Part two: the incentive. The incentive is the reason that the victim would want to place himself in the hands of the fraud artist. In the classic swindle, the incentive is a get-rich-quick scheme, but it can be p. 221 some other sort of benefit, such as a sexual experience (as in the Murphy game or the badger game). Sometimes it’s a good feeling that comes from helping others, as when making a gift to charity. But of course in this case, the charity is fake. The only person who benefits is the grifter.
Part three: the shill. Most swindles employ a shill, a third person, sometimes unwitting but more often part of the scheme, who acts as a disinterested party, reinforcing the victim’s participation. The shill is the fake buyer at an auction, serving to bid up the prices. He is the guy who shows how easy it is to win the shell game or three-card monte. The shill is there to ease the mark into the fraud by showing how easy it is to win.
Part four: the switch. Always in the swindle, there is a switch in which a fake thing is substituted for the article of value such that the victim gets real emeralds that were the bottom of a Heineken bottle last night. Or the victim gets a two-thousand-year-old genuine antique Roman coin made yesterday. In the sex frauds, the paid-for object of desire often just doesn’t make the scene. Sometimes, as in the badger game, the paid-for object of desire does make the scene, causing worse trouble than the mark ever imagined. She might make it into bed with the mark, but she doesn’t make it. She doesn’t make it because her “husband” (a shill) or a “detective” (also a shill) barges into the room just at that crucial moment. The “detective” or the “husband” wants to be paid off or he’ll make a stink.
Sometimes the switch is crude, such as substituting a lead brick for a gold brick, a deception that in the 1970s fooled several hundred senior citizens in New York City. More recently, the EDS corporation in Florida fooled hundreds of seniors who paid for not only gold that wasn’t there but also storage fees for the same (nonexistent) gold that wasn’t stored. EDS routinely sent pictures of gold bricks to the seniors who invested in the gold. What those seniors really paid for was pictures of gold-painted bricks and a nicely engraved (phony) certificate.
In other cases, there is no physical switch involved but an intangible one as in bait-and-switch advertisements where (aw, shucks!) that really cheap Sony sixty-four-inch TV we advertised yesterday was sold out just an hour ago.
Part five: the pressure. Just before or after the switch, there is pressure to hurry the victim along and impede him from carefully considering the transaction. Often, there is a time limit imposed, either by stating the deal is now or never because the offer is about to expire, or the deal may be lost because there is another buyer waiting, possibly with a p. 222 better offer. This pressure—to do something right now, fast, and often without serious consideration—is so characteristic of those who engage in con games that it is called the hustle; those who do the hustle, those who are so skilled at applying the pressure, are called hustlers.
Part six: the block. Last but not least is the block, a tactic aimed at stopping the victim from reporting the incident to the police. The block is an essential and carefully planned part of the deception. There are two main types of block: the legal block and the time block.
Legal block. Often the victim can’t report to the police because to do so would be to confess wrongdoing as in a smuggling, counterfeiting, or gambling scheme (where gambling is illegal). If the activity is not outright illegal, the block can be shame. Sex schemes play on that shameful angle. How would you like to tell the police or your mother—or worse, read in the paper—that you paid some pimp for the services of a prostitute and then got rolled when you when up to her room?
Time block. Sometimes the block is time. Sometimes time is infinite because the victim never figures out that those diamonds that he bought at bargain prices are actually fake—he never has the fake diamonds appraised. This is because he doesn’t want to risk having the supposedly stolen diamonds identified. Sometimes the time block is limited—the victim can’t cash in those phony uranium stocks for a specified period of time because there is a “lock up” agreement. Usually, the time block is so arranged so that the con men can skip town.
Remember, most scams succeed because of the desire of the victim to believe that which satisfies his or her ambition, prejudice, or eagerness for gain. There is nothing new under the hoaxing sun, all schemes being but new wrinkles of age-old cons and all consisting of the six classic parts. Thus, the pedigreed dog swindle, which works so well and so often on gullible bartenders, is, in essence, no different from the stock swindle called pump and dump, where worthless securities are peddled to greedy people who think they will soon sell the same to someone else at a higher price.
Scams, swindles, and frauds come in so many shapes, sizes, flavors, and colors that no book can cover them all. The best we can do in this short space is to recognize the pattern of deception by identifying the six classic parts of fraud. As you read through the following descriptions of some of the classic scams, do an analysis of each scam to see if you can identify the six classic components mentioned above. Remember the six parts of sham by using the mnemonic CISS (come-on, incentive, p. 223 shill, switch), followed by P&B (pressure and block). Or ciss, pressure, block. Or CISSPB.
I was doing some medical consulting for a Houston attorney who told me about a great deal that he had just engineered. I can’t mention his real name, so let’s call him Roger. What do you think of Roger’s great deal?
Roger: I had a guy come in here and ask if I was an international lawyer.
Me: You don’t know jack about international law.
Roger: I know. But I told him yes.
Me: Roger, that’s a lie.
Roger: He needed someone as a go-between to work with someone in Colombia to get permission from the government of Colombia to raise a treasure ship that has been located five miles off the northwestern coast of Colombia. The deal’s all set, and the Colombian official has already received the bribe. The ship is known to be holding $86 million worth of gold pieces of eight.
Me: Oh no! You didn’t pay anything. Did you?
Roger: It was difficult, but I finally persuaded the client and his business partner to cut me in on the deal. The partner was a real son of a bitch. He didn’t want me in on it at all. He said they didn’t need me. But I told them if they didn’t let me in, I was going to blow the whistle on them and report them to the Colombian government and to the FBI. That convinced them! They had to let me in. They let me in for an 8 percent interest for only $400,000. They needed it in cash.
Me: Cash?
Roger: Yeah, that was the bribe. It had to be in cash.
Me: And now you don’t know where they are.
Roger: How did you know? In fact, I haven’t seen them since I handed over the cash.
Me: Don’t worry, Roger. I know where they are.
Roger: You do! Thank God! That’s great. Where?
Me: They are . . . somewhere. Somewhere out there, spending your dough. You have been taken by the hidden treasure scam, a slightly sophisticated version of the pedigreed dog scam.
Roger: Nope! That’s impossible. It’s not a scam. I have the map. They left the map with me as security. See.
p. 224 At that point, Roger produced a hand-drawn map of the coast of Colombia. Sure enough, at a point about five miles off the northwestern coast of Colombia, a big red Maltese cross that marked the spot where the supposed treasure was.
Analysis: Treasure hunt scams are as old as the hills. As mentioned, they are like the pedigreed dog scam. In treasure hunt, the come-on is the usual. Someone approaches with a deal that, though a little shady, is interesting and superficially plausible. The incentive is the usual—get rich quick. The shill in the pedigree dog is the potential buyer. The shill in the treasure hunt is the reluctant partner who tries like the devil to prevent Roger from being cut into the profits. The switch is that nothing of value is actually involved. The mutt in PDS is worth five dol
lars. The treasure map with the big red Maltese cross is worth three dollars. The pressure is to make the deal before someone else gets the chance. The block is the wait and the shame about being fooled plus the shame of trying to do something dishonest. Roger eventually admitted that he had been taken. He didn’t tell the police. He was afraid that if he told the police, the word might leak out, and he would catch hell from the person in life whom he feared the most—his wife.
Alchemists used to show the great leaders of medieval Europe how easily they could turn lead into gold. The alchemists did this trick by stirring the molten lead with a hollow iron rod that had a piece of gold held in its hollow bottom with wax. When the rod was dipped in the molten lead, the wax melted, and the gold, being lighter than lead, appeared floating on the top of the mixture. Princes, dukes, and kings supported these alchemist charlatans for decades in the hope that their process of turning lead into gold would make them rich. It never did.
Another form of salting involved the sale of worthless mine property to gullible greenhorns eager to make it big. Before showing the property, gold flakes would be sprinkled around the entrance. When samples were taken by the prospective buyer (now the mark), sure enough, the gold was there. Sure enough, that gold when taken to the assay office proved real.
Chinese immigrants fell for the scam so frequently that the word went out to watch out for gold seeding and to take samples at random from a part of the stake selected, not by the seller, but by the buyer. This perfectly reasonable attempt to get around partial selection of evidence led to the marvelous counterinvention of the dead snake trick.
A snake was killed and kept in the pocket of one of the shills. When p. 225 the would-be buyer selected an area in the back of the cave, the snake was thrown down in the area and immediately shot at twice by one of the shills in attendance. Since the lead shot in the shotgun shells had been replaced with gold flakes, the area around the dead snake did in fact now yield a large amount of gold, much of it tightly imbedded in the soil the way real gold should be.
Analysis: The come-on is the seller of the worked-out mine. He is usually an older prospector who wants to retire and who thinks it is his retirement right to sell a worthless claim to the gullible. The incentive is the usual, the dream of easy gold. The shill is the seller and his assistant, who are in on the scheme. The switch is the seeding of the selected area by the brilliant technique of the dead snake trick. The pressure is that others are in the wings who are eager to buy the property. The block is that the sellers will be in San Francisco by the time most of the dirt in the claim is sifted and found lacking.
Murphy Game Scam
Murphy approaches a visitor from out of town and suggests that he can get him a woman for the night. Posing as the pimp, Murphy quotes a price to the victim for the sex act that the victim specifies. Murphy then asks for payment in advance because if the victim were to pay the woman directly, there might be trouble with the law, since payment for sex is considered part of the crime of prostitution. The victim pays Murphy, who then leads the mark to a hotel. Murphy asks the victim to wait in the lobby, so that Murphy can go upstairs, conclude the deal with the woman and make sure that the coast is clear of cops. Murphy then goes up the elevator and leaves the hotel by another exit. The victim, like those characters in the 1942 classic movie Casablanca, waits and waits and waits.
A variation: Murphy may, to assure the victim, tell the victim a room number and instruct the victim to come up after a specified amount of time, say, ten minutes. Of course, there is no woman. Often there is no room either. Or if there is a room, no one is in. Or if someone is in, it’s an elderly couple who don’t know anything about what’s up.
Analysis: The come-on is by Murphy, who is usually on the lookout for businessmen at a convention who are looking for some nooky while away from home. The incentive is forbidden sex. In this game, the shill is also Murphy, who pretends that he is a pimp when actually he is just a p. 226 con artist acting like a pimp. The switch is that a woman was promised, but she doesn’t exist. The pressure is—well, you can imagine what the pressure is. This babe is so hot and so sexy and so good at what she does, she will soon be booked and unable to give her services. The block is the wait in the lobby so that Murphy can make his escape. But the block is also shame. The victim is unlikely to complain to the police because to do so would be to confess his shameful involvement in prostitution.
In a sense, the victim of the Murphy game is lucky that the woman is not there because if she were, then the victim might become involved in the badger game, a much more serious form of trouble.
Badger has the same plot structure as the Murphy game except the woman is there in the room as scheduled. She might actually get into bed. But she doesn’t do it, no sir. She doesn’t do it because the game is interrupted at that crucial moment by the entry of “detectives,” the “police,” or an irate “husband” who demand payment to keep things quiet. On the darker side, sometimes the game is a blackmail scheme wherein pictures of the victim in flagrante delicto are to be sent to the victim’s wife unless he pays and pays and pays.
A variation that is played if a customer seems prosperous is to use young girls from age nine to fourteen as bait. Instead of an angry husband storming into the room, it would be the girl’s “parents.” The “mother” would scream at the child and punch her in the face; her blows usually hard enough to cause bleeding from the mouth and nose. The act is convincing and leaves the victim stunned. The alleged “father” would shove his fist menacingly at the victim’s face and snarl, “I’m going to put you in prison for a hundred years!” Men so threatened often pay thousands of dollars in hush money. Incidentally, the child’s bloody nose and mouth come from the plastic bag of chicken blood that she bites when she is hit.
Shell Game and Three-Card Monte
The shell game and the three-card monte are the most common street swindles today. Because some members of the public have (finally) figured out that monte is a gyp because the marked card is switched before the victim gets to play, the shell game is making a comeback. The shell game has a long history, going back to the second century CE in Egypt, where it was called cups and balls. Here’s how it works:
p. 227 Some young men set up a table on the street and start playing with three shells. One or more of the men is a shill (a fake bettor on the side) and the other con man is the dealer. The dealer is also known as “thimble rigger” because as a skilled operator, he can hide the pea anytime he wants. The dealer lets the shills win right and left so that the game looks easy as pie. The victim, attracted to the idea of easy gain, wants to play, too. But as soon as he starts playing, he loses. In fact, he soon finds out that he can’t win for love or money because it is rather hard to pick the shell with the pea under it when the elusive pea is under none of them. The basic rule is never to let the victim win, since he might pick up his winnings and leave. So the pea has been removed from the shell it was under. The pea is actually in the palm of the dealer.
Here’s the best way to play the shell game.
Lose three times in a row with small bets. Then after the shells have been moved around for the fourth time and all the shells are resting quietly on the table, propose a giant bet. Put up the cash for that bet on the table. When the dealer matches the bet (often assisted by the shills who want to get in on the action, especially since they know this is a sure thing), pull out your gun and place it and your right hand on the table, too. Announce that this time you will not pick up the shell with the pea but that you will pick up the two shells that don’t have the pea. Turn over two shells with your left hand (while continuing to hold the gun in your right hand)—no pea. While picking up the money with your left hand, announce, “I reckon there’s no need to turn over that last shell. For I’m sure you boys have been honest as hell.” Back away while keeping everyone covered. Do not turn your back to the group until you are sure you are safe.
But you may ask, “What should I do if I don’t hav
e a gun?” And I reply, “If you don’t have a gun, get a gun. Better yet, don’t play the shell game at all.”
Chain Letter Scams
The chain letter urges the reader to send a dollar or some other sum to the name at the top of the list, then retype the letter, deleting the top name and adding the reader’s own name at the bottom. The letter promises riches to the people who follow the plan. The chain soon snowballs to a fantastic number of people, but only the originators of p. 228 the chain letter stand a decent chance of making any big money. The principle of the chain letter is that of the pyramid, with a small top and a large bottom. All money flows toward the top, and the people on the bottom are the payers, not the collectors.
Many other frauds are based on the principle of the pyramid, including referral sales in which someone gets a water softener (or whatnot) free if he steers enough of his friends to the salesman. Another variation is the major effort to build up a network of “dealers” (in dishes, candles, emus, etc.) rather than selling the goods to the public. As in all pyramid schemes, the bubble eventually bursts because there are only a certain number of people, and the scheme, which depends on continued growth, collapses when the limit is reached.
Charles Ponzi, swindler, used a classical pyramid scheme. Ponzi got so famous that his name has entered the English language. Any scheme in which the original investors are paid off with money supplied by a succeeding army of suckers is now known as a Ponzi scheme.
In the beginning, Ponzi discovered that he could purchase international postal-union reply coupons at depressed prices in some foreign countries and sell them in the United States at a tidy profit of up to 50 percent. That was nice, but it was strictly small time. Ponzi wanted something bigger. He came up with telling people that if they invested their money with him, he would return a profit of 50 percent to them in three months. Later, he cut the waiting time to forty-five days. As soon as he started paying out, at least forty thousand people threw money at him. In one day in 1920, Ponzi took in over $2 million from the country’s newest gamblers, the little folk who squeezed money out of small bank accounts, mattresses, piggy banks, cookie jars, paper routes, and hot dog stands.
Truth, Knowledge, or Just Plain Bull: How to tell the difference Page 27
