Affinity Fraud XII

   Affinity fraud is clearly an insidious type of fraud which preys upon the goodwill of a group.  All fraud relies on deception and lies, but affinity fraud works on a group level rather than upon individuals. 

     It should be clear from these series of posts that those who commit affinity fraud can rely on the cohesiveness of the group to allow them to skip several steps in building up trust. The trust already exists between the group members; the fraudster only has to get the leader of the group to perpetuate the fraud and this will be enough to draw in more than one person. 

     Further, the members of the group that is the victim of affinity fraud find that their guard is often lowered and the steps that a rational person normally would take to avoid being scammed are ignored. 

     Unfortunately, in the modern world (or for that matter, at any time in history), being a member of a group does not mean that human greed is not at work. 

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

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----------à>>>>>>>>>>>>>>>gene tausk

 

Affinity Fraud X

OK - we have spent the last few posts discussing what is affinity fraud and how it works.  Like any other type of fraud, the most important question is: how can affinity fraud be prevented?

     The first way to defeat affinity fraud is the most basic lesson - don't let your guard down just because someone is appealing to the group as a member of the group or through a group leader.  Group leaders and group members, unfortunately, cannot be held to a different level of trust than other individuals.  The same type of skepticism and doubt should be applied to investment schemes within the group. 

    Further, if a member of the group that is offering an investment cannot take the time to reduce the offer to writing for further analysis, this should be a clear red flag.

NOTE - information in this article is taken from an article in the March/April 2013 issue of Fraud Magazine by Frank Perri and Richard Brody.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                           

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Affinity Fraud IX

It should be obvious now that affinity fraud is difficult to stop because it takes advantage of very real human emotions.  When a person is a part of a group, whether it be a religious group, social group, recreational group, etc., there is a level of trust between the individuals.  After all, the person essentially wants to spend time with the other members of the group, otherwise they would not be there in the first place.  Therefore, when a person is committing affinity fraud, many of the doors are already open for him since all he needs to do is simply take advantage of the group connections which already exist.

     This means that a common thread in many of these schemes is that investors within the group do not do any research (or little research) on their own concerning the "investments" that are made available to group members through the fraudster.  Sad to say, but it is clear that a fraudster who infiltrates a group to commit affinity fraud is already "pre cleared" to take advantage of group members.

NOTE - information in this article is taken from an article in the March/April 2013 issue of Fraud Magazine by Frank Perri and Richard Brody.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Affinity Fraud VIII

    Fraudsters who perpetuate affinity fraud use the emotional bonds between the group members to help advance the fraud.  Remember, it is the bonds between the group members that make the group special in the first place.  A good fraudster knows how to take advantage of these bonds.

     Fraudsters move the affinity fraud forward with the group by several means.  Among them are:

1.  telling the group members that reporting the frauds will prohibit any possible returns on the investment;

2.  persuading investigators not to cooperate with investigations by referring to signed confidentiality agreements.

NOTE - information in this article is taken from an article in the March/April 2013 issue of Fraud Magazine by Frank Perri and Richard Brody.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Affinity Fraud VII

There are other reasons that a group which is caught up in affinity fraud may not want to involve the police.

1.  Many times members of the group that are themselves the victim of affinity fraud do not believe that a member of the group would steal from them.  This type of "groupthink" is common in cults, but occurs throughout other groups as well and should not be confused solely as cult behavior.

2.  This also leads into the fact that many times members of a group simply cannot accept the fact that "one of their own" would engage in such behavior.

NOTE - information in this article is taken from an article in the March/April 2013 issue of Fraud Magazine by Frank Perri and Richard Brody.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Affinity Fraud VI

   Some of the other factors that prevent a group from going to law enforcement when a fraud is going on within the group also include:

1.  A group generally desires to solve the problem within the group.  Going to an outside source, even if it is to the police or a 3rd party investigator, can be seen as a failure of the group.

2.  The group may desire not to have a member of the group prosecuted, even if the person has broken the law or done something wrong.  Once again, this has to do with the internal dynamics of the group.

3.  The group may have a desire to have the person who committed the malfeasance "repent," not be prosecuted.

NOTE - information in this article is taken from an article in the March/April 2013 issue of Fraud Magazine by Frank Perri and Richard Brody.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Affinity Fraud V

It can be seen from the previous posts that affinity fraud works much like other fraud with the defining characteristic of working within a group (normally a close-knit group).  Breaking affinity fraud, however, creates some special issues.

     First, because the fraud occurs within a close-knit group, it is difficult to get within the group.  The group dynamics usually means that there is an issue in dealing with outsiders, if not outright distrust.  In breaking affinity fraud, therefore, the main issue at first is to convince the group members to work with outsiders.

NOTE - information in this article is taken from an article in the March/April 2013 issue of Fraud Magazine by Frank Perri and Richard Brody.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

Affinity Fraud IV

     From what we have seen, it is clear that the main emphasis of affinity fraud is for the fraudster to find the group leader and exploit the leader's hold over the group to move the fraud forward.  

     It goes without saying that once the fraudster has his "hooks" into the community via the leader, the fraud can begin.  In many instances, these frauds are the usual run-of-the mill pyramid schemes or Ponzi schemes.  The only real difference is that their is an added "element" to the fraud; the fraud is perpetuated through a third party (the community leader, whether willingly or unwittingly).  But, this element adds some surprises to this entire scheme.

   This thread is based on an article in the March/April 2013 edition of Fraud magazine by Franklin Perry and Richard Brody.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Affinity Fraud III

So - to continue our discussion of affinity fraud.

After the fraudster has convinced the leader of the group that the fraudster is legitimate, the fraudster then uses the leader as a pawn to convince the group to go along with the scheme of the fraudster. 

     Unfortunately, in many groups, the leader of the group has the trust of his followers to the point where they often will listen to the leader without doing any independent research.  Keep in mind that I am not talking about a cult.  As stated in previous posts, a group relies on the strength of the group to protect its members, especially in a new society.  It is not therefore unusual for members of an affinity group to lose some of their ability for critical thought in these situations.

NOTE - this thread is based on information from the article "Affinity is Only Skin Deep" by Frank S. Perry and Richard Brody in the March/April 2013 issue of Fraud magazine.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Affinity Fraud II

     As stated in the last post, affinity refers to a kinship or a shared group characteristic.  A good example is an ethnic group.  America is a nation of immigrants and as members of one ethnic group come to America, it is only natural that (usually) the members of this group will look up other members of their community that have already been here. 

   Offenders who commit affinity fraud are usually members of the group or people who pretend to be members of the group.  This is a common way to gain entrance into the group.  Usually, the next step is for these fraudsters to enlist a respected member of this community.  The leaders of the community often have no idea that they are being set up.

NOTE - this thread is based on information from the article "Affinity is Only Skin Deep" by Frank S. Perry and Richard Brody in the March/April 2013 issue of Fraud magazine.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

 

Affinity Fraud

For some reason this post did not seem to go through, so I am reposting it.

     We will spend the next thread talking about affinity fraud.  Affinity fraud is a type of fraud where fraudsters use their similar characteristic to gain trust, whether with a religious organization, a cultural group, a linguistic group, a group of friends or any other type of group where the group members know each other and/or share a common shared characteristic(s).

      All frauds involve a breach of trust, but this type of fraud is insidious in the extreme.

NOTE: THE INFORMATION IN THIS BLOG IS NOT LEGAL ADVICE NOR IS IT INTENDED TO BE LEGAL ADVICE.  IF THE READER HAS ANY LEGAL QUESTIONS, PLEASE REFER TO AN ATTORNEY.

                                             

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk