Like everything it's a spectrum. Those are incidents of outright fraud, but most of it is far more gray. It's the boyfriend/girlfriend hired onto staff as an assistant who only actually comes into the office 3 days a week. It's the trip that's an extra day for no good reason.

That being said, I think much of the grayness is for a reason. Brutal frugality will choke a business nearly as much as overspending.

Conspicuous consumption has a legit role in a company's marketing - whether it's a status-symbol impressive office building, helicopter transfers for execs, or luxury cars for senior staff, it's about sending the message "We're successful, and well-funded". Whether that's true or not, sometimes the appearance of success is enough to win the investment necessary to achieve success.

Kim Dotcom in 2000, posing with his model girlfriend in front of a superyacht…a year later he had multimillion euro investments from TÜV and BMP.

Want the company to buy a motorbike or car for "Product testing"? Totally legit - but it belongs to the company. Use it for personal use, and in most countries you'll be hit with a tax bill.

Mixed-purpose trips such as "Customer acquisition in Europe"? There are specific rules governing whether/how it's taxed: http://www.lewis-knopf.com/newsletters/financial-rx-article/...

Pesky taxmen. They thing of everything.

Most definitely is fraud, and of course I wouldn't actually recommend doing it!!

But that's what parent was talking about, buying toys and parties and such and why investors don't notice. Cause they call it by a different name.

They are actually fraud, and nobody should do any of them.