Silence is fraud's best friend.  Word of mouth is fraud's worst enemy.  Pass the word!TM

 

Home

In the News
About Fraud Aid Scam Solution Center Menu

Volunteers

Report Email Fraud Search Contact Us

 

 

 

SFGate

The online home of the San Francisco Chronicle

 

Annie's Scam
Hard lessons learned from the world of fraud

by Lisa Margonelli, special to SF Gate

Wednesday, February 5, 2003

Annie McGuire spends a lot of time inside her Long Beach apartment, answering e-mails from people who think they may have been conned. Annie's anti-scam Web site, FraudAid.com, is the main thing in her life -- along with a screeching cockatiel, a bunny and her husband, who's had several strokes. "This is my calling," she says of the letters she gets from people who've fallen for those sweetheart deals, Nigerian-letter schemes and improbably high-yield investments. Another person might call these people fools, but not Annie. "I make no judgments," she says.

Annie, who is in her 50s, has a honeyed voice and a razor-sharp instinct for the right word. You quickly get the feeling that she's always a been a bit smarter than the other people in the room -- more well read, more adept at puzzles and problems, faster off the mark. Her photograph shows an attractive, conservatively dressed woman whose mouth is pursed just slightly, as though she's carefully examining a grocery receipt for errors. Nobody's fool.

Except that she was. Annie's intimate knowledge of fraud and con games came at a high price. Seven years ago, she fell victim to a con artist who she says tricked her into becoming an unsuspecting middleman, fleecing her contacts out of nearly a million dollars. She fell into a complicated scheme where investors put up money with the expectation that it will yield extremely high returns within six weeks. It was, of course, too good to be true, and she says the FBI has devoted years to investigating the case.

In movies, con men (and women) are romantic figures. They're Paul Newman and Robert Redford in "The Sting" or Leonardo DiCaprio in "Catch Me if You Can." In real life, they're less good looking and a lot more common than you'd think -- one study found that one-third of American families had a member who was the victim of a white-collar crime. Far rarer are the people who admit to being victims, however: The same study revealed that only 7 percent of con victims report the crime to authorities.

Bunco crimes rise during bad economic times, says Greg Ovanessian, a fraud inspector with the San Francisco Police Department. Recently, a pair of con artists fleeced eight elderly people out of more than $100,000 in a month before skipping town. Elderly victims often lose more than just the money -- many of the victims Ovanessian sees ask him not to tell their children about their foolishness. "They're embarrassed," he says. "They're worried their kids will try to put them in a nursing home." Con artists are good at playing on the weaknesses of the gullible and the good hearted, but it's the greedy person within each of us that they can make their fortunes from.

Until recently, Annie didn't know what it was like to need money. She grew up well off. As an adult, she ran a printing business and then an advertising company, and her husband was a pilot. But she always had a cushion of family money to fall back on. When she was in her late 40s, the McGuires decided to retire with a nice nest egg in a conservative retirement fund. They were not wealthy, but they were comfortable. "But it wasn't enough," Annie says. "My husband was a Depression baby. He had a major want list: cars, a plane, a yacht. Horses! It was completely out of the question."

Annie wasn't into the toys she could buy with money; what she loved was the game of getting money. "Gaining money itself wasn't for me," she says. "Power was my big thing. People mattered to me." After she retired, she had plenty of time on her hands, so Annie set about trying to make money, and connections, by trading various commodities -- cigarettes, sugar, crude oil, frozen chicken, scrapped tankers -- in a sort of underground network of middlemen. Annie loved being the middlewoman, the center of attention, the fixer, the connection, the sun around which these constellations of deals orbited.

None of her deals made money -- most of them fell through -- but at least they were legal. Annie ran up phone bills as high as $1,500 a month in the process. And, in one very bad deal, she lost her $100,000 nest egg. Annie was devastated, but she figured she'd make up all the money she'd lost on the next deal, when she got an in on something she could really profit from.

Then along came a man known as "the Trader." Annie says the Trader told her he was a member of an international trust that made short-term, high-yield loans. At first, Annie worked hard to impress the Trader. She had grown up reading adventure stories and loved the intrigue, the foreign connections. Within days she had succeeded in delighting him with her intelligence, her business savvy and her well-heeled connections.

The trader quickly initiated her into the "secret, high-powered" world of international finance and later gave her limited power of attorney over his accounts. He put her in touch with people who seemed to work for important foreign banks. "I was tired of years of disappointing trades," Annie says. "I was

frantic because I'd lost so much money." For an outgoing person, the strain of keeping the deals a secret, of holding so much responsibility, became isolating. She felt alone and increasingly terrified. She says the Trader looked like a white knight come to save her.

Looking back now, Annie says it was obvious she was dealing with a crook. But the crook, like any professional con artist, set about knowing Annie well. He got her to talk more about herself than he spoke of his own life. "They mirror your passions and dislikes," she said. "They build up the mark's profile and, at the same time, they keep you off balance." It was as though the Trader was standing in front of Annie, cutting a key to fit into her lock, his approach was so perfectly honed to her inner desires. That is, after all, why they're called confidence men.

Annie saw the Trader's scheme as a way to help other people, to get the kind of beneficent power she dreamed of, while helping her husband buy the horses or the plane. Worse, she decided to help other people make money, too. "I saw myself as some kind of hero," she says. "They were going to benefit from my deal." She thought she was turning her contacts on to financial security, and even luxury, for life, so she got them to give her huge amounts of money -- a total of a million dollars. From the Trader, she received notice of commissions, which she thought would replace her nest egg. She gave her investors receipts, and she got receipts from bank accounts in the Bahamas. The Trader said the money would turn around in six weeks.

It didn't, of course. There were excuses -- and then the Trader began to threaten Annie when she complained. He showed her an ID card that identified him as an employee of the CIA. "Once you're in, you can't afford not to continue," Annie says. "You would have to admit too many things." In their last phone call, she says, the Trader told her a foreign government might jail the investors, and he himself was sick from the stress. After that, she couldn't reach him. It became clear that the money was gone, and with that came the sickening realization that she'd been scammed. She called the FBI.

In the aftermath -- as she discovered that all the documents she'd been given were forged, all the phone numbers misleading, all the pretexts false, all the money gone forever and no fortune just over the horizon -- Annie had to come to a bigger realization about herself. She had been neither intelligent nor a hero. "I had wanted to give my contacts this financial structure to support them, but I hadn't even left them with sand," she says. Her voice breaks as she talks about her shame. "It's not recoupable," she adds. "There's a loss of faith, an emotional misery caused to other people. Time can't fix it."

Since then, her life has changed. For years she imagined that she'd wake up from a nightmare and find that everything was back to normal, but of course that didn't happen. Annie had lost the nest egg, and for the first time in her life, she had to think about money in terms of her own survival. Her husband became ill and had several strokes and a heart attack, and she became his caretaker. The only constant in their lives is that they got to keep their old, large apartment -- they've lived there so long, the rent is cheap.

Annie withdrew from her friends, no longer the center of any constellation. The grief would catch her at odd moments; sometimes, she'd be at the grocery store, and she'd feel her face screw up and she'd break out in tears. "I think I've got a pervading depression," she says.

Annie says her Web site is a way of giving back what she can't replace. She spends time building its "backstage tours" of typical con-artist techniques, a glossary of scam terms, "panic buttons" and links. She says she gets about 20 letters a week from fraud victims: "Most of the time, I just pick 'em up, pat 'em on the po-po and send them on their way." Annie adds that she helps victims figure out where to report the scam -- whether to the local bunco squad, the FBI or the Secret Service. She has published a list of tips so victims can write up a "narrative" for police. (In some cases, she says, she charges for her services, and she occasionally brings in a friend who's an investigator.)

"If you look at the frauds that are perpetrated with a cold eye, it's so obvious that they were dealing with a crook," Annie says. But she always listens to the victims, giving them a sympathetic ear. And when the letters get too sad, or the urge to shake someone and say "Stop being so stupid" overtakes her, she leaves her computer and does logic problems, cryptograms and puzzles as a way of escaping for a little while.

Gone is the confidence Annie once had. "You get to the point where you're wary of everyone," she says. There's something about the con game that taints everything, making anybody a potential con. Post-con, the world seems mostly lonely and full of the wrong kind of intrigue.

Annie looks back at her horrible adventure and thinks she was undone not so much by her greed for money as by her greed for power. She says she's given up on that. But there is the Web site, after all, where she is the middlewoman once again -- to be there for people in need, and maybe even to rescue them from con artists and from themselves.

"The Web site is as close as I want to get to a power trip these days," Annie says with a laugh. "I'm proud of having the perspicacity to use the power wisely."

2005 SF Gate

 

 

 

Dictionary of Financial Scam Terms

 

Lottery Scams

 

Work at home and romance scams

Reporting, crime-fighting, and victim resource links

PROFESSIONAL SERVICES / Fraud Aid Advisory Council

Copyright 2000-2009 Fraud Aid, Inc.  -  All Rights Reserved

Privacy Policy About Fraud Aid Disclaimer  Spam Policy