Carl Sagan on Fraud IV

     I am going to wrap up this discussion with just a simple observation: it has long been known by observers of human behavior that the further someone goes down a road, the more difficult it is to turn back.  This is, of course, to what Dr. Sagan was alluding in his quote.  People who try and help those who are victims of fraud sometimes react in amazement at just how far "down the rabbit hole" a victim has descended.  Some victims, even after losing everything to a fraud scam, continue to believe in the light at the end of the tunnel.

    I have seen this myself in victims of the infamous Nigerian 419 scams (referenced earlier in this Blog).  Even after the victim has sent thousands, sometimes tens of thousands of dollars to the "Nigerian Prince," still more money is sent.  There is always that faint hope among victims, tragic as it is, that this has not all been for nothing, that somewhere there will be the payoff.  For those who are not involved in the fraud, it seems unbelievable.  But, this mentality persists among victims and is taken advantage of by the fraudsters.

     Throughout this Blog, I always make reference to the fact that fraudsters are con men, they are confidence men.  This means not only that they take advantage of the victim's confidence in the fraudster, but the fraudster himself projects an unwavering belief in himself, a self-confidence which appears to the victim and is believed by the victim.  This unwavering confidence in the fraudster, even if the fraudster is only a series of emails, is what separates fraud from all other types of crime.  This ability to take a victim down the road to where there appears no turning back is an ability which fraudsters possess, even if onlookers not involved in the process cannot understand it.

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

 

Carl Sagan on fraud III

    There are many reasons why someone who is caught up in a long-term fraud scheme may be reluctant to take a step back, listen to advice and not continue with the scheme.  As I stated in an earlier post, I am not a mental-health professional and it is not the purpose of this blog to analyze people.  However, sometimes when I do have to confront victims of scams, especially those who have been victimized over a long period of time, I do have to take note of the fact that they may not be receptive to what I have to say.  In fact, they can be downright hostile.  Sometimes it seems that I am the bad guy for even daring to suggest that they are the victim of fraud.

    It is sad and depressing to have to deal with these situations.  I can sometimes feel the frustration and anger of family members or close friends that are trying to help such victims get out of the scams.  But reading Dr. Sagan's quote reminded me again that there are very human frailties which play a role in people being the victim of scams.  The desire to "get rich quick" is only one aspect of human behavior which controls or plays a role in becoming a victim. 

   Dr. Sagan's quote serves to warn us that once we go down a dark hole, sometimes it seems that there is no escape.

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

 

Carl Sagan on fraud II

The quote by the late Dr. Carl Sagan points to a type of behavior I have noticed after working for several years in the field of white-collar criminal defense and fraud investigation: after a person has been the victim of an ongoing swindle for a length of time, eventually the person refuses to believe that he is a victim.

     I am not a psychiatrist or psychologist and the purpose of this job is not to analyze people.  However, a person does not have to be a mental health professional to notice and appreciate a certain character trend. 

   The fraudsters knows and appreciates that his victim falls into certain predictable patterns of behavior.  It is the job of the fraudster to take advantage of these patterns for his own advantage and gain.  Fraudsters further know that if they can get the victim in deep enough to his scheme, they can continue the scheme.

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

 

Carl Sagan on fraud

Carl Sagan, the late astronomer and host of "Cosmos," was and is a personal hero of mine.  I am not certain if he intended for this statement to apply to those who get sucked up in fraud schemes, but I think it is appropriate.  We will discuss this in the next few posts:

"One of the saddest lessons of history is this: if we have been bamboozled long enough, we tend to reject any evidence of the bamboozle.  We're no longer interested in finding out the truth.  The bamboozle has captured us.  It is simply too painful to acknowledge, even to ourselves, that we've been taken.   Once you give a charlatan power over you, you almost never get it back."

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

 

Casino Fraud III

One of the basic forms of casino fraud is counterfeiting.  Customers try to pass counterfeit currency to employees who are working in low-light and high-pressure situations.  The employees may not have time to properly check the money.  Employees of casinos do receive training on how to handle and detect counterfeit currency, but during the harsh hours and working conditions of casinos, it is easier to front counterfeit currency.

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.

                                             

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

Interludes - Fraud in Science Publications

This is an interlude from our current conversation, but an important one.

Fraud is fraud, no matter where it occurs.  Unfortunately, it is starting to appear in greater frequency in scientific publications.  This is harmful to us all.

http://news.yahoo.com/study-fraud-growing-scientific-research-papers-190641079.html

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.

 

Have a great and fraud-free day.

 

http://www.tauskvega.com

 

----------à>>>>>>>>>>>>>>>gene tausk

More psychic fraud....

Since we are on the subject, here is some more fun...

http://guyism.com/celebrities/the-5-most-fraudulent-psychics-of-all-time.html

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.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

"Psychic" fraudsters call for help!

You seriously can't make up this stuff....

http://doubtfulnews.com/2012/05/accused-psychic-family-appeal-to-stars-of-a-different-sort/

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.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Interludes 10 - Fraud in Religion

We have covered this topic before, but once again, fraud takes all forms.  Someone using relgion as a cover to carry on a Ponzi scheme is not new.

http://news.yahoo.com/ephren-taylor-accused-11-million-christian-ponzi-scheme-155327895--abc-news-topstories.html

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.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Interludes 9 - "Psychic" fraud

Yet another reason why you should never trust a "psychic:"

http://doubtfulnews.com/2012/05/never-trust-a-psychic-san-jose-woman-guilty-of-felony-charge/

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.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

Interludes - James Randi

I've posted before about the James Randi Educational Foundation and their fight against crooks and con artists who claim "psychic" powers and then bilk innocent people out of money.  Fraud, pure and simple.

The link below follows a victim of such a scam.  Hat tip to the James Randi Educational Foundation (a great organization if there ever was one) for posting this new story.

http://www.orlandosentinel.com/news/local/breakingnews/os-psychic-fraud-meditation-healing-20120124,0,5834797.story

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.

Have a great and fraud-free day.

http://www.tauskvega.com

----------à>>>>>>>>>>>>>>>gene tausk

James Randi and Fraud Prevention XIV

Cold reading used by fraudulent investment advisors.  This is a person who uses the techniques associated with so called "psychics" and "speakers with the dead" to get information from people to use against them.

     Cold readers fall into two broad categories - cold readers either use their skills to pretend that they have special abilities or they use them for entertainment, the same way as a magician or illusionist.  The second method is for the enjoyment of everyone, the first method is to rip off people.

     Using a bit of skepticism here goes a long way.  If you are being confronted with an investment advisor that is asking you a barrage of questions and, in essence, reading the answers back to you instead of speaking to you and eliciting information from you to discover what are your goals, then there is an issue.

    Financial advisors are to make things more clear for their clients, not confuse the issue.

   So, this is but a small example of how critical thinking can go a long way.  Examine if the advisor is "cold reading" you or actually trying to discover what you want.

   We will move on to another area tommorrow.

As always, have a great and fraud free day.

http://www.tauskvega.com

--------------->>>>>>>>>>>>>gene tausk

James Randi and Fraud Prevention XIII

Let's wind up our discussion regarding cold reading and fraudulent financial advisors.

    I stated at the beginning of this thread that we would discuss how the lack of critical thinking often works with fraud.  The specific example I gave, or have been using, is that there is a link between fraudulent financial advisers (at least some of them anyway) and the technique of cold reading.  Financial advisers, by their very definition, intend to take your money from you.  The only difference between a real financial adviser and a fraudulent one is that a real financial adviser will look out for your best interests while a fraudulent financial adviser will look out for his best interests.

     A real financial adviser welcomes questions from his clients regarding his investments because he has nothing to hide and wants to share information with his clients.  A fraudulent financial adviser will try to discourage or deflect questions from his clients because he wants to hide information from his clients and hide behind a smokescreen.

     "Cold reading" techniques let the fraudulent financial adviser hide behind such a smokescreen.


Have a great and fraud free day.

http://www.tauskvega.com

--------------->>>>>>>>>>>>>>>gene tausk

James Randi and Fraud Prevention XII

So - we reviewed the difference between a fraudulent financial "professional" and a real one and, specifically, how cold reading works into all of this.

     And - I think we come to the same conclusion.  A real financial profession is interested in what YOU want, what are your goals as the client of a real financial professional, and so will ask questions designed to elicit the information from you to help you meet your goals.

     A fraudulent financial professional will use techniques such as cold reading to make you think you are the one making the decision when, in actuality, the fraudulent financial person is leading you down the path he wants.

     Once uses a method to collect information from you that allows you to think and plan.  The other uses a method of overwhelming you with information (questions) which are designed to shut down your ability to think and only to force you in one direction.

     Cold reading is a great parlor trick, but it is also a method used in fraud.  Being aware of how it is used for fraudulent means is a way of detecting it.

Have a great and fraud free day.

http://www.tauskvega.com

--------->>>>>>>>>>>>>>>>gene tausk

James Randi and Fraud Prevention XI

OK - let's put together the fraudster financial planner and the real financial planner.  And, how is this related to cold reading?

     Remember the central plan of all cold readers - questions, questions and more questions.  Barrage the mark with questions until the mark gives you the information that you want.  Asking question after question overloads the mark and confuses him, so much so that the mark doesn't even realize that he is giving the cold reader the answers he wants.

     The cold reader masks this off as some kind of "psychic" or supernatural ability instead of what it actually is - just some basic psychology at work.

     In other words, the cold reader fools the mark into giving information when he should be just admitting to the mark that this is HOW he gets his information.

     A good financial planner is the same way - a good financial planner will ask questions of the client to get the information he needs.  A fraudulent financial adviser will fool the mark into giving him information to show that he possesses "special" abilities.

More on this tomorrow.

Have a great and fraud free day.

http://www.tauskvega.com

---------------->>>>>>>>>>>>>>gene tausk

James Randi and Fraud Prevention X

OK - let's explore the questions that should be asked by an honest financial advisor:

Please visit this website:

http://blogs.economictimes.indiatimes.com/moneyhappyreturns/entry/5-personal-questions-your-financial-advisor-will-want-to-ask

And we will discuss the difference between a fraudster and an actual financial advisor later.

Have a great and fraud-free day.

http://www.tauskvega.com

-------------->>>>>>>>>>>>>gene tausk

James Randi and Fraud Prevention IX

Notice the flow of the sentences in the last posting.  Like with any cold reading, the person doing most of the talking is the cold reader and the person giving the information is the mark.

     Why is it important that the cold reader is barraging the mark with so many questions?

    We will explore tommorrow the difference between the stated goals of a financial professional and a fraudster.  It has to do with the type of information that is elicited by an actual financial professional vs. a fraudster.

Have a great and fraud free day.

http://www.tauskvega.com

----------->>>>>>>>>>>>>>>>>>gene tausk

James Randi and Fraud Prevention VIII

Cold reading example involving financial fraud:

Reader: "So, tell me about your kids' college investments."

Mark: "Well, they're not in college yet."

Reader: "So it is important to you to get your kids college investments in order?"

Mark:  "Yeah, of course.  We want to be able to make sure they get their degrees."

Reader: "So, how much money can we expect to save monthly?"

Mark:  "Well, we put aside $100 per month for each kid."

Reader: "So, you can only put aside $100 per month.  So, we need an investment with a little higher rate of return to make certain the kids can go where they want?"

To be continued.

Have a great and fraud-free day.

http://www.tauskvega.com

------------->>>>>>>>>>>>>>>>>gene tausk

James Randi and Fraud Prevention VII

Cold reading - the art of getting information from a person by getting the person to volunteer the information, usually by asking multiple, rapid-fire questions which elicit the information.

     What does this have to do with fraud?

     In the case of people who wish to get marks to invest in fraudulent or questionable investments, the fraudster needs to convince the mark that he can help the mark achieve his goals.  In this case, the goals are financial goals.  The fraudster wants to convince the mark that he can help the mark reach his financial goals, in other words, to make the mark wealthy though giving the money to the fraudster.

     No sane or rational person would willingly give a person money if the investment was a Ponzi scheme or a Pyramid scheme.  Who wants to hear that "yes, you will get your investment back and interest by getting other people to invest in my scheme."  So, the fraudster has to convince the mark that it is NOT a Ponzi or Pyramid scheme.

   How to do this - cold reading is one method.

As always, have a great and fraud-free day.

http://www.tauskvega.com

--------------->>>>>>>>>>>>>>>gene tausk

James Randi and Fraud Prevention VI

OK, so the cold reader we now know uses a barrage of questions, far more than the "20 questions" game we played as kids to elicit a response from the mark.  Eventually, these questions will start to hit home and the cold reader will be able to "hone in" on the responses, even the unconcious responses, of the mark.  The mark, even unknowingly, will be giving information to the cold reader.

     In scams such as "talking to the dead," the cold reader will be able to answer seemingly unknown or unknowable answers about the person who has passed on.  The deceased's name, hobbies, loves, interests, likes, dislikes, phobias, favorites....all is revealed to the cold reader with enough time.  And, since the cold reader does not really need a great deal of time to get the necessary information, it seems that the cold reader is indeed getting information from a mysterious source.

     Add all of these together, with a gullible mark, and the cold reader can make quite an impression.

     Note when I say that the mark is gullible, by the way, I am not suggesting that the mark is stupid.  What usually happens is that the mark is at an emotionally vulnerable point, such as after the death of a loved one, and the mark is being preyed upon by a professional who knows how to read cues that other people might miss, and with this combination, the cold reader is getting information faster than he would be with a person who might be thinking critically.

     Cold reading techniques are the hallmark of fraudsters as well.  Think about it - unless you believe in "psychic" powers (and although it is not the point of this blog to debunk "psychics," it is clear from my use of James Randi what I think of such "powers"), a cold reader is passing himself off as someone who has special skills that he does not have in reality.  So, when used improperly, cold reading can in and of itself be fraud.

     In our next segment, we will explore the use of cold reading techniques for financial fraud.

As always, have a great and fraud-free day.

http://www.tauskvega.com

----------------->>>>>>>>>>>>>>>>>>gene tausk