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The Rise of MLM: The Raconteur & Sweet Nothings

In The Flying Muse on November 8, 2010 at 7:14 pm

The Ponzi Scams In Modern Day

In 1920, Charles Ponzi ran a short-lived but spectacular scam that linked his name to the most classic of all cons.  At first, a Ponzi scheme seems too good to be true.  Then people start making money.  Thrilled by the easy cash, investors keep their money where it can grow or talk up the incredible returns.  The scam depends on new recruits – after all, it’s their money the con artist gives to earlier investors.

Other con artists sell or trade things that don’t actually exist. To secure a loan or make a profitable deal, they present phony collateral with an air of unflinching honesty. Relying on their superhuman skills at bluffing, and on the gullibility or laziness of their victims, the con artist earns millions out of thin air.

Fraudsters and white-collar crooks run another sort of con. Cooking the books, pocketing huge bonuses and making inside deals require less artistry than a con but these crimes are also rooted in calculated deception. The fraudster plays a role – of trustworthy and sure-footed CEO, for instance – and lies without hesitation to shareholders and auditors.

The success of a con artist, broadly defined here to include those who loot and bribe for profit, blooms out of a complex alchemy of character, skills and circumstance.

Tools of a Con Artist

Whether he draws on his innate character, or earned and practiced authority, a con artist uses every angle to convince people of his integrity and his financial prowess.

Con artists draw on a variety of strengths, including:

  • Power & Influence: When he talks, people listen. He has a position of power and friends in high places. He exudes an aura of success; whatever he touches, it seems to turn to gold.
  • Charisma: He appeals to a broad swath of people. He makes people feel clever and charmed; he plants the seeds of his con with such cunning, his victims think they’ve come up with the idea themselves.
  • Strong Cover: He seems almost incapable of wrongdoing. His cover might be his solid reputation and the loans he’s secured from big banks and investment firms. Or it might be a persona he adopts: a pious member of the community or a gifted, but naive, businessman.

Climate for a Con

The con artist sees and exploits individuals’ vulnerabilities. Likewise, he taps into points of weakness in his environment.

A ripe climate for a con is one that includes some or all of the following:

  • A booming stock market: When stock prices are high, con artists will do anything to keep them up and to profit from the buzz on Wall Street.
  • Optimistic and/or inexperienced investors: A spirit of risk-taking often accompanies a booming market. Investors – including those with little experience – are ready to jump in and make a fortune.
  • Regulatory loopholes: A good con seems plausible – and has multiple layers of plausible complexity. Cons flourish when they can fly under the weakened or ineffective radar of the Securities and Exchange Commission.

Collapse of a Con

The life span of a con depends on a number of factors; if a con artist can attain a limited notoriety – in which his scheme is being talked about but hasn’t created a loud enough buzz to attract real scrutiny – he can enjoy a profitable run. If he can maintain tight control over his company books and board, he can fix numbers to his heart’s content.

Of course, a con is bound to collapse. Built on a foundation of lies, it grows shakier and more difficult to maintain with each passing year. It requires ever more complicated manoeuvres to hide the hollow base and keep the money flowing.

Cons are almost certain to fail with the addition of either of the following:

  • Economic downturn: When the stock market crashes, investors become cautious. They start to pay close attention to where they put their money. If enough investors are worried, and sell stock or withdraw funds, the con combusts in a matter of days.
  • Persistent reporter: All it takes is a simple question: How does his moneymaking scheme work? Once a good reporter has asked that question, and started to follow the convoluted money trail, the end is near for a con artist.

Outcome of a Con

Hundreds, even thousands, of investors are left with empty retirement and savings accounts. Hard-working people lose their jobs as companies fold under the strain of a crooked CEO. Banks and investment firms are drained of millions. The impact of a con is felt even beyond those at the center of the scheme. New legislation may be introduced to fill a regulatory gap, but con artists will continue to find ways to profit on a lie.

Real-life notable con artists
Born in 17C William Chaloner
Born in 18C Jean Henri Latude · Gregor MacGregor
Born in 19C Philip Arnold · Nicky Arnstein · Lou Blonger · Helga de la Brache · Ed “Big Ed” Burns · Cassie Chadwick · Horace de Vere Cole · Louis Enricht · Arthur Furguson · Oscar Hartzell · Canada Bill Jones · Henri Lemoine · Victor Lustig · William McCloundy · George C. Parker · Charles Ponzi · Death Valley Scotty · Soapy Smith · Titanic Thompson · William Thompson · Eduardo de Valfierno · Joseph Weil ·
Born in 20C Dona Branca · Bernard Cornfeld · Richard Eaton · David Hampton · Konrad Kujau · Kenneth Lay
Living people Frank Abagnale · Tino De Angelis · Du Jun · David “Race” Bannon · Matthew Cox · Marc Dreier · Solomon Dwek · Billie Sol Estes · Peter Foster · Robert Hendy-Freegard · Christian Karl Gerhartsreiter · Robert Douglas Hartmann · Mark Hofmann · James Hogue · Norman Hsu · Clifford Irving · Samuel Israel III · Sante Kimes · Bon Levi · Bernard Madoff · Matt the Knife · Sergei Mavrodi · Barry Minkow · Richard Alan Minsky · Semion Mogilevich · Lou Pearlman · Tom Petters · Peter Popoff · Scott W. Rothstein · Steven Jay Russell · Michael Sabo · Casey Serin · Kevin Trudeau
Joseph Weil
Born July 1, 1875
Harrison and Clark street, Chicago
Died February 26, 1976
Chicago
Nationality United States
Other names Yellow Kid
Occupation confidence men, con artist
Known for One of the most infamous of American confidence men.
Parents Otto Weil

Joseph “Yellow Kid” Weil (July 1, 1875—February 26, 1976)[was one of the most famous American confidence men of his era. Weil’s biographer, W. T. Brannon, believed Weil had an “uncanny knowledge of human nature.” Over the course of his career, Weil is said to have stolen over eight million dollars.

Weil was born in Chicago to Mr. and Mrs. Otto Weil. When Weil was seventeen, he left school and started working as a collector. Noticing that his co-workers were keeping small sums for themselves, he organized a protection racket: Weil wouldn’t tell for a share of the money.

Under the tutelage of Chicago confidence man Doc Meriwether, Weil started performing short cons in the 1890s at public sales of Meriwether’s Elixir, the chief ingredient of which was rainwater.[3]

The nickname “Yellow Kid” first was applied in 1903 and came from the comic “Hogan’s Alley and the Yellow Kid.” After working for some time with a grifter named Frank Hogan, Chicago alderman “Bathhouse John” Coughlin associated the pair with the comic: Hogan was Hogan, and Weil became the Yellow Kid. “There have been many erroneous stories published about how I acquired this cognomen,” Weil writes in his biography. “It was said that it was due to my having worn yellow chamois gloves, yellow vests, yellow spats, and a yellow beard. All this was untrue. I had never affected such wearing apparel and I had no beard.”

During his career, Weil worked with, among others, con men Doc Meriwether, Billy Wall, William J. Winterbill, Bob Collins, Colonel Jim Porter, Romeo Simpson, “Fats” Levine, Jack Mason, Tim North, and George Gross.

“Each of my victims had larceny in his heart,” explained Weil.

“The desire to get something for nothing has been very costly to many people who have dealt with me and with other con men,” Weil writes. “But I have found that this is the way it works. The average person, in my estimation, is ninety-nine per cent animal and one per cent human. The ninety-nine per cent that is animal causes very little trouble. But the one per cent that is human causes all our woes. When people learn–as I doubt they will–that they can’t get something for nothing, crime will diminish and we shall live in greater harmony.”

Weil died in Chicago in 1976 at the age of 100

Get-rich-quick schemes are extremely varied. For example, fake franchises, real estate “sure things”, get-rich-quick books, wealth-building seminars, self-help gurus, sure-fire inventions, useless products, chain letters, fortune tellers, quack doctors, miracle pharmaceuticals, Nigerian money scams, charms and talismans are all used to separate the mark from their money. Variations include the pyramid scheme, Ponzi scheme and Matrix sale.

Count Victor Lustig sold the “money-printing machine” which could copy $100 bills. The client, sensing huge profits, would buy the machines for a high price (usually over $30,000). Over the next twelve hours, the machine would produce just two more $100 bills, but after that it produced only blank paper, as its supply of hidden $100 bills would have become exhausted. This type of scheme is also called the “money box” scheme.

Salting or “to salt the mine” are terms for a scam in which gems or gold ore are planted in a mine or on the landscape, duping the greedy mark into purchasing shares in a worthless or non-existent mining company.[1] During the Gold Rush, scammers would load shotguns with gold dust and shoot into the sides of the mine to give the appearance of a rich ore, thus “salting the mine”. For a 19th-century example, see the Diamond hoax of 1872; for a modern example, involving imaginary gold deposits in Borneo, see Bre-X. Popularized in the HBO series Deadwood, when Al Swearingen and E.B. Farnum trick Brom Garret into believing gold is to be found on the claim Swearingen intends to sell him.

The Spanish prisoner scam – and its modern variant, the advance fee fraud or Nigerian scam – take advantage of the victim’s greed. The basic premise involves enlisting the mark to aid in retrieving some stolen money from its hiding place. The victim sometimes believes they can cheat the con artists out of their money, but anyone trying this has already fallen for the essential con by believing that the money is there to steal (see also Black money scam). Note that the classic Spanish Prisoner trick also contains an element of the romance scam (see below).

Many conmen employ extra tricks to keep the victim from going to the police. A common ploy of investment scammers is to encourage a mark to use money concealed from tax authorities. The mark cannot go to the authorities without revealing that they have committed tax fraud. Many swindles involve a minor element of crime or some other misdeed. The mark is made to think that they will gain money by helping fraudsters get huge sums out of a country (the classic Nigerian scam); hence marks cannot go to the police without revealing that they planned to commit a crime themselves.

In a recent twist on the Nigerian fraud scheme, the mark is told they are helping someone overseas collect debts from corporate clients. Large cheques stolen from businesses are mailed to the mark. These cheques are altered to reflect the mark’s name, and the mark is then asked to cash them and transfer all but a percentage of the funds (his commission) to the con artist. The cheques are often completely genuine, except that the “pay to” information has been expertly changed. This exposes the mark not only to enormous debt when the bank reclaims the money from their account, but also to criminal charges for money laundering. A more modern variation is to use laser-printed counterfeit cheques with the proper account numbers and payer information.

Certain infomercials feature enthusiastic hosts and highlights of satisfied customers’ testimony extolling the benefits of get-rich-quick methods such as internet auctioneering, real estate investment and marketing, for-profit toll phone business, classified advertisement and unique products of questionable value requiring active marketing by the paying customers. Infomercials which fall under the aforementioned descriptions are highly likely[citation needed] to be scams devised and engineered to “bamboozle” the unsuspecting viewers for the express purpose of enriching the scheme inventors who produced the infomercials which often grossly exaggerate their claims, in conjunction with the clips of satisfied customers’ over-excited testimonies with the superimposed captions of the alleged profits made.

Don Lapre, creator of “Money Making Secrets”, “The Ultimate Road to Success”, “The Greatest Vitamin in the World” and other schemes, was reported[citation needed] by Internet customer watchdog organizations Ripoff Report, Bad Business Bureau and Quackwatch, plus alternative newspaper publications such as Phoenix New Times as one of the premier confidence artists whose characteristic traits of overly positive attitude and over-enthusiastically cheerful and charismatic personality depend on the gullibility of the infomercial viewers to purchase the essentially useless products to gain substantial sums of profit by deception.

The wire or delayed-wire game, as depicted in the movie The Sting, trades on the promise of insider knowledge to beat a gamble, stock trade or other monetary action. In the wire game, a “mob” composed of dozens of grifters simulates a “wire store”, i.e., a place where results from horse races are received by telegram and posted on a large board, while also being read aloud by an announcer. The griftee is given secret foreknowledge of the race results minutes before the race is broadcast, and is therefore able to place a sure bet at the wire store. In reality, of course, the con artists who set up the wire store are the providers of the inside information, and the mark eventually is led to place a large bet, thinking it to be a sure win. At this point, some mistake is made, which actually makes the bet a loss. The grifters in The Sting use miscommunication about the race results to simulate a big mistake, and the bet is lost.[2]

Persuasion tricks

Persuasion fraud, when fraudsters persuade people only to target their money, is an old-fashioned type of fraud. It received high attention in Sweden around 1950 when a man named Gustaf Raskenstam had relationships with more than a hundred lonely women, and had been engaged to many of them, often several at the same time. He was eventually imprisoned for fraud. His contact ads usually had the headline “Sun and spring” (“sol och vår” in Swedish). This type of behaviour has since been called “sol och vårande” in Swedish.

Missionary conspiracy

A missionary conspiracy is a scam that involves illegitimate missionaries who are part of a cult that converts an entire community to quasi-religious beliefs. This usually involves an authority figure like Jim Jones who then uses his authority to abuse followers or to use them for gain. Usually these communities are rural, isolated, and have no money, instead they are used for manual labor, in particular on plantations and manufacturing. This is referred to as a “conspiracy” because of the difficulty to prove and the scale of the scam. These faux missionaries tend to be the representative of these communities to and from the outside world which includes the handling of money. In addition, community members either revere the missionaries as people of their new deity or refuse to admit they had fallen victim to the scam. This scam is particularly attributed to cults with strong authority figures and has taken place in Asia, Africa, Central and South America. Unlike the plot of the Poisonwood Bible no mainline Evangelical Christian denomination has ever been tied to such a scam.

Romance scam

The traditional romance scam has now moved into internet dating sites. The con actively cultivates a romantic relationship which often involves promises of marriage. However, after some time it becomes evident that this Internet “sweetheart” is stuck in his home country, lacking the money to leave the country and thus unable to be united with the mark. The scam then becomes an advance-fee fraud or a check fraud. A wide variety of reasons can be offered for the trickster’s lack of cash, but rather than just borrow the money from the victim (advance fee fraud), the con man normally declares that they have checks which the victim can cash on their behalf and remit the money via a non-reversible transfer service to help facilitate the trip (check fraud). Of course, the checks are forged or stolen and the con man never makes the trip: the hapless victim ends up with a large debt and an aching heart. This scam can be seen in the movie Nights of Cabiria.

Gold brick scams

Gold brick scams involve selling a tangible item for more than it is worth; named after selling the victim an allegedly golden ingot which turns out to be gold-coated lead.

1883 “No Cents” Liberty Head nickel

The 1883 “No Cents” Liberty Head nickel scam was developed by con artists that electroplated Liberty Head nickels, intending to make storeowners believe that the gold-plated nickel was a $5 coin.

Coin collecting

The coin collecting scam is a scam preying on inexperienced collectors. The conman convinces the mark by stating that a high-priced collection is for sale at a lower amount. The coin collector then buys the entire collection, believing it is valuable.

Pig-in-a-poke

Pig-in-a-poke originated in the late Middle Ages. The con entails a sale of a (suckling) “pig” in a “poke” (bag). The bag ostensibly contains a live healthy little pig, but actually contains a cat (not particularly prized as a source of meat). If one buys the bag without looking inside it, the person has bought something of less value than was assumed, and has learned firsthand the lesson caveat emptor. “Buying a pig in a poke” has become a colloquial expression in the English language, meaning “to be a sucker”. Dutch, German, Scandinavian, Russian and Polish speakers employ the expression “buying a cat-in-the-bag” when someone buys something without examining it beforehand. In Sweden, Finland and Estonia, the “cat” in the phrase is replaced by “pig”, referring to the bag’s supposed content, but the saying is otherwise identical. This is also said to be where the phrase “letting the cat out of the bag” comes from, although there may be other explanations.

Thai gem

The Thai gem scam involves layers of con men and helpers who tell a tourist in Bangkok of an opportunity to earn money by buying duty-free jewelry and having it shipped back to the tourist’s home country. The mark is driven around the city in a tuk-tuk operated by one of the con men, who ensures that the mark meets one helper after another, until the mark is persuaded to buy the jewelry from a store also operated by the swindlers. The gems are real but significantly overpriced. This scam has been operating for 20 years in Bangkok, and is said to be protected by Thai police and politicians. A similar scam usually runs in parallel for custom-made suits. Many tourists are hit by conmen touting both goods.

People shopping for pirated software, illegal pornographic images, bootleg music, drugs, firearms or other forbidden or controlled goods may be legally hindered from reporting swindles to the police. An example is the “big screen TV in back of the truck”: the TV is touted as “hot” (stolen), so it will be sold for a very low price. The TV is in fact defective or broken; it may, in fact, not even be a television at all, since some scammers have discovered that a suitably decorated oven door will suffice[3]. The buyer has no legal recourse without admitting to attempted purchase of stolen goods. This con is also known as “The Murphy Game”.

White van speaker

In the white van speaker scam, low-quality loudspeakers are sold, stereotypically from a white van, as expensive units that have been greatly discounted. The salesmen explain the ultra-low price in a number of ways; they may, for instance, say that their employer is unaware of having ordered too many speakers, so they are sneakily selling the excess behind the boss’s back. The scam may extend to the creation of Web sites for the bogus loudspeaker brand, which usually sounds similar to that of a respected loudspeaker company. The “speakermen” are ready to be haggled down to a seemingly gigantic discount, because the speakers they are selling, while usually technically functional, actually cost only a tiny fraction of their “list price” to manufacture.

Extortion or false-injury tricks

Badger game

The badger game extortion is often perpetrated on married men. The mark is deliberately coerced into a compromising position, a supposed affair for example, then threatened with public exposure of his acts unless blackmail money is paid.

Clip joint

A clip joint or fleshpot is an establishment, usually a strip club or entertainment bar, typically one claiming to offer adult entertainment or bottle service, in which customers are tricked into paying money and receive poor, or no, goods or services in return. Typically, clip joints suggest the possibility of sex, charge excessively high prices for watered-down drinks, then eject customers when they become unwilling or unable to spend more money. The product or service may be illicit, offering the victim no recourse through official or legal channels.

Foreign object in food

This scam involves a patron ordering food in a restaurant, and then placing a bug or foreign object in the food. The patron complains loudly to the restaurant managers and threatens to sue. Sometimes the patron receives a free meal or additional compensation, or tries to blackmail the restaurant. A notable attempt to perform this scam which failed was when a woman placed a severed finger in a bowl of chili and attempted to extort money from a fast food chain The scam was also featured in the films Victor/Victoria, Heartbreakers and Minbo.

Hydrophobia lie

The hydrophobia lie was popular in the 1920s, in which the con man pretended to have been bitten by the mark’s allegedly rabid dog.

Insurance fraud

Insurance fraud includes a wide variety of schemes which attempt insureds to defraud their own insurance carriers, but when the victim is a private individual, the con artist tricks the mark into damaging, for example, the con artist’s car, or injuring the con artist, in a manner that the con artist can later exaggerate. One relatively common scheme involves two cars, one for the con artist, and the other for the shill. The con artist will pull in front of the victim, and the shill will pull in front of the con artist before slowing down. The con artist will then slam on his brakes to “avoid” the shill, causing the victim to rear-end the con artist. The shill will accelerate away, leaving the scene. The con artist will then claim various exaggerated injuries in an attempt to collect from the victim’s insurance carrier despite having intentionally caused the accident. Insurance carriers, who must spend money to fight even those claims they believe are fraudulent, frequently pay out thousands of dollars–a tiny amount to the carrier despite being a significant amount to an individual–to settle these claims instead of going to court.[5]

A variation of this scam occurs in countries where insurance premiums are generally tied to a Bonus-Malus rating: the con artist will offer to avoid an insurance claim, settling instead for a cash compensation. Thus, the con artist is able to evade a professional damage assessment, and get an untraceable payment in exchange for sparing the mark the expenses of a lowered merit class.

The con can take up an insurance policy while traveling then claim theft when no wrong doing has occurred. The con will approach the police and create a false statement to fulfill the requirements of the insurance policy.

Melon drop

The melon drop is a scam in which the scammer will intentionally bump into the mark and drop a package containing (already broken) glass. He will blame the damage on the clumsiness of the mark, and demand money in compensation. This con arose when artists discovered that the Japanese paid large sums of money for watermelons. The scammer would go to a supermarket to buy a cheap watermelon, then bump into a Japanese tourist and set a high price.

Gambling tricks

Barred winner

Visitors to Las Vegas or other gambling towns often encounter the barred winner scam, a form of advance fee fraud performed in person. The artist will approach his mark outside a casino with a stack or bag of high-value casino chips and say that he just won big, but the casino accused him of cheating and threw him out without letting him redeem the chips. The artist asks the mark to go in and cash the chips for him. The artist will often offer a percentage of the winnings to the mark for his trouble. But, when the mark agrees, the artist feigns suspicion and asks the mark to put up something of value “for insurance”. The mark agrees, hands over jewelry, a credit card or their wallet, then goes in to cash the chips. When the mark arrives at the cashier, they are informed the chips are fake. The artist, by this time, is long gone with the mark’s valuables.

Fake reward

The fake reward scam involves getting the mark to believe he has won some prizes after being randomly chosen. He is then required to get to a specific location to ‘collect his prizes’. Once there, he is told that he only has to sign some papers to receive the rewards. These papers can range from agreeing to financial fraud or signing up of memberships.

Fiddle game

The fiddle game uses the pigeon drop technique. A pair of con men work together, one going into an expensive restaurant in shabby clothes, eating, and claiming to have left his wallet at home, which is nearby. As collateral, the con man leaves his only worldly possession, the violin that provides his livelihood. After he leaves, the second con man swoops in, offers an outrageously large amount (for example $50,000) for such a rare instrument, then looks at his watch and runs off to an appointment, leaving his card for the mark to call him when the fiddle-owner returns. The mark’s greed comes into play when the “poor man” comes back, having gotten the money to pay for his meal and redeem his violin. The mark, thinking he has an offer on the table, then buys the violin from the fiddle player who “reluctantly” agrees to sell it for a certain amount that still allows the mark to make a “profit” from the valuable violin. The result is the two conmen are $5,000 richer (less the cost of the violin), and the mark is left with a cheap instrument. This trick is also detailed in the Neil Gaiman novel American Gods and is the basis for The Streets‘ song “Can’t Con an Honest John”. It was also shown in an episode of Steptoe and Son in which Harold has a commode which he has purchased on his rounds (from a house wife). A passing antiques dealer sees the item and offers a large amount of money, but will return the next day. Mean time the husband of the wife from whom Harold bought the commode demands that Harold sells it back to him, instead Harold offers the man an amount of money to keep the commode, believing that he can sell it to the dealer later that day. In an episode of Hustle the fiddle game is acted out, using a dog instead of a fiddle. In the 1981 Only fools and horses episode “Cash and Curry“, the main character, Delboy, is tricked into paying £2000 for a statue worth £17, believing it to be worth £4000.[6]

Football picks

In the football picks scam the scammer sends out tip sheet stating a game will go one way to 100 potential victims and the other way to another 100. The next week, the 100 or so who received the correct answer are divided into two groups and fed another pick. This is repeated until a small population have (apparently) received a series of supernaturally perfect picks, then the final pick is offered for sale. Despite being well-known (it was even described completely on an episode of The Simpsons and used by Derren Brown in “The System”), this scam is run almost continuously in different forms by different operators. The sports picks can also be replaced with securities, or any other random process, in an alternative form. This scam has also been called the inverted pyramid scheme, because of the steadily decreasing population of victims at each stage.

Glim-dropper

The glim-dropper scam requires several accomplices, one of whom must be a one-eyed man. One grifter goes into a store and pretends he has lost his glass eye. Everyone looks around, but the eye cannot be found. He declares that he will pay a thousand-dollar reward for the return of his eye, leaving contact information. The next day, an accomplice enters the store and pretends to find the eye. The storekeeper (the intended griftee), thinking of the reward, offers to take it and return it to its owner. The finder insists he will return it himself, and demands the owner’s address. Thinking he will lose all chance of the reward, the storekeeper offers a hundred dollars for the eye. The finder bargains him up to $250, and departs. The one-eyed man, of course, can not be found and does not return. (Described in A Cool Million, or, The Dismantling of Lemuel Pitkin (1934) by Nathanael West). Variants of this con have been used in movies such as The Traveller (1997), Shade (2003), and Zombieland (2009).

Lottery fraud by proxy

Lottery fraud by proxy is a particularly vicious scam, in which the scammer buys a lottery ticket with old winning numbers. He or she then alters the date on the ticket so that it appears to be from the day before, and therefore a winning ticket. He or she then sells the ticket to the mark, claiming it is a winning ticket, but for some reason, he or she is unable to collect the prize (not eligible, etc.). The particular cruelty in this scam is that if the mark attempts to collect the prize, the fraudulently altered ticket will be discovered and the mark held criminally liable. This con was featured in the movie Matchstick Men, where Nicolas Cage teaches it to his daughter. A twist on the con was shown in Great Teacher Onizuka, where the more than gullible Onizuka was tricked into getting a “winning ticket”. The ticket wasn’t altered, instead the daily newspaper reporting the day’s winning numbers was rewritten with a black pen.

Three-card Monte

Three-card Monte, “find the queen”, the “three-card trick”, or “follow the lady”, is (except for the props) essentially the same as the centuries-older shell game or thimblerig. The trickster shows three playing cards to the audience, one of which is a queen (the “lady”), then places the cards face-down, shuffles them around and invites the audience to bet on which one is the queen. At first the audience is skeptical, so the shill places a bet and the scammer allows him to win. In one variation of the game, the shill will (apparently surreptitiously) peek at the lady, ensuring that the mark also sees the card. This is sometimes enough to entice the audience to place bets, but the trickster uses sleight of hand to ensure that they always lose, unless the conman decides to let them win, hoping to lure them into betting much more. The mark loses whenever the dealer chooses to make him lose. This con appears in the Eric Garcia novel Matchstick Men and is featured in the movie Edmond. The scam is also central to the Pulitzer prize-winning play “Topdog/Underdog.” It also appears in an episode of Everybody Hates Chris.

A variation on this scam exists in Barcelona, Spain, but with the addition of a pickpocket. The dealer and shill behave in an overtly obvious manner, attracting a larger audience. When the pickpocket succeeds in stealing from a member of the audience, he signals the dealer. The dealer then shouts the word “agua”, and the three split up. The audience is left believing that “agua” is a code word indicating the police are coming, and that the performance was a failed scam.

A variant of this scam exists in Mumbai, India. The shill says loudly to the dealer that his cards are fake and that he wants to see it. He takes the cards and folds a corner and says in a hushed voice to the audience that he has marked the card. He first places the bet and wins. Then he asks the others to place bets as well. When someone puts a lot of money the cards are switched.

Online scams

Main article: Internet fraud

Fake antivirus

Computer users unwittingly download & install a computer virus disguised as antivirus software, (usually through an ActiveX program) by following the messages which appear on their screen. The software then pretends to find multiple viruses on the victim’s computer, “removes” a few, and asks for payment in order to take care of the rest. They are then linked to con artists’ websites, professionally designed to make their bogus software appear legitimate, where they must pay a fee to download the “full version” of their “antivirus software“.

Phishing

A modern scam in which the artist communicates with the mark, masquerading as a representative of an official organization which the mark is doing business with, in order to extract personal information which can then be used, for example, to steal money. In a typical instance of phishing, the artist sends the mark an email pretending to be from a company (such as eBay). This email is formatted exactly like email from that business, and will ask the mark to “verify” some personal information at their website, to which a link is provided. The website itself is also fake but designed to look exactly like the business’ website. The site will contain an HTML form asking for personal information such as credit card numbers. The mark will feel compelled to give this information because of words in the email or the site stating that they require the information again, for example to “reactivate your account”. When the mark submits the form (not checking the URL), the information is sent to the swindler.

Other online scams include advance-fee fraud, bidding fee schemes, click fraud, domain slamming, various spoofing attacks, web-cramming, and online versions of employment scams and romance scams.

Other confidence tricks and scams

Art student

The art student scam is also very common in major Chinese cities. A small group of ‘students’ will start a conversation, claiming that they want to practice their English. After a short time they will change the topic to education and will claim that they are art students and they want to take you to a free exhibition. The exhibition will usually be in a small, well hidden rented office and the students will show you some pieces which they claim to be their own work and will try to sell them at a high price, despite the pieces usually being nothing more than an internet printout worth a fraction of their asking price. They will often try ‘guilt tricks’ on people who try to bargain the price.

Beijing tea

The Beijing tea scam is a famous scam in and around Beijing. The artists (usually female and working in pairs) will approach tourists and try to make friends. After chatting, they will suggest a trip to see a tea ceremony, claiming that they have never been to one before. The tourist is never shown a menu, but assumes that this is how things are done in China. After the ceremony, the bill is presented to the tourist, charging upwards of $100 per head. The artists will then hand over their bills, and the tourists are obliged to follow suit. Similar scams involving restaurants, coffee shops and bars also take place.

Big store

The big store scam is a technique involving a large team of con artists and elaborate sets. Often a building is rented and furnished as a legitimate and substantial business.[7]

Cell phone grab

Usually occurs outside airports or train stations at the pick-up curb, requires two cons and a getaway car. The con will approach the mark and claim that their ride isn’t here due to their plane or train being late or early, and that they don’t have the change to use a pay phone, or their own cell phone battery is dead. They ask the mark if they can use their cell phone to call, usually reassuring the mark by saying that the call is local and it will not cost them much. If the mark refuses, the con will try to guilt trip them. The moment the mark hands over their cell phone, the con makes a break for it, often hopping into a waiting car to make a quick getaway.

Change raising

Change raising is a common short con and involves an offer to change an amount of money with someone, while at the same time taking change or bills back and forth to confuse the person as to how much money is actually being changed. The most common form, “the Short Count”, has been featured prominently in several movies about grifting, notably Nueve Reinas, The Grifters, Criminal, and Paper Moon. A con artist shopping at, say a gas station, is given 80 cents in change because they lack two dimes to complete the sale (say the sale cost is $19.20 and the con artist has a 20 dollar bill). The con artist then goes out to their car and returns a short time later, with 20 cents. They return them, saying that they found the rest of the change to make a dollar, and asking for a bill so they will not have to carry coins. The confused store clerk agrees, exchanging a dollar for the 20 cents the con artist returned. In essence, the mark makes change twice. Another variation is to flash a $20 bill to the clerk, then ask for something behind the counter. When the clerk turns away, the con artist can swap the bill they are holding to a lesser bill. The clerk might then make change for the larger bill, without noticing it has been swapped. This was shown in The Grifters. The technique works better when bills are the same colour at a glance like, for instance U.S. dollar bills.

Counterfeit cashier’s check

In this scam the victim is sent a cashier’s check or money order for payment on an item for sale on the internet. When this document is taken to the bank it may not be detected as counterfeit for 10 business days or more, but the bank will deposit the money into your account and tell you that it has been “verified” or is “clear” in about 24 hours. This gives the victim a false feeling of security that the document is real, so they proceed with the transaction. When the bank does find that the check is counterfeit, they will come back to the customer for the entire amount of the check.

Diet and exercise

These claim that you can take pills and use weird gadgets to quickly lose weight and/or build muscle. The only thing which loses weight here, of course, is the mark’s wallet and bank account as they are milked for money for gimmicky exercise equipment or other weight-loss products.

Empty car lot

The scammers will find a vacant lot that is essentially used as free car parking and then start to charge people at the entrance, saying that the building is under new management and now chargeable.

False charity

A con artist will go door-to-door saying that the mark’s donation will help build better playgrounds, help starving children etc; thus the mark will pay the con artist. Sometimes the con artist will even print out fake papers explaining the good that they will be doing.

Gas can

The Gas can scam happens on the street or in a parking lot, usually near a big-box store or mall. The con artist is well-dressed, and carrying a gas can. You’ll hear a story, usually involving a wife or teenage offspring waiting in the car (or occasionally, teenage offspring home alone) and then a request for ten to twenty bucks for gas. Often, the con artist will ask for your address to “return” your money. A variation of this scam has the con artist claiming that his car was towed, and he needs money to retrieve it from the towing company.

Landlord

The landlord scam advertises an apartment for rent at an attractive price. The con artist, usually someone who is house-sitting or has a short-term sublet at the unit, takes a deposit and first/last month’s rent from every person who views the suite. When move-in day arrives, the con artist is of course gone, and the apartment belongs to none of the angry people carrying boxes.

Neighbor’s false friend

In the neighbor’s false friend scam, the con artist rings the mark’s door bell claiming to be a friend of a neighbor or someone who lives nearby and asks to borrow money for gas since they’ve left their wallet with all their money at their friend’s house and now there’s nobody home. The con artist is gambling that the mark knows the name of the “friend” and perhaps is an acquaintance so that it would be embarrassing to refuse assistance, but that the mark doesn’t know very much else about the “friend”, making verification difficult. Of course the con artist has just read the “friend’s” name on a mailbox or a door bell.

Paranoia

The paranoia scam is a scam involving the conman telling the mark various lies about different scams and instigating false attempts so that the mark, by now feeling worried and with no place to hide their money from fraud, turns to the conman (of all people) for help.

Pigeon drop

The pigeon drop, also featured early in the film The Sting, involves the mark or pigeon assisting an elderly, weak or infirm stranger to keep their money safe for them. In the process, the stranger (actually a confidence trickster) puts their money with the mark’s money (in an envelope, briefcase or sack) which the mark is then entrusted with. The money is actually not put into the sack or envelope, but is switched for a bag full of newspaper (etc). The mark is enticed to make off with the con artist’s money through the greed element and various theatrics, but in actuality, the mark is fleeing from their own money, which the con artist still has (or has handed off to an accomplice). In LOST this was Sawyer‘s preferred way of conning people out of money.

Pseudoscience and snake oil

In pseudoscience and snake oil scams, popular psychology confidence tricksters make money by falsely claiming to improve reading speed and comprehension using speed reading courses by fooling the consumer with inappropriate skimming and general knowledge tests. These popular psychology tricksters often employ popular assumptions about the brain and the cerebral hemispheres which are scientifically wrong, but attractive and plausible. A common myth is that we use only 10% of our brain.[8][9] Similar scams involve the use of brain machines to alter brain waves, and intelligence amplification through balancing the mind and body. See neurofeedback and Scientology.

Psychic surgery

Psychic surgery is a con game in which the trickster uses sleight of hand to apparently remove malignant growths from the mark’s body. A common form of medical fraud in underdeveloped countries, it imperils victims who may fail to seek competent medical attention. The movie Man on the Moon depicts comedian Andy Kaufman undergoing psychic surgery, and it can also be seen in an episode of Jonathan Creek as well as an episode of LOST where the character Rose travels to Australia in a last ditch effort to cure her cancer.

Rainmaker

The con artist (a “rainmaker”) convinces the mark to pay them to make something happen. If it happens, then the mark is convinced it is because they paid the rainmaker; if not, the rainmaker can say they need more money to do it. A major story arc in the third season of The Wire is Senator Clay Davis’ shakedown of the Barksdale Organization. There is also an example of this in the Quantum Leap episode “A Single Drop of Rain” from Season 4.

Real estate

The real estate scam may vary according to the type of real estate, but the common goal is that the con artist tricks the seller into thinking that they are going to buy or rent the property and make monthly payments. In reality, the con artist has no intention of paying anything. This will usually continue until they are caught or evicted, but the catch here is this is hard to prove in a criminal court; the only legal recourse the seller has is to file a lawsuit against the person responsible. However, the con artist will usually scam the seller for an amount below the cost of its recovery through litigation.

Recovery room

A recovery room is an unauthorised firm that cold calls investors and offers to buy their shares. The firm targeting the failed company’s investors is offering to recover their investments for free in return for the opportunity to provide them with recommendations on future investments.

These firms, often calling from outside the UK, are not authorised by the FSA to approach UK investors. Although they are commonly known as recovery rooms, they will not buy your shares or recover money you have invested through the failed company.

Rip deal

Rip deal is a common swindle in Europe in which con artists present themselves as potential investors, then attract victims with under-the-counter payments.

Robbed traveller

The robbed traveller scam usually takes place at airports and train stations. A person smartly dressed in suit and tie appears in distress and looks around bewildered, making sure the mark has noticed them. Then they approach and tell the story that their wallet or jacket has been stolen with all their money. They then appeal for help and ask if they can borrow a small amount of money for a taxi to their friend’s house or a hotel where they’re booked in, promising to pay it back as soon as they get access to their money. Experts at this game may even trick their mark into giving them the money in the belief that they are helping an upstanding member of society in genuine distress.

Street mechanic

The con artist approaches the mark’s car and says something is wrong with it – usually something the mark cannot immediately see – the bumper is turning into the wheel, for example. The con artist tells the mark that it is a very expensive fix, but that they are a mechanic and will fix it. Really, the con artist is creating an illusion, perhaps by sitting on the bumper. They “fix” the problem in minutes. They may ask for only a ride at first, but then pretend to call their boss and pretend that they are late for work and their boss is angry, and tell the mark they have lost a customer. The mark is made to feel guilty and grateful, and believe that they have been helped by a kind mechanic who has charged less than the normal hourly rate (albeit plus a hefty tip) to replace the customer they lost. This scam has been found in the streets of downtown Baltimore.

Subway attendant

An individual dressed to resemble a subway attendant stands near a subway ticket machine at a downtown stop. The individual approaches people who appear to be out-of-towners headed back to the airport, and asks if they need directions, how their stay was, etc. They offer to sell a ticket to the airport directly from a handful they are carrying; however, these are nearly used-up tickets collected from the trash. Victims find they need to pay again at the exit. This has been seen on MARTA in Atlanta. The scammer is imitating legitimate attendants at the airport who show travelers how to use the vending machines but don’t accept cash or give you tickets themselves.

Ticket tout

A common scam on the London Underground. The scammer will wait at the exit of a station and collect disused tickets (such as 1-day travelcards) claiming that they are collecting tickets for recycling or some other excuse. The scammer will then move to an area close to the ticket office where there is a long queue and offer to sell 1-day travelcards for a discounted price, leading customers to believe that they will make a saving and won’t have to queue. Generally, passengers aren’t victims of this as the tickets are legitimate although a recent crackdown on ticket fraud has led to station staff confiscating tickets from passengers.

Undercover cop

The undercover cop scam is a scam where a con artist masquerades as an undercover police officer, usually by stopping the mark’s vehicle and showing a fake badge, and tells the mark about a case they are investigating, and that the mark is a suspect. The conman asks for money to be checked, and when the mark is out of the vehicle, the con artist gets into the mark’s car and drives away, having made sure there was more time to escape than it would take for the mark to get back to their vehicle. This scam is usually done to tourists, variations include their whole luggage being transferred to the conman’s trunk “to be checked at a police station“, or a fake immigration agent, asking for papers and then for money to clear up the problem.

Taxi Touts

No Meter

The meter is apparently broken. This is used to set a fixed price. Insist on meter use before you or any of your luggage is placed in the cab.

Re-Negotiation of Price

This is very common outside of North America and Western Europe. You have apparently agreed to a price and the taxi drives away and minutes later a new price is demanded. You can either re-state the original price or tell the driver to stop the taxi and motion to leave without paying, which may re-establish the original price.

Meter Jumps

Be aware that drivers may bump the meter rate when you are not looking. Try to avoid falling asleep on the ride. Also if the driver needs to stop for fuel, the meter should be stopped or turned off while fueling. Try to note the fare before the meter is turned off and when the car is re-started (if it is turned off during re-fueling) the meter rate should be where it was before.

Not Allowed, Prohibited, etc

If you hear these words, they are likely trying to get you to agree to a rip-off rate. If negotiating does not work then just wait for another taxi (don’t worry, there’s lots!). [10]

Avoiding prosecution

  • Pitiful fraud: The con artist may tell his or her mark pitiful lies about his or her family, children etc; hence the mark feels sorry for him or her, and does not alert the police.
  • Family member: Some con artists target their own families, who feel obligated not to contact authorities, due to family ties.
  • Embarrassing enterprise: If the mark loses a small sum only, he or she may be unwilling to contact the authorities if the circumstances are embarrassing, e.g. if the mark wishes to avoid revealing his or her pornography stash to his or her spouse, notwithstanding its uselessness or worthlessness.
  • Greasy crimes: Petty crimes and scams that will in the worst cases only be punished by a fine, no jail time. Often the subject of Trailer Park Boys episodes.

 

 

 

 

References

  1. ^ Social Security Death Index,
  2. ^ a b Died, Time March 8, 1976
  3. ^ Joseph Weil. A Master Swindler’s Own Story. Trade Paperback. p. 352 pages. ISBN 9780767917377.
  4. ^ “Con Man by J.R.Weil and W.T.Brannon”. http://www.randomhouse.com/catalog/display.pperl?isbn=9780767917377&view=excerpt.
  5. ^ Streissguth, Thomas. Hoaxers & Hustlers, Minneapolis 1994; The Oliver Press, Inc. ISBN 978-0-06-112023-7
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