Final answer:
The claim that fraud perpetrators often live beyond their means is true; their luxury lifestyle, often manifested by purchasing expensive items and properties, is typically not supported by their legal income. These signs can be indicative of embezzlement, identity theft, or other fraudulent practices.
Step-by-step explanation:
The statement that fraud perpetrators often live beyond their means since their income does not support their lifestyle is generally true. Perpetrators may flaunt their wealth, buying sports cars and mansions, which are not justifiable by their legitimate income. This is because they may have acquired funds through fraudulent means such as embezzlement, identity theft, or scams, using stolen personal identification to make extravagant purchases, including big ticket items like automobiles and jewelry. Not only does this reflect their capability to defraud, but it also signals a red flag for possible fraudulent activity when their lifestyle does not align with their known source of income.
Moreover, fraud can be driven by the temptation of financial gain or the need to maintain an unsustainable lifestyle. As mentioned, poverty can lead to desperation and may push individuals to commit crimes as a means of survival, although not all criminal behavior is a result of poverty. Further, the e-mail scams such as those promising wealth from a displaced Nigerian prince play on the gullibility and desire for wealth among potential victims.