I don’t know why people can’t stop themselves from fraud, but the whole auditing/financial controls stuff is proven again and again as of vital importance.
Say Yahoo gets a lot of queries for plumbers but plumbers for whatever reason were using AOL to run their campaigns.
If the value of the buyer at the top of the food chain crumbles then the value of a whole ecosystem of vendors are hurt too.
Large parts of the VC backed software industry are built on a house of cards.
Otherwise, I think this sale would be considered ordinary income (other than the fact that it's for an outrageous amount). If you did this as a person, you would have an enormous tax bill and no cash to pay it. As a business, you could deduct your expenses and end up with 0 taxable income, although the IRS probably wouldn't like it.
> online grocery-delivery company Boxed Inc. received $20 million and signed a five-year, $20 million contract. Days after receiving Palantir’s money, Boxed paid $15 million to Palantir as part of the contract
It's clearly a valid strategy that yields some desirable results in the short term. From history, it seems people usually convince themselves they can come back and fix it if they can just make it to the long term.
In my experience it's because more minor or gray instances of it that we never see get swept under the rug or ignored, and people get pressured or encouraged into bigger and bigger, more clear-cut fraud until it gets caught.
Survivorship bias works with vice like anything else.