Public and private-sector fraud costs the people of Massachusetts billions of dollars each year. The "fraud tax" is the hidden, extra amount that citizens pay in taxes, in insurance premiums for health care, workers' compensation and unemployment compensation, and for goods and services added to cover the cost of fraud and corruption. From January 1991 through October 1993, 82 prosecutions of public corruption cases were initiated in Massachusetts; 39 defendants were convicted, 3 not guilty, 37 pending, 2 dismissed, and one continued without a finding. A total of $3.4 million in larceny of public funds was detected, and 24 were incarcerated in State prison or houses of correction. Fraud in the private sector over the same period involved $12 million. Forty prosecutions were initiated, yielding 14 convictions. If the legislative proposals are enacted, there would be a statewide grand jury, an expansion of conflict- of-interest laws, and an enhancement of felony penalties. There would be tougher penalties for white-collar crimes and new crimes defined, such as extortion by abuse of public office. Penalties for tax fraud would be increased; the crime of bank fraud would be created; campaign financing would be reformed; and "whistleblower" legislation would be enacted. 4 figures