loan, sink the boat to collect on the bottomry,
merchant by the name of Hegestratos is said to have
then sell the grain to a new buyer. Shortly after leaving the
secured a ‘bottomry’ to cover the value of his boat in case
port, Hegestratos went down into the hold while
it was to sink during the voyage between Syracuse (modern- Zenosthemis distracted everyone on the ship deck. The
day Sicily) and Athens, Greece.
captain of the ship was on deck talking to Zenosthemis when
he thought he heard a noise from the hold.
The two shipping merchants named Hegestratos and
Zenosthemis took out the 'bottomry' on a ship and cargo of
The captain asked Zenosthemis if he heard anything.
corn.
Zenosthemis stated he did not hear a noise, but the captain
A ‘bottomry’ was effectively a loan that could be taken out was still confident he heard something. The captain, crew

16 October 2023 The Insurance Times