The Confidence Game

by Maria Konnikova

  In the nineteenth century, we had the industrial revolution, and many present-day scam techniques developed in its wake. Today, we have the technological revolution. And this one, in some ways, is best suited to the con of all. With the Internet, everything is shifting at once, from the most basic things (how we meet people and make meaningful connections) to the diurnal rhythms of our lives (how we shop, how we eat, how we schedule meetings, make dates, plan vacations). Shy away from everything, you’re a technophobe or worse. (You met how? Online? And you’re . . . getting married?) Embrace it too openly, though, and the risks that used to come your way only in certain circumscribed situations—a walk down Canal Street past a three-card monte table, an “investment opportunity” from the man in your club, and so forth—are a constant presence anytime you open your iPad.

  That’s why no amount of technological sophistication or growing scientific knowledge or other markers we like to point to as signs of societal progress will—or can—make cons any less likely. The same schemes that were playing out in the big stores of the Wild West are now being run via your in-box; the same demands that were being made over the wire are hitting your cell phone. A text from a family member. A frantic call from the hospital. A Facebook message from a cousin who seems to have been stranded in a foreign country. When Catch Me If You Can hero Frank Abagnale, who, as a teen, conned his way through most any organization you can imagine, from airlines to hospitals, was recently asked if his escapades could happen in the modern world—a world of technology and seemingly ever-growing sophistication—he laughed. Far, far simpler now, he said. “What I did fifty years ago as a teenage boy is four thousand times easier to do today because of technology. Technology breeds crime. It always has, and always will.”

  Technology doesn’t make us more worldly or knowledgeable. It doesn’t protect us. It’s just a change of venue for the same old principles of confidence. What are you confident in? The con artist will find those things where your belief is unshakeable and will build on that foundation to subtly change the world around you. But you will be so confident in the starting point that you won’t even notice what’s happened.

  Since 2008, consumer fraud in the United States has gone up by more than 60 percent. Online scams have more than doubled. Back in 2007, they made up one fifth of all fraud cases; in 2011, they were 40 percent. In 2012 alone, the Internet Crime Complaint Center reported almost three hundred thousand complaints of online fraud. The total money lost: $525 million.

  For the total U.S. population, between 2011 and 2012—the last period surveyed by the Federal Trade Commission—a little over 10 percent of adults, or 25.6 million, had fallen victim to fraud. The total number of fraudulent incidents was even higher, topping 37.8 million. The majority of the cases, affecting just over 5 million adults, involved one scheme: fake weight-loss products. In second place, at 2.4 million adults: prize promotions. Coming in third, at 1.9 million: buyers’ clubs (those annoying offers you usually toss out with the recycling, where what seems like a free deal suddenly translates to endless unwanted, and far from free, charges for memberships you didn’t even know you signed up for), followed by unauthorized Internet billing (1.9 million) and work-at-home programs (1.8 million). About a third of the incidents were initiated online.

  Last year in the UK, an estimated 58 percent of households received fraudulent calls, seemingly from banks, police, computer companies, or other credible-sounding businesses. Some call recipients were wise to the scam. But somehow, close to £24 million was lost to the scammers—up from £7 million the year prior.

  Countless more cases go unreported—most cases, in fact, by some estimates. According to a recent study from the AARP, only 37 percent of victims older than fifty-five will admit to having fallen for a con; just over half of those under fifty-five do so. No one wants to admit to having been duped. Most con artists don’t ever come to trial: they simply aren’t brought to the authorities to begin with.

  No matter the medium or the guise, cons, at their core, are united by the same basic principles—principles that rest on the manipulation of belief. Cons go unreported—indeed, undetected—because none of us want to admit that our basic beliefs could be wrong. It matters little if we’re dealing with a Ponzi scheme or falsified data, fake quotes or misleading information, fraudulent art or doubtful health claims, a false version of history or a less than honest version of the future. At a fundamental, psychological level, it’s all about confidence—or, rather, the taking advantage of somebody else’s.

  This book is not a history of the con. Nor is it an exhaustive look at every con there ever was. It is, rather, an exploration of the psychological principles that underlie each and every game, from the most elementary to the most involved, step by step, from the moment the endeavor is conceived to the aftermath of its execution.

  The confidence game starts with basic human psychology. From the artist’s perspective, it’s a question of identifying the victim (the put-up): who is he, what does he want, and how can I play on that desire to achieve what I want? It requires the creation of empathy and rapport (the play): an emotional foundation must be laid before any scheme is proposed, any game set in motion. Only then does it move to logic and persuasion (the rope): the scheme (the tale), the evidence and the way it will work to your benefit (the convincer), the show of actual profits. And like a fly caught in a spider’s web, the more we struggle, the less able to extricate ourselves we become (the breakdown). By the time things begin to look dicey, we tend to be so invested, emotionally and often physically, that we do most of the persuasion ourselves. We may even choose to up our involvement ourselves, even as things turn south (the send), so that by the time we’re completely fleeced (the touch), we don’t quite know what hit us. The con artist may not even need to convince us to stay quiet (the blow-off and fix); we are more likely than not to do so ourselves. We are, after all, the best deceivers of our own minds. At each step of the game, con artists draw from a seemingly endless toolbox of ways to manipulate our belief. And as we become more committed, with every step we give them more psychological material to work with.

  Everyone has heard the saying “If it seems too good to be true, it probably is.” Or its close relative “There’s no such thing as a free lunch.” But when it comes to our own selves, we tend to latch on to that “probably.” If it seems too good to be true, it is—unless it’s happening to me. We deserve our good fortune. I deserve the big art break; I’ve worked in galleries all my life and I had this coming. I deserve true love; I’ve been in bad relationships long enough. I deserve good returns on my money, at long last; I’ve gotten quite the experience over the years. The mentalities of “too good to be true” and “I deserve” are, unfortunately, at odds, but we remain blind to the tension when it comes to our own actions and decisions. When we see other people talking about their unbelievable deal or crazy good fortune, we realize at once that they’ve been taken for a sucker. But when it happens to us, well, I am just lucky and deserving of a good turn.

  We get, too, a unique satisfaction from thinking ourselves invulnerable. Who doesn’t enjoy the illicit glimpse into the life of the underworld—and the satisfaction of knowing that clever old you would be smarter than all that, that you can laugh at the poor sap who fell for something so obvious and still be safe in the knowledge that you are keener, savvier, more cynical and skeptical? They may fall for it. You? Never.

  And yet, when it comes to the con, everyone is a potential victim. Despite our deep certainty in our own immunity—or, rather, because of it—we all fall for it. That’s the genius of the great confidence artists: they are, truly, artists—able to affect even the most discerning connoisseurs with their persuasive charm. A theoretical-particle physicist or the CEO of a major Hollywood studio is no more exempt than an eighty-year-old Florida retiree who guilelessly signs away his retirement savings for a not-to-miss investment that never materializes. A savvy Wall Street investor is just as likely to fall for a con as
a market neophyte, a prosecutor who questions motives for a living as likely to succumb as your gullible next-door neighbor who thinks The Onion prints real news.

  So how do they do it? What makes us believe—and how do people take advantage of that process for their own ends? At some point, everyone will be deceived. Everyone will fall victim to a confidence artist of one stripe or another. Everyone will fall for it. The real question is why. And can you ever understand your own mind well enough that you learn to extricate yourself before it’s too late?

  CHAPTER 1

  THE GRIFTER AND THE MARK

  He does not answer questions, or gives evasive answers; he speaks nonsense, rubs the great toe along the ground, and shivers; his face is discolored; he rubs the roots of his hair with his fingers.

  —PROFILE OF A LIAR, 900 BCE

  Whenever people ask me if I’ve ever been conned, I tell them the truth: I have no idea. I’ve never given money to a Ponzi scheme or gotten tripped up on an unwinnable game of three-card monte—that much I know. And there have been some smaller deceptions I’ve certainly fallen for—though whether they qualify as full-fledged cons is a matter of dispute. But here’s the thing about cons: the best of them are never discovered. We don’t ever realize we’ve fallen; we simply write our loss off as a matter of bad luck.

  Magicians often resist showing the same trick twice. Once the element of surprise is gone, the audience becomes free to pay attention to everything else—and is thus much more likely to discern the ruse. But the best tricks can be repeated ad infinitum. They are so well honed that there is practically no deception to spot. Harry Houdini, the magician and famed exposer of frauds, boasted that he could figure out any trick once he’d thrice seen it. One evening at Chicago’s Great Northern Hotel, the story goes, a fellow conjurer, Dai Vernon, approached him with a card trick. Vernon removed a card from the top of the deck and asked Houdini to initial it—an “H.H.” in the corner. The card was then placed in the middle of the deck. Vernon snapped his fingers. It was a miracle. The top card in the deck was now Houdini’s. It was, as the name of the routine suggests, an “ambitious card.” No matter where you put it, it rose to the top. Seven times Vernon demonstrated, and seven times Houdini was stumped. The truly clever trick needs no hiding. (In this case, it was a sleight-of-hand effect that is often performed by skilled magicians today but was, back then, a novelty.)

  When it comes to cons, the exact same principle holds. The best confidence games remain below the radar. They are never prosecuted because they are never detected. Or, as in Demara’s case, they are detected, but the embarrassment is too great. I wouldn’t be surprised if Houdini had kept quiet about his inability to spot Vernon’s trick, had the two men met in a less public setting. It’s not uncommon, in fact, for the same person to fall for the exact same con multiple times. James Franklin Norfleet, a Texas rancher you’ll meet again later on, lost first $20,000, and then, in short order, $25,000, to the exact same racket and the exact same gang. He’d never realized the first go-around was a scam. David Maurer describes one victim who, several years after falling for a well-known wire con—the grifter pretends to have a way of getting race results seconds before they are announced, allowing the mark to place a sure-win bet—spotted his deceivers on the street. He ran toward them. Their hearts sank. Surely, he was going to turn them in. Not at all. He was wondering if he could once more play that game he’d lost at way back when. He was certain that, this time, his luck had turned. The men were only too happy to comply.

  Even someone like Bernie Madoff went undetected for at least twenty years. He was seventy when his scheme crumbled. What if he’d died before it blew up? One can imagine a future where his victims would be none the wiser—as long as new investments kept coming in.

  In June 2007, Slate writer Justin Peters decided to be creative about his airfare to Italy. Short on money, he was nevertheless eager to spend a few months out of the country. And he had what he considered a pretty damn brilliant plan for solving the dilemma. He’d buy airline miles from someone willing to part with them, and then use them to purchase a reduced fare. He promptly started scouring the Internet for anyone with a mile surplus. He was lucky. Soon after he began his search, he found Captain Chris Hansen, a pilot with countless unused miles he’d put up for purchase on Craigslist. Peters quickly replied to his posting—god forbid the miles went to someone else. They talked on the phone. Captain Chris seemed knowledgeable and friendly. “Our conversation convinced me that he was on the level,” Peters writes. A deal was promptly arranged: $650. A hundred thousand miles. PayPal. Simple.

  Except PayPal rejected the transaction. How odd, Peters thought. He followed up with the captain about the error. The pilot was strangely silent.

  Peters, however, was desperate. His scheduled departure date loomed ever closer, and still no tickets. So he returned to the hunt. Bingo. Franco Borga, ready seller of miles. Borga responded promptly and, of all things, included his driver’s license in the reply. He was who he said he was, not some Craigslist scammer. A phone call later—a “very nice conversation”—and they were in business. Seven hundred dollars on a Green Dot card, and the miles would be his. (Green Dot cards, a favorite of the con artist, are gift cards that you can easily buy at any supermarket or drugstore. You can recharge them, and anyone with the account number can access the balance—a way to move funds without the hassle of a wire transfer.)

  Four days later, still no miles. It was finally dawning on Peters that he might have been scammed. But then, lo and behold, his long-lost pilot resurfaced. He’d been abroad, he explained, with limited e-mail access. But he still had the miles for Peters’s use. Victory. Of course Peters still wanted them—especially, he told the captain, after he’d been so callously scammed. Captain Chris sympathized completely. The Internet was a predatory place. To put Peters’s mind at ease, the captain then sent him a contract; he was, as Peters had always known, on the level.

  PayPal still on the fritz, Peters quickly wired the promised $650.

  By this point, everyone but Peters can see how the story will end. Three days, no miles. Four, five, six days. No miles, no e-mails. He had fallen for the exact same scam twice in one week. In this case, he had clear proof of the deception: no miles. But imagine a situation where chance plays a bigger role. A stock market. A race. An investment. Who’s to say it wasn’t just bad luck?

  P. T. Barnum may never have said, “There’s a sucker born every minute.” (He very likely did not.) But among the con men of the early twentieth century, there was another saying. “There’s a sucker born every minute, and one to trim ’em and one to knock ’em.” There’s always something to fall for, and always someone to do the falling.

  Who is the victim and who, the con man? What kinds of people are the Bernie Madoffs and Captain Hansens of the world? And do a Norfleet and a Peters share some underlying traits that bind them together? Is there a quintessential grifter—and a quintessential mark?

  * * *

  Eighteen State Street. A small, two-window-wide cream house. Teal-and-white trimmed shutters. Grass sprouting in between slabs of surrounding concrete. A small teal-and-cream garage, a basketball hoop affixed to the top. This is where the Great Impostor once made his home. Although he would do his best to have you forget it.

  Ferdinand Waldo Demara, Jr.—our old Korean naval surgeon friend, Dr. Cyr—was born on December 12, 1921, in Lawrence, Massachusetts, the first son and second child of a prosperous local family. His mother, Mary McNelly, was an Irish girl from Salem, Massachusetts, a product of the strictest of Catholic upbringings. His father, Ferdinand Senior, was French Canadian, the first generation to have made it south of the border. He’d come in search of wealth, and, by the time young Fred was born, had found some semblance of it, from the movie business. He’d started as a simple projectionist in Providence, Rhode Island, but over the years he’d saved enough that he dreamed of owning his own theater. In Lawrence, he’d met a local backer, and before long,
the Toomey-Demara Amusement Company was running its first cinema: The Palace. It was a success, and Fred Senior seemed born to it. He was, Demara’s mother later recalled, “one of the few men who could carry a cane and sport spats and not look foolish doing it.”

  Fred wasn’t born in that modest State Street house. No, sir. He was a product of the fashionable Jackson Street. Where his classmates at the Emily G. Wetherbee School were mostly the sons of mill workers, he stood out. He was a class above. And a head above, too; even then, Fred was a giant.

  Fred wasn’t particularly popular, what with his constant better-than-thou-ness. But nor was he particularly disliked. That is, until another boy thought that he’d ratted him out to the teacher. “We’re going to get you at lunch,” he and a newly formed posse promised. Fred promptly went home at recess. But before lunch, he returned. When the boys surrounded him, he pulled out a dueling pistol. “I’m going to shoot your guts out,” he threatened. Two more guns were found in his bag, and Fred was suspended.

  His behavior soon grew so out of control that he was placed in a Catholic school, St. Augustine’s. And it was there that he swapped flat-out violence for a slier sort of approach.

  St. Augustine’s had a Valentine’s Day tradition. Each eighth grader would give a seventh-grade boy a small gift. It was a simple ceremonial exchange to symbolize a “turning over” of the class to the rising eighth graders. By the time Fred was in eighth grade, though, the family’s fortunes had taken a sharp downward turn. Shortly after his eleventh birthday, the Toomey-Demara Amusement Company went bankrupt. Good-bye, Jackson Street. In its stead, an old carriage house on the outskirts of town. State Street.

  Demara desperately didn’t want to be poor. “Please, Little Jesus and Mother Mary,” he would pray. “Please don’t make us poor. If you don’t I’ll say a rosary every night of my life.” His prayer went unanswered.