Investment scams - financial scams - Ponzi schemes
HOW CON ARTISTS SET UP THEIR VICTIMS
Continued from previous page
Reeling you in
1. Locating you, the victim 2. Gaining your confidence 3. Steering you to the insideman 4. Permitting the inside man to show you how you can make a large amount of money 5. Allowing you to make a substantial profit
Let's take a closer look at those steps -
Potential victims can be found in all sorts of places - country clubs, small airports where private planes are parked, cocktail parties, cruise ships, on the Internet, anywhere the con will find people who have extra money to spend and like the good life.
On the other hand, sometimes a con will merely play the game on someone who may not have a lot of money himself but who has relationships with others who do. As a middleman, you have been targeted to be the fall guy and you will not be aware that you have been duped until everything falls apart and you are left alone to bear the full weight of the repercussions.
The first part of this step is to establish an affinity with you by mirroring your interests and beliefs.
Once you feel you have found a kindred spirit, the con artist will dangle the bait - "There's money to be made ... you are just the kind of person I've been looking for ... I need your help ... only someone as honest as you can be of service ..."
In most instances, the middleman stars in the first two scenes. Once you have been carefully manipulated into a state of confidence and excitement, the middleman introduces you to the inside man.
But first, you have to "earn the middleman's trust" by proving that you are a worthy candidate for an introduction to higher financial powers.
To prove yourself, you are asked to sign any number of documents such as a LETTER OF INTENT, PROOF OF FUNDS, NON-CIRCUMVENTION NON-DISCLOSURE AGREEMENTS (NCND's), POWER OF ATTORNEY, etc., all of which are actual documents used in legitimate business. In an investment scam, the wording of these documents is usually full of holes, grammatical errors, and typos, plus any legal document created to further a criminal activity is automatically null and void.
In other cases, the documents may be made up out of thin air, like the ones Nigerian, Former Soviet Union (FSU), and Asian scammers use.
These include certificates that require a signature stating that funds will not be used for terrorist purposes or that the funds are not of criminal origin, and letters from so-called bankers or attorneys requiring the target to countersign acknowledgment that they are someone's heir, or confirming that funds will be transferred to such and such account, and claims forms for lottery winnings.
This is where things can get a little tricky.
You see, falling for a scam has nothing to do with the amount of education one has. It depends only on prior experience plus the scope of prior exposure to the world of fraud. One person falling victim to multiple scams, sometimes in an effort to recover lost funds, is quite common.
For instance, no scammer will waste his or her time trying to pull a counterfeit Rolex scam on a jeweler, or try to sell him on a fake diamond deal, either, though it has been known to happen. More likely, the jeweler will be targeted for a real estate scam or other area far from the target's area of expertise.
The fact that a person has been scammed or is familiar with one category of scam does not mean that person won't be be swindled yet again by the same scam offered with a shade of difference or one that is entirely new to them.
Con artists are adept at presenting the very same deal as being The Real One and at targeting recent victims who are desperate to make up for lost funds.
This is their typical line: "I'm so sorry you were scammed. Yes, there are a lot of bad people around and you have to be careful, but I'm the real thing and here is why ..."
Basic elements of a scam
There are two basic elements required to create a scam: (1) That the deal be too good to pass up; and (2) that it involve a situation about which, in reality, the has target has little or no knowledge even if he thinks he does.
A con artist knows how to read you, your wants, your desires, and what makes you tick. He or she will talk to you in words you understand on a very basic level because he is not only talking to your conscious mind, he is speaking to your inner voices.
Whatever the deal is, it will fit exactly into your personal needs on a scale that will save you a tremendous amount of money, like a contractor scam, or will provide you with a tremendous amount of money, like an investment scam or lottery scam, or will answer your prayers for extra income, like a work-at-home scam or other employment scam.
And because of this, you will listen to whatever the scammer has to tell you until you glow with the vision of an easier future.
For the scammer, this is the easy part. Once you have turned your money over to the scammer, he only needs to hand you back a portion of your money - or a piece of some other victim's money - after a certain period has elapsed, telling you that you have now received your first profits.
The scammer knows very well that a victim's knee-jerk reaction to receiving the fast, high-dollar return on a scam is to follow whatever instructions the scammer hands out next; and if it's an investment scam, it will be to tell your friends and relatives about your good fortune, drawing more victims into the trap.
You are now officially a fraud victim.