Criminologists have studied the spread of fraudulent practices and techniques among perpetrators. This study contributed to criminology by looking at the other side of diffusion, examining the spread of fraud among investors in a case of intermediate fraud. Intermediate fraud occurs when fraudulent acts are committed in or by a legitimate business. The study used diffusion theory to guide the analysis in investigating the ways in which five factors, product, attributes, buyer attributes and behavior, seller attributes and behavior, structure of the social network, and method of propagation influence the adoption and diffusion of investments in oil and gas wells among a population of investors. The case study was an oil and gas venture that began as a legitimate business and then, after a period of time, increasingly committed financial fraud, the Fountain Oil and Gas Company (Fountain). Using comprehensive archival, interview, and survey data, Fountain was analyzed due to exhibiting a two-stage pattern of intermediate fraud. The case of intermediate fraud is interesting because the factors that contributed to the success of the business in its legitimate state were the same factors that contributed to the success of the fraud in its illegitimate stage. The study began by proposing a typology of the diffusion of fraud and used it to situate the case study in criminological literature. It then provides an overview of diffusion theory. It continues by introducing the specific case of Fountain, followed by an analysis of the diffusion methods used in the spread of Fountain’s investment, using both longitudinal data and survey data. It concludes with reasons why social networks or impersonal methods may or may not be used in the diffusion process, and their effects on outcomes such as a loss of capital. References