CON MEN
Inside Their Minds
CON MEN : INSIDE THEIR MINDS
CREDITS
Content Credits Doug Shadel’s AARP Outsmarting the Scam Artist: How to protect yourself from the most clever cons Dr. Leland Benton’s The mind of a con man: the psycholog y of lying
Photos credits Pages 28–29 www.dw.de.com media.naplesnews.com www.bbcnews.com www.tour-eiffel.net www.todoeltiempopasadofuemejor.com
Purpose To practice my graphic design skills.
TABLE OF CONTENTS
THE MIND OF A CON MAN Living in a fantasy world
9
Is fantasy a bad thing?
10
Causes of manifested behavior stemming
20
from living a life within a fantasy
20
EXAMPLES OF CON MEN Types 1 & 2 Con men
25
Type 1 con men
30
Other con men living today
38
Type 2 con men
42
The psychology of lying
44
DON’T FALL IN THEIR TRAP You have to know yourself
57
Quiz
58
Scoring
61
Factors that make us vulnerable
62
Summary of risk factors
61
How to spot a con artist
70
Common Scams
60
DEDICATION
This book is dedicated to the hundreds of public servants and volunteers who have devoted their lives to fighting fraud in all its forms.
“From the beginning of time man has used lies from everything such as war to love� - Dr. Leland Benton
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Con Men: Inside Their Minds
The Mind Of A Con Man
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Con Men: Inside Their Minds
Living in a
FANTASY WORLD I want to identify the main cause and reason behind con men and manipulators. It is living a fantasy life as if it were real and they have no remorse about it. It is a known fact, within the research conf ines of behavioral science, that the human subconscious mind can’t tell the difference between fantasy and reality. For example: your conscious mind knows that you are sitting in a movie theater watching a movie, but your subconscious mind does not and when a sad scene comes along, you respond with the same emotions as if the scene was real maybe you cry, get angry, or simply melancholy.
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Con men have no remorse. They are intentional in all.
ch
There have been many news stories recently dealing with
you to grow as a person. I took dancing lessons and would
people that have done horrible crimes, for example:
picture myself on the dance floor mimicking the dance
Sandy Hook Elementary School, Aurora, CO Movie
steps that my instructor taught me . This is an example
Theater killings, etc — and the questions usually raised
of a good fantasy and believe me it is fantasy since today
fi rst deal with violent video games, and the things that
I suck as a ballroom dancer (lol). I use my imagination
may have influenced behavior or cause these acts of
to fantasy that I’m good at dancing.
violence. Is this true? We shall see.
However, let me give you a more poignant example. Many years ago I was assigned a patient that had been
IS FANTASY A BAD THING?
officer of the US Military. The US Military had been
I have been a behavioral scientist for over 32-years and
aware of this man’s actions for some time but when he
the Chief Research Scientist at Applied Mind Sciences
showed up at Nellis Air Force Base, which is located on
and the question I am asked the most is this: “is fantasy
the outskirts of Las Vegas, they had him arrested. This
a bad thing?”
poor guy was really messed up. When I went to visit him
So here is my answer and listen closely because it is a qualified answer: “There is good fantasy and there is bad
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arrested in Las Vegas for impersonating a general flag
at Clark County Detention Center, he demanded that I stand at attention and address him as “sir”.
fantasy, but any fantasy, whether good or bad that causes
When I eventually made contact with his family, they
an individual to walk up and down within this fantasy
were completely dumbfounded over his behavior. He
and that manifests itself as outward behavior, is really
had always been a loving husband and father, worked
bad.” I will explain why. A good fantasy is one that causes
his job as an insurance executive for over 20-years, had
Con Men: Inside Their Minds
heat never been in trouble before; not even a parking ticket.
Then—whamo!—out of the blue, he pulls this stunt. I worked with this man for almost a year; got the charges dropped, in return for him going through treatment, and I learned some extraordinary things from talking to
this man that I would have never thought I would learn.
When this man was 18 years old, he applied for service in the US Army, but was rejected because of a perforated
eardrum. He really had wanted to join the US Army
and the rejection was apparently way too much for his
young mind to handle so he began a “secret” fantasy of being in the US Army and he was the best soldier the world had ever seen.
In his fantasy, as in all fantasies, everything is perfect. They tell themselves they are the best looking person, the most admired, you are never sick or have a bad hair day, and you can do anything and everything, and so on.
The Mind Of A Con
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Our subconscious mind cannot tell the difference between fantasy and reality
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Con Men: Inside Their Minds
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Con men live a fantasy life because they cannot achieve their fantasy in real life.
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Con Men: Inside Their Minds
In fact, after hundreds of hours of interviews with this
In today’s tough economic climate you have a plethora
man, if he could write a sentence he could have become
of situations that people feel helpless to control. College
one of the best action/adventure novelists on the planet;
students graduating have no jobs and more often than not
some of his stories were very exciting adventures.
a huge student loan debt to pay off. The American
It is important to note that his family knew none of this;
Dream has failed these young people.
his fantasy was truly a secret. Most people that pass
Companies are downsizing and layoffs are too common.
you on the street daily are living their lives within some
And even as economic conditions improve, many have
type of fantasy and their fantasies are secret too and
found they do not need to rehire these people that they
for the most part harmless unless the fantasy begins to
did quite well without them. Relationships are faltering.
manifest itself in outward behavior. So why do people
Young men and women are giving up on fi nding good
do this? And even if the fantasy life of an individual does
relationships and mates and are going off by themselves
not manifest itself in outward behavior, is there any harm
to build their lives alone.
in living a fantasy life?
In actuality, the list is endless and as the reasons stack
Allow me to answer the fi rst question, “why do people
up so do the fantasy lives for those who can still dream
do this?” The answer is fairly obvious; they do it because,
of being what they always wanted to be. Now to the second
in their minds, they cannot achieve their fantasy in real
question, “And even if the fantasy life of an individual
life. It is also an extreme form of self -entertainment that
does not manifest itself in outward behavior, is there any
can easily spin out of control.
harm in living a fantasy life?” The short answer is “yes” but more than likely not for the reasons you probably surmise. I will explain what I mean.
The Mind Of A Con
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Con artists aren’t in it to become you friend, even though it might seem that way at first. All they’re thinking about is your hard-earned money.
Fantasy life is free ; there is no effort expended, no money changes hands for training, and there is no recourse within a fantasy because everything is perfect. But, as the world defines, “Everything has a cost,” and the cost an individual pays is that he/she gives up in reality attempting to acquire their dream or goal. And why not? You can become anything you want in a fantasy but there are no guarantees offered in real life. And remember, fantasies are free; in real life there are costs to become anything. Time is investment, money paid in fees, tuition, books, and more. The human mind will always seek depravity unless checked by parents, friends, the law, and social mores, etc. This is why pornography is bad; if left unchecked, lust seeks a bigger and greater thrill that can lead ultimately to a serial killer or serial rapist. Step-by-step it spirals down into the pit of depravity.
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These causes are not set in stone, but they are a good place to start from.
CAUSES OF MANIFESTED BEHAVIOR It is easy to blame mental disease for a plethora of manifested behaviors and in many cases this would be true but not always. It makes a good defense in court but many cases claiming mental incompetence are being shot down by psychologist as being shams. Childhood Causes These are causes that develop within the course of a person’s upbringing. It takes into account many of the factors listed below including childhood trauma, maturity, and environment. How we are raised, where we are raised and the environment, all play a factor in a person’s eventual adult existence. Childhood Trauma Many children suffer from many types of childhood traumas including verbal mental and abuse, molestation, bullying, disease, and so many other things. These traumas can manifest themselves immediately or later on in adult life.
Child Rearing The way we are raised bears a good deal on how and what we become in our adult lives. Economic conditions have forced both parents into the workplace and children are left to themselves or day care facilities. The home environment also contributes to the problem especially if parents often fight a lot about finances, poor marital relations or whatever causes a tenuous home environment to be hostile. Maturity This is probably one of the greatest factors to why people embrace a fantasy life since a person’s maturity level bears a direct influence on how a person handles all situations in life. Remember, it is easy to be drawn into a fantasy life because everything in a fantasy life is perfect and free. Mimicking Behavior Patterns A child that grows up in a home of violence tends to be violent. Parents that smoke and drink tend to raise children that exhibit very similar behavior. Children will observe and mimic all types of behavior that they see their parents do as well as other adults and children.
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Con Men: Inside Their Minds
Environment The environment that we’re raised in
lies; this is a given, but the reasons behind the lie is what
and live is the second most important factor contributing
determines the extent of which a person will go to keep
to the withdrawal into a fantasy life. It is easy to retreat
his fantasy life going. In this case, the fantasy life is most
into a world that the person deems as perfect. We tend
important. Let me give you an example: I am going to
to dream of the perfect but live in the flawed! If we cannot
tell you a lie right now. Ready? I am the King of France!
change our physical environment then we can withdraw
Now you know this is a lie; France no longer has a mon-
into a world that is far more satisfying than the one we
archy. And I know that you know I am lying but I don’t
actually live in.
care because I am not in your world of reality; I am in
Self-Entertainment This is a contributing factor
my fantasy world and in my world I rule as king.
that cannot be dismissed since I see it occurring almost daily. In the past, we called it daydreaming and it was deemed seemingly innocuous. Today, we now know that this trait is practiced by individuals far more often than first believed. It has become the scourge of the workplace as individuals withdraw into their own worlds leaving workloads untouched. Pathological Liars It’s not a low self-esteem matter; in fact it usually is a case of too much self-esteem. And more and more cases are being recorded where the individual lies but is not considered a pathological liar. Everybody
The Mind Of A Con
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Their actions and conduct are purposeful, deliberate, and evil. They know exactly what they are doing to you.
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Con Men: Inside Their Minds
Examples Of Con Men
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Types 1 & 2
CON MEN Each type has different human behavioral traits yet shares some common traits too. I will describe both in detail in this chapter. I will also get into the psychology of lying and why this is the most important trait of a con man. You’ll be very surprised by what you’ll fi nd out. Diabolical is defined as “of, relating to, or characteristic of the devil: devilish—a diabolical plot ” and is one of the best descriptions of a con man to date. Con men are very diabolical and enjoy what they do. Their actions and conduct are purposeful and deliberate and they know full well of what they are doing.
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conf
They cannot hide behind some psychological disorder or claim some childhood trauma made them practice their deceptive trade. In a court of law, they are doomed
because they have no defense whatsoever. This can be
seen with some of the court cases that have been on TV.
Bernie Madoff received a heavy 150-year sentence for
his decades of deception and his actions left a good many people scratching their heads in wonder including his wife
and family as well as the regulators and the police. Bernie
Madoff knew full well what he was doing was a massive con game and lived within this game for decades even
lie to himself that he could continue it forever. Unfortunately the economy fell out and exposed him as well
as numerous other con men of a lesser degree of fame and fortune. Here is a list of Type 1 Con Men, some of
whom you know and can identify but others you have never seen before.
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Don’t think this can’t happen to you because it can.
nfuse Examples Of Con Men
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Charles Ponzi
TYPE 1 CON MEN
Became one of the most famous con men in American history. He discovered that he could buy foreign coupons at massively devalued prices and then resell them in the United States for a 400% profit.
Frank Abagnale He is a former cheque con artist, forger and imposter who, for fi ve years in the 1960’s, passed bad checks worth more than $2.5 million in 26 countries. The recent film Catch Me If You Can is based on his life.
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Con Men: Inside Their Minds
Joseph Weil He was one of the most famous con men in his era. He’s believed to have stolen over 8 million dollars.
Victor Lustig He was renowned as the Man who Sold the Eiffel Tower. At one point, Lustig convinced Al Capone to invest $50,000 with him.
Examples Of Con Men
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Born 1948
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Con Men: Inside Their Minds
FRANK ABAGNALE STOLE $2.5 MILLION DOLLARS
Abagnale didn’t limit his lies and deceit to the US, he conned and stole other people’s money in about 26 other countries.
Abagnale is a former cheque con artist, forger and imposter who, for five years in the 1960’s, passed bad checks worth more than $ 2.5 million in 26 countries. The recent blockbuster film Catch Me If You Can is based on his life. His first experience of fraud was as a youth when he used his father’s Mobil card to buy car parts that he would then sell back to the gas station for a lower price. He did not realize that his father was the one who had to foot the bill and when he was eventually confronted with the fraud, his mother sent him for four months to a juvenile correction facility. After moving to New York, Frank lived solely on the income of his fraudulent activities. One of his most famous tricks was to print his own account number on fake bank deposit slips so that when clients of the bank deposited money, it would actually go in to his account. By the time the banks realized what had happened, Frank had taken $40,000 of people’s money and ran. For two years, Abagnale travelled around the world free by masquerading as a Pan Am pilot. He was able to abuse the professional courtesy of other airlines to provide free transport for competing airline pilots if they had to move to another city at short notice. When he was nearly caught leaving a plane, he changed his facade to that of a Doctor. He worked as a medical supervisor for 11 months without detection. At other times he worked as a lawyer and a teacher. He currently runs Abagnale and Associates, a financial fraud consultancy company and is a multi-millionaire.
Examples Of Con Men
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Born 1890 Perhaps if people weren’t so greedy, they would have escaped his very popular money-making machine.
VICTOR LUSTIG
Lustig was renowned as the Man who Sold the Eiffel Tower. He was born in Bohemia but later moved to Paris where he was able to con people on his frequent journeys between Paris and New York. His first con was to show people a device that could print $100 bills. The only problem, he would tell them, is that it only prints one bill every six hours. Many people paid him enormous amounts of money (usually over $30,000) for the device. In fact, the device contained two real hidden $100 bills — once they were spat out by the machine it would produce only blank paper. By the time the buyers discovered this, Lustig was well gone with their money. In 1925, as France was recovering from the war, the upkeep of the Eiffel tower was an almost unbearable expense for the city of Paris. When Lustig read about this in a paper, he came up with his most brilliant idea. After forging government credentials, he invited six scrap metal dealers to a secret meeting in a hotel. He explained that the City could not afford to keep the tower and that they had to sell it for scrap. He told them the secrecy of the
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Con Men: Inside Their Minds
meeting and all future dealings was due to the fact that the public may become distressed at the idea of the removal of the tower. Of course, they all fell for it. And why wouldn’t you fall for it, really? While it seems implausible, at the time the tower was built it was meant to be temporary and this happened just 18 years after the original date for removal of the grand tower. Lustig took the dealers in a limousine to tour the Eiffel Tower. One of them, Andre Poisson was convinced that the tale was legitimate and he handed over the money. When he realized he had been conned, he was too embarrassed to tell the police and Lustig escaped with the money. One month later, he returned to Paris to try the whole scam again. This time it was reported to the police but Lustig managed to escape. At one point, Lustig even convinced Al Capone to invest $50,000 with him. He stored the money in a vault and returned it two months later, stating that the deal had
SOLD THE EIFFEL TOWER
fallen through. Capone, so impressed by Lustig’s honesty gave him $5,000 for his effort. He died in 1947.
Examples Of Con Men
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His most powerful tool was people’s gullibility. They gave in right away.
Joseph “Yellow Kid” Weil was one of the most famous
The next day he was director of Elysium Development
con men in his era. Over the course of his career he is
and promising land to innocent believers while robbing
believed to have stolen over 8 million dollars. In his first
them in recording and abstract fees. Or he was a chemist
job as a collector, he realized that his co-workers were col-
par excellence, who had discovered how to copy dollar
lecting their debts but keeping a little part of the money
bills; promising to increase your wealth, he would lie
for themselves. Weil started a protection racket—offering
about multiplying your bills and then take the booty once
not to report their activities in return for a small portion
the police arrived. From his own hand he writes:
of what they were taking.
“The desire to get something for nothing has been
He also used phony oil deals, women, fixed races, and
very costly to many people who have dealt with me and
an endless list of other tricks to steal from an increasingly
with other con men. But I have found that this is the
gullible public. He could change his persona daily to
way it works. The average person, in my estimation, is
further his gains: one day he was Dr. Henri Reuel, a
ninety-nine per cent animal and one per cent human.
noted geologist who travelled around and told his hosts
The ninety-nine per cent that is animal causes very little
that he was a representative for a big oil company. He
trouble. But the one per cent that is human causes all
would drain them of the all their cash
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.”
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Con Men: Inside Their Minds
Born 1877
JOSEPH WEIL STOLE $8 MILLION DOLLARS Examples Of Con Men
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Born 1882 Ponzi, an Italian immigrant to the United States became one of the most famous con men in American history. While many people do not know the name Ponzi, the Ponzi Scheme is extremely well known and continues today in Internet Make Money Fast schemes. His early life is not entirely known as he was prone to fabricate stories about it. What is known is that he spent a short amount of time at the University in Rome and, after dropping out, caught a boat to Boston, USA where he arrived with $2.50 in his pocket. His early years in the United States were troublesome. He began working at a restaurant but was soon fi red for playing tricks with the bills and cheating customers. His next job was working in a bank in Canada that catered to Italian immigrants. His knowledge of numbers helped him to do very well there. Unfortunately it turned out that the owner of the bank was stealing money from newly opened savings accounts to pay the interest on the interest bearing accounts and to cover bad investments. The bank owner eventually fled to Mexico and left Ponzi jobless.
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Con Men: Inside Their Minds
CHARLES PONZI SOLD FAKE STOCKS
Ponzi realized he could take advantage of people including his friends.
After writing a fraudulent cheque and spending some
People soon began to become suspicious and the press
number of years in prison, Ponzi wanted to be wealthy,
was starting to publish negative articles about him.
but it would cost him more than he thought.
This was inevitable and people were starting to demand
Once he had settled in to life on the outside, he discovered postal reply coupons through a letter that was sent to him from abroad. He realized that he could buy foreign coupons at massively devalued prices (because of price fixing after the war) and then resell them in the United States for a 400% profit. This was arbitrage and it was legal. Ponzi began canvasing friends and acquaintances for money—promising them a at least 50% return or a
their money. Shortly after, federal agents raided his place and shut it down. No stock of stamps was found and everyone that had invested their money with Ponzi lost every penny. It is probably that he lost tens of millions of dollars. Ponzi plead guilty of mail fraud and was sent to prison. After one escape he was returned to jail to complete his sentence. He was eventually deported back to Italy and he died there in poverty in 1949.
doubling of their money in 90 days. He started his own company, the Securities Exchange Company, to promote the scheme and lies to the public. The word about the this investment quickly spread and before long Ponzi was living in a luxurious mansion. This was bringing in cash at a fantastic rate, but the simplest financial analysis showed that he wasn’t making money, he was losing it rapidly. For every dollar he took in, he went more deeply into debt.
Examples Of Con Men
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CRAGNOTTI DREIER FOSTER FREEGARD HOGUE KIMES MATT KUNES MADOFF MINKOW MINSKY PEARLMAN
Type one con men’s actions are deliberate and purposeful. They all know they are conning people and they all know that they are in it for pecuniary gain.
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CON MEN LIVING TODAY
Frank Abagnale U.S. check forger
Sante Kimes He wasn’t just a con
Lou Pearlman (1954) Former
and impostor; his autobiography was
artist, he was also convicted of fraud,
boy band impresario and convicted
made into the famous movie called
robbery, murder, and over 100 other
for perpetrating a long-running
Catch Me If You Can.
crimes that we’re just as bad.
Ponzi scheme.
Sergio Cragnotti (1940) Former
Matt the Knife (1981) Matt is
Steven Jay Russell (1957) He
Italian industrialist and president of
an American-born con artist, card
impersonated several individuals in
a football team who masterminded the
cheat and pickpocket who, from the
order to escape from a Texas prison.
Cirio bankruptcy.
ages of approximately 14 through 21,
He also embezzled over hundreds of
bilked dozens of casinos, corporations
thousands of dollars from the North
and at least one Mafia crime family.
American Medical Management
Marc Dreier (1950) Founder of attorney firm Dreier LLP. Convicted of selling approximately $700 million
Steven Kunes (1956) Former
worth of fictitious promissory notes,
television screenwriter with convictions
and other crimes.
for forgery, grand theft, and false use
Kevin Foster (1958/59) British investment fraudster, convicted of running a Ponzi scheme. Hendy-Freegard (1971) This con artist kidnapped people by impersonating an MI5 agent and then conning them out of their money. James Arthur Hogue (1959) U.S. impostor who most famously entered Princeton University by posing as an orphan that had taught himself.
of financial information. In 1982 he attempted to sell a faked interview with J. D. Salinger to People magazine. Bernard Madoff (1938) Former American stock broker and another chairman of the NASDAQ stock market who admitted to the operation of the largest Ponzi scheme in history. Richard Allen Minsky (1944) Scammed female victims for sex by pretending to be jailed family members over the phone.
Corporation. Best known for passing as a dying AIDS person in order to transfer out of prison, only to be caught after later trying to appeal his life-partner Phillip Morris’ jail sentence. His story inspired a movie titled: “I Love You Phillip Morris” Calisto Tanzi (1938) Former Italian industrialist and president of Parmalat, which he led to one of the costliest bankruptcies in history. Kevin Trudeau (1963) US writer and billiards promoter, convicted of fraud and larceny. He’s best known for late-night infomercials and books about natural cures.
Examples Of Con Men
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TYPE 2 CON MEN
Fraud from cons is defined as intentional deception. It’s done for personal gain or to damage another individual in any way.
I call Type 2 people “individuals” rather than con men
I consider Type 2 individuals more even dangerous. The
for the simple fact that many Type 2 individuals are not
fact of the matter is that with the advent of the Internet
purposeful in their actions to committing a crime. The
and having information at your fingertips, people allow
ARE purposeful in their actions to manipulate but not
others to do their thinking. I had a staff manager and
insofar as for the purpose of pecuniary gain in any form.
co-worker years ago that was a master manipulator and
Type 2 individuals are manipulators and some are very good at it and practice it daily. There manipulators can be anyone from your mommy, other family members, friends, co-workers and more. They hide their actions behind the facade of only “trying to help” when in reality,
do your thinking for you.” When I pointed out that this was not the way to manage my people, her response was, “It works for me and I have managed this way for years.” Needless to say, she wasn’t going to change.
they are “only trying to harm.” They are not diabolical
Candidly, I was dumbfounded by her response and just
but they are immature and hurtful in their actions. The
looked at her before I replied, “What has worked for you?
reasons behind their actions are as varied as the individ-
You have been married three times, your kids don’t even
uals themselves and depending on the relationship; the
talk to you, you have the highest employee turnover in the
reasons can be jealousy, hate, envy, revenge, enjoyment
company and I can bet even your dog hates your guts.”
in hurting others, and wanting to bring others down to
She then stated emphatically that I could not talk to her
their level, and more.
in that manner and stormed away so I fired her. She
Like I stated in my introduction, chances are that you may never come in contact with a Type 1 con man, but you do come in contact with Type 2 individuals daily.
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always used the saying, “I didn’t hire you to think; I will
Con Men: Inside Their Minds
then filed a lawsuit against me and the company, which she lost horribly and to this day, has never been hired by another company in a managerial position.
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THE PSYCHOLOGY OF LYING One of the most perplexing human conditions is why people find a need to lie, cheat and deceive. Deception has become a lifestyle and more people spend their lives within a web of deception than outside of it. They have built whole worlds within their existences and many have no idea how it occurred or how to stop it. In this book, I want to address the subject of lies, cheats and deception in detail and I am quite certain you will be amazed. One would think that lies, cheating and deception are really one-in-the-same but they are not and like I said, you will be amazed at just how distinct the reasons behind all three really are and how compelling they are to break. The problem of “trust’ between genders has become so severe that each gender is literally giving up on relationships and going off to form family units without the opposite gender in the picture. Women are using the services of sperm banks to sire children and men are choosing
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Con Men: Inside Their Minds
surrogate mothers. The question of “why” has been a part of the conscience of man since the dawn of time. We then seek answers, better solutions, progress, increased knowledge and more. But more often than not, most of our questions of “why” now centers on personal behavioral traits and habits that perplex us. Candidly, most people have no idea why they do the things they do so in this book I am going to explain in detail why you lie, cheat and deceive and how to overcome these perplexing problems. Johnny Depp said: I’m dishonest and you can always trust a dishonest man to be dishonest. Honestly, it’s the honest ones you have to watch out for”. Where is the gain for people who lie, cheat and deceive? This is an important question to ask too. A liar, cheater and deceiver does perceive a big gain in their behavior, otherwise they would not do what they do. This perception is a wrongful belief system and hence; their gain is a false.
Con men believe they are superior to other people, and that others simply don’t have the intelligence to catch them.
Examples Of Con Men
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The criminal mind has convinced itself that getting something for nothing is better than getting it in a lawful manner.
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manipulation Part ??
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But candidly, even a false gain is worthy of their actions
not believe how exposed the average citizen is today.
even if this appears silly on the surface. In essence the
Society has come to rely on computers, cell phones, and
very first person they deceive is themselves. The greatest
computer-run public systems such as traffic lights, food
fraud the world has ever know is the person practicing
distribution, water supply and much more in such a way
deception because they are only fooling themselves into
that any disruption of these services jeopardizes our
believing that this is a lifestyle worth pursuing. Here
quality of life.
is an excerpt from my book: In today’s world, fraud is running rampant. But in actuality, fraud is not new concept. From the beginning of time man has used lies from everything such as war to love. In the animal kingdom, animals use deception in order to protect themselves which is done by camouflage and more. The high technology of our times makes access to all forms of information almost instantaneous and the news media sensationalizes fraud to a point of frenzy.
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People make use of Wi-Fi systems inside their homes, in public places such as libraries and Starbucks, which make them huge targets for hackers and crackers. As a behavioral scientist, I have studied the criminal mind and have made many conclusions. Recently we busted a voyeur using a wireless camera to spy on a Hooters waitress while she was undressing in her apartment. We caught him a couple of blocks away in his car with a handheld viewing device. When I played
No one seemingly escapes fraud; everyone on the planet
back what he had seen for the waitress, her comment was,
has been deceived in some manner. As Chief Forensics
“Why? He could see more on the Internet.” And yes, it is
Investigator for ForensicsNation.com, I compile and
true, you can Google just about any body part you want
preserve evidence of cyber-crime fraud all the time.
and see more on the Internet but the waitress missed
Cyber crime is rampant too and growing; you would
the one important factor that causes crime—the thrill
Con Men: Inside Their Minds
“
Con men believe that they are superior to other people, and that others simply don’t have the intelligence to catch them.
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They confuse your mind. They contort the truth. They convince you to trust. They convey a lie. They con you.
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Con Men: Inside Their Minds
of getting away with something that is forbidden! When
reality of the high monthly payment takes a back seat
a person thinks of fraud, rarely do they ever think along
to the perception of the automobile being a status
the lines of defrauding themselves but yet this is the
symbol. People overeat to assuage some pain due to stress
most common occurrences of fraud.
and anxiety. They deceive themselves into believing that
Self deception runs rampant in our respective psyches; the ability to deceive ourselves cannot be minimized.
eating takes their minds off their problems. They lie, gossip, and deceive everyone who’s around them
This book addresses this self deception and our inher-
This is the main cause of bullying and malicious gossip.
ent need to defraud ourselves. We defraud ourselves in
We all do it; maybe not to a point where something
many ways; too many to list here but here is a partial list:
bad occurs like suicide, but we all still do it. Without a
the way we eat, how much we eat, our diets in general,
doubt, we deceive ourselves the most when it comes to
our looks and beliefs, our need to be loved, sex, our need
looks and beauty. Everything from anorexia to tanning
to achieve, and more. The total essences of our lives
to the clothes we wear top the list of self deception
are completely affected by self deception; our personal
due to concerns over how a person looks. Why are physi-
existences cannot be lived without the deceptions we have
cal things leading the list of self deceptions? Why aren’t
created in our minds.
the mental things at the top? After all, all of our self
Let me give you an example: A person will buy a car symbol of success. In many people’s minds, a high-priced car means they “made it” but the reality is they haven’t made it at all unless you count making themselves a slave to the monthly bill that pays for the automobile. The
deceptions originate in the subconscious mind. In this book, I will attempt to answer these questions and more. I will examine our need for self deception and the results of practicing this interesting human trait. I offer examples for you to ponder and that will demonstrate the core essential of my premises. None of what I present must Examples Of Con Men
53
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Con Men: Inside Their Minds
be taken as a given; deception is subjective, which means
because I write a good many reviews. No amount of
it becomes anything you want it to become. The
reasoning appeased these people so I reported them to
objective thing is studying my core essential premises
Amazon along with a plethora of authors that they had
and weighing them against your own existence. A deep
also attacked. I fi led a criminal stalking charges and a
examination of yourself may become painful but you
federal district lawsuit for damages. You should have
will quickly realize that your own self deceptions rob
heard the howl and the cry from this gang of people.
you of a quiet and peaceful existence. One objective
They wrote to Amazon to complain that I had targeted
fact is quite persistent throughout this book—the fraud
them and were being unfair fi ling criminal charges and
is you! Self-Deception is rampant and it isn’t going to
a civil lawsuit. Amazon’s response was to tell them not
go away as long as the person practicing it perceives it
to harass their authors with any unfounded accusations,
as something of value. It is quite easy to lie to yourself
in other words, tough, you are on your own.
and a person can rationalize this deception in so many ways that it literally boggles the mind. Even with the facts known and presented to the person, the urge and need to keep the deception going is huge.
Don’t forget to take the quiz to see if you’re vulnerable.
Now, this gang perceived they were doing good when all they were doing was putting on a false front for what they really wanted to do, which was harass authors. They cared nothing about the reviews; they only wanted
Let me give you an example about Amazon.com. I was
the authors to engage them in the forum where this gang
personally attacked in an Amazon forum by a group
could literally “tear them apart’ and ruin their brand
that had appointed themselves as Amazon Review Cops.
and reputation. What they didn’t expect was me! This
They were harassing authors claiming that their reviews
“homey” don’t play no games and this gang never even
of their books were faked and they were paid reviews.
considered the consequences of an author fighting back.
They went on to accuse me as being a “paid reviewer”
It was so shocking to them that the majority of the gang Examples Of Con Men
55
56
Con Men: Inside Their Minds
Don’t Fall In Their Trap
Part ??
57
58
Con Men: Inside Their Minds
You have to
K NOW YOURSELF wrote to me apologizing for their actions and asking to be removed from the suit. My response: “no way!” Each gang member is accountable for their actions and they will pay the price for ruining brands. Many of us read about people being scammed and think, “It couldn’t happen to me. I’m too smart, right?” Wrong. Scientists have learned fraud vulnerability may be less about your IQ and more about behavioral factors such as how often you expose yourself to the market. It also has to do with psychological factors such as how easily you get excited or whether you tend to make snap decisions based on emotion. Intelligence alone simply does not explain why so many very smart clearly smart consumers are defrauded every day.
Part ??
59
THE FRAUD-VULNERABILITY QUIZ & HOW TO SCORE IT This chapter will provide more details about the specific attributes and behaviors that can lead to victimization based on almost a decade of fraud research. Let’s begin with a quiz that gauges your vulnerability to fraud. Answer each question by checking the box that you feel corresponds to your answer. Don’t think too much about it or worry if it is the right answer. After you’re finish taking the quiz, you can proceed to scoring it. While this quiz does not predict future victimization, it does reflect many of the fraud risk factors found by social science researchers over the years. The scoring key can be found in Appendix A. Each question has at least one answer choice that may result in a vulnerability point. The lowest score possible is zero. The highest score possible is 17 vulnerability points. Anyone who scored 0–5 points is likely to be at lower risk of getting victimized. Scores of 6–11 represent moderate risk, and a score of 12 points or more represents a higher risk of victimization.
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Con Men: Inside Their Minds
1
In the past 12 months, have you sent away for any free
Yes
promotional material in response to a TV infomercial,
No
+1
radio, Internet, or newspaper ad?
2
In the past 12 months, have you entered your name in a
Yes
drawing to win a free prize, gift, or trip?
No
3
In the past 12 months, have you attended a business
Yes
opportunity or investment seminar that offered a free
No
+1
+1
meal or other free incentive to listen to them?
4
In the past 12 months, have you opened and read most
Yes +1
of the mail you’ve received, including advertisement?
No
5
Which of the following statements is most true for you
I look at all my options I make decisions quickly
Don’t Fall In Their Trap
61
6 7
Which of the following would interest you enough to
Everyone is doing it.
want to hear more information about the offer (check
Has solid track record.
all that apply)?
Registered with BBB.
Have you ever spent money on any of the following
An informercial offer
(check all that apply):
Commodity investments Gold coins
8
Are you signed up for the Do Not Call List?
9
In the past 12 months, have you asked for references
Yes
and personally checked references before doing business
No
No
with a company?
62
Yes
Con Men: Inside Their Minds
+1
+1
10
I do certain things that are bad for me if they interest
Agree +1
me and are really fun.
Disagree
11
I often act without thinking through all the alternatives
Agree +1
because I’m too excited.
Disagree
12
I often act without thinking through all the alternatives
Agree +1
because I’m too excited.
Disagree
13
Please indicate the range that your ages falls under.
Under 18 19–30 31–49 50 or older
Don’t Fall In Their Trap
+1
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SCORING YOUR QUIZ Add all your answers with this symbol +1 together to see where you’re at in the vulnerability scale.
SCORE 12–17
6–11
0 –5
w Lo 64
. od M
H
i gh
RISK
Con Men: Inside Their Minds
FACTORS THAT MAKE US VULNERABLE Numerous studies have been conducted that compare the
During the course of numerous in-depth interviews with
behavior and demographic characteristics of known
victims of various frauds, this pattern of exposure to the
fraud victims with the behavior and demographic
marketplace was evident. Whether it was with financial
characteristics of the general public to see how victims
gain, getting a good deal, boredom, or just a hobby.
differ. While this research continues, there are several general conclusions that can be asserted about all victims, compared to the general public.
In looking at all victims of consumer fraud, there are essentially four primary risk factors that make one very vulnerable to fraud. Any one of these behaviors or risk
Multiple studies have shown that, compared to the general
factors, taken alone, may not result in victimization. But
public, more victims of fraud tend to put themselves in
the more that apply to you, the greater your risk.
sales situations. AARP’s National Victim Profiling study included interviews with 723 fraud victims and 1,509 individuals from the general public. The data from this study showed that compared to the general public, more victims sent away for free materials, entered drawings, got free lunch seminars, and read all mail, including any and all advertisements that came to them.
Don’t Fall In Their Trap
65
1 Interest in Persuasion
Several years ago, researchers analyzed hundreds of undercover fraud tapes made by law enforcement and found that across all scams, a series of identifiable persuasion tactics were common to most fraud schemes. The most common tactics were phantom riches (you’ll make a lot of money), source credibility (you can trust me), social consensus
(everyone is doing it), scarcity (hurry, time is running out), comparison (you’re getting a really good deal), and friendship (do this for me as your friend).
More recent studies have taken these same persuasion statements and asked victims
and the general public to describe their interest in them. Consistently, the victims of fraud showed more interest in persuasion statements used by con artists than the
general public, even after having been victimized. Researchers believe this interest makes investors and consumers highly vulnerable to fraud. This is why questions about
interest in persuasion are included in the vulnerability quiz and why persuasion is now a major piece of the Outsmarting Investment Fraud (OIF) curriculum being delivered around the country. This, of course, is great news.
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Con Men: Inside Their Minds
2
Lack of Prevention
The research has not only found that victims expose themselves to sales situations and
are more interested in persuasion statements used by con artists, but they also take
fewer affirmative steps to actively avoid being defrauded. Several studies have shown that victims are less likely to be signed up for the Do Not Call list that limits sales calls
and they are less likely to check references of a business before buying from that business. Don’t fall into their trap, make sure you do everything in your power.
Don’t Fall In Their Trap
67
3 Risk Taking
Researchers have found that willingness to take risks is correlated with victimization. Studies of investment-fraud victims in particular have shown that more known victims had previously invested in risky investment instruments like penny stocks and gold coins. Victims also report that they simply prefer taking greater risks to get greater returns than the general public does. This correlation makes sense given that any fraudulent offer to invest will have characteristics of higher-risk offers that may be legitimate offer higher returns, often not regulated by the government, an opportunity that requires a quick decision, and so on.
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Con Men: Inside Their Minds
4 Older Age
Studies showed the average fraud victim’s age to be between 54 and 69 years old.
Researchers will never be able to randomly select from among the total universe of victims, we will likely never know for sure if older people are victimized more than young people. But since 2004, the FINRA Investor Education Foundation and AARP have conducted extensive interviews with more than 1,700 fraud victims (chosen based
on the availability of lists, not age) and the vast majority of them were more than 50 years old, which tells us something about age as a vulnerability factor.
Don’t Fall In Their Trap
69
SPOTTING A CON ARTIST How To Spot A Con Artist Secrets, lies and tricks are tactics many con artists use to manipulate people to get what they want, oftentimes destroying their victim’s lives forever. Con artists gain a person’s confidence so they can have easy access to the victim’s money, trust and friendship. To avoid being fooled by a con artists look out for the following warning signs: Blending In Effective con artists must disguise their true motives. They try hard to look and talk like others in the community and quickly get to know a lot of people. Talking The Talk Con artists learn vocabulary so they can sound very knowledgeable in the subject they are talking about and sell you their lie. Dressing For Success Con artists want others to believe that they are regular folks, but they work hard to come across as smooth, professional and successful. Bringing Out The Worst In You Con artists will often expose your negative traits such as greed, fear and even insecurity. They know that big promises with no
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Con Men: Inside Their Minds
risk get people’s attention. They also try and make you
Cash Only Many (but not all) con artists don’t like to
feel very inadequate if you don’t believe what they are
be paid by check because it leaves a paper trail. The con
telling you, or are asking too many questions.
will tell you that the jackpot is just around the bend, but
Fair-Weather Friends At the beginning, cons are very friendly and take a personal interest in you. After they get what they want, con artists drastically lower their contact with you. Moving Frequently Even the best con artists can only play the part for so long before people become pretty suspicious of their behaviors and motives. To ensure that you never fall victim to the scam of a con artist, don’t trust a person too easily. Always investigate any who you just don’t have a good feeling about and the claims he/she is making before giving them your money or signing a contract. If you fear you may be dealing
Are you being asked not to tell anyone? If so, think about why they’re asking you to keep it a secret.
he or she is stringing you along while collecting more money from you (e.g. “Any day now...). Your own denial might allow procrastination to take over and have it take longer than common sense would allow, because you don’t want to face the possibility that you’ve been duped, betrayed, and taken advantage of. Procrastination & Intimidation When you start feeling impatient and you begin to question the con artist’s credibility, you may end up getting treated like a traitor, or even a fool. They might try to scare you so you’ll stick around until they can flee with the money (e.g. “you’re as guilty as I am in this”) .
with a con, stop speaking with the person and do not give him/ her any personal information. Once you’ve already entered into a transaction with someone, keep an eye out for these signs:
Don’t Fall In Their Trap
71
FIND YOUR WEAK POINTS These are the characteristics and situations that con artists most often exploit: Having a sense of charity, feeling lonely, and falling in love. You can be sure that if you’re around a cons and you are vulnerable, they will take advantage of you. The way to protect yourself from this is to know and recognize your vulnerable times. Cons will very likely take advantage of you whenever possible, but here are some examples of the types of scams they do: home improvement, opening bank accounts, investment franchises, postal fraud, and often during times when they see you vulnerable. Con artists target your bank by asking the victim (often an older widow) to test the honesty of employees by withdrawing substantial funds, which are given to the con artist for “examination”. The victim is given a fake receipt and the con artist disappears with the cash. In the case of investment franchises, vending machines, land frauds, theft of inventions, securities investments, they will be there as well. Another form of scam is postal fraud chain letters, magazine subscriptions, unordered items and correspondence courses. 72
Con Men: Inside Their Minds
There’s nothing wrong with checking their credentials. You’ll lose more if you don’t.
SCAMS
Others bait and switch, charity rackets, computer dating,
HOME IMPROVEMENTS
debt consolidation, contracts, dance lessons, freezer plans,
BANKING
psychic fraud, fortune tellers, health clubs, job placement, lonely hearts, medical quackery, missing heirs, referral
INVESTMENT
sales, talent scouts, pyramid schemes, fake officials.
POSTAL
Sociopaths use flattery and inflated credentials. They talk fast, pushing you for fast decisions Sooner or later, you will have a run-in with a sociopath. There are just too many of them — possibly between million and 12 million sociopaths in America. And they are definitely not necessarily locked up in jail. Sociopaths roam through all parts of society, all areas of the country, all walks of life. There is only one way to protect yourself from sociopaths : You must know what they are, and put your guard up when you start seeing the symptoms. Sociopaths are prolific con artists. Here are some typical con artist tricks. Lavish f lattery If you’ve met someone who is pretty overwhelming toward you with praise, attention and concern, be careful. Be particularly careful if you’re lonely and looking for love. Don’t Fall In Their Trap
73
HERE’S WHAT THEY DO Building Your Trust Con artists will sometimes
Intense Eye Contact Typically, when people talk to
honor their commitments in the beginning so that you
each other, they look each other in the eyes and then
begin to trust them. They’ll pay back initial loans, or
briefly look away. Sociopathic con artists often exhibit a
appear unselfish in helping other people. Their objective
“predatory stare”— unblinking, fixated and emotionless.
is to get you to drop your guard.
It’s not a sign of empathy — it’s an effort to assert control.
The Story Doesn’t Quite Add Up The con artist’s
Isolation Con artists will slowly and subtly separate
story may have small inconsistencies or unexplained loose
you from people who may question their plans. They
ends. If you ask questions, the con will glibly provide an
may intercept phone calls from your friends. They may
explanation — which may also not add up. They will also
refuse to associate with your family. They’ll tell you,
sidestep the issue by accusing you paranoia or mistrust.
“It’s you and me against the world, baby.” Soon, you’re
I Need An Answer Now A crisis needs to be averted, an opportunity will disappear — whatever the reason, a con artist will want an answer right away. If you have time to think, research or ask advice, you may realize that con artist’s plan is a ploy.
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Con Men: Inside Their Minds
alone with them, snared in their net.
con will want ‘‘The your money before you figure it out. ” Don’t Fall In Their Trap
75
Trust your instincts. If something looks too good to be true, it’s probably because it is. Don’t fall in their trap.
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Con Men: Inside Their Minds
INDEX
A age
65
author’s personal experience
11
bank
70
B Bernard Madoff blending in
68
bringing out the worst in you
68
charity
70
childhood causes
18
childhood trauma
18
childhood rearing
18
C
Calisto Tanzi Charles Ponzi credentials
71
depravity
16
detect
68
dress for success
68
D
Index
77
E
environment
19
exaggerated
71
F
fabricated
71
fair-weather friends
68
fantasy
9
flattery
71
Frank Abagnale
28, 30–31, 39
H
Hendy-Freegard
39
intimidation
69
investments
70
I
J
Joseph Weil
29, 34–35
James Arthur Hogue
39
Kevin Trudeau
39
K
78
Con Men: Inside Their Minds
L
loneliness
69
Lou Pearlman
39
M
Marc Dreier
39
Matt the Knife
39
maturity
18
mimicking behavior patterns
18
mistrust
72
money
72
moving frequently
68
P
paranoia
72
pathological liars
19
persuasion
64
postal frauds
70
prevention
65
procrastination
69
Index
79
Q
questions
58–63
R
red flags
68
Richard Allen Minsky
39
risk factors
68
risk-taking
65
S
80
Con Men: Inside Their Minds
Sante Kimes
39
scams
70
scoring
63
secrecy
68
self-entertainment
19
Sergio Crognotti
39
socialpaths
71
Steven Jay Russell
39
Steven Kunes
39
T
talking the talk
68
trust
72
type 1
28–29
type 2
42
vulnerability
63
weaknesses
68
V W
Index
81
Trust me, I’m a con.