Aww grifters, the romanticized con artists who rely on human nature to make a quick buck; also the topic of a classic Simpson’s episode.
But while some might daydream about taking advantage of our fellow citizens, others actually do it. And thanks to the Internet, there are more ways that people can be taken advantage of today. Since this is The Uniter’s special issue questioning power in society, we have compiled a list of some classic cons to ensure you don’t become a sucker. We’ve also looked at some of the swindlers who’ve been able to take a surprising number of people for a ride.
Scams and fraud
Anyone can fall victim to a scam. Depending on the type of scam, some people are more likely to be duped if they are dishonest or greedy – that’s why the phrase ‘You can’t cheat an honest man’ is sometimes used. Scams and frauds vary, from get-rich-quick schemes, to romance and gambling tricks, to blue and white-collar crime. The Internet has also given rise to a plethora of scams and fraud.
Pyramid schemes are a favourite. The RCMP describe pyramid scams as ones in which the person participating earns more cash then they originally invested by recruiting more people – the trick is that the product or service being sold has no real value and the money is made by recruitment.
Ponzi schemes are similar to pyramid schemes. Investors’ funds are returned not from earnings, but from subsequent investors – there are no legit investments and the money from the later investors is used to pay off the earlier obligations. (Read about the man that started it all, Charles Ponzi, below).
The word phishing comes from the idea that Internet scammers use e-mails to fish for passwords and financial info from the sea of users. Phony e-mails and websites are made to look like legit sites asking for people to confirm their personal info, at which time the phishers wipe out credit cards, bank accounts and so forth. According to the Winnipeg police, if you want to avoid being phished, don’t reply to e-mails with your personal info – banks and legit organizations will never ask for this info via e-mail.
Some famous scammers
Charles Ponzi (1882-1949) is known as one of the greatest swindlers in American history. Using discounted stamps purchased in other countries and redeemed at face value in the United States, he promised investors profits of 50 per cent in 45 days and 100 per cent in 90 days; close to 20,000 bought into the scam. Ponzi was caught and charged in 1920.
This young author wrote Natural Cures ‘They’ Don’t Want You to Know About, a book which accused the FDA, drug companies and the food industry of trying to keep natural disease cures away from the general public and which was a New York Times bestseller in 2005. Before becoming a bestselling author, Trudeau (1963) spent two years in a federal prison in the ’90s and was accused by the Illinois attorney general of running a pyramid scheme while working at a health products company. The Federal Trade Commission also accused him of making false claims in infomercials in 1998. Take that, health nuts!
Bernard Madoff (1938) is the most recent con artist kingpin. In a case still before courts, Madoff is accused of swindling investors out of up to $50 billion; many are calling it the biggest Ponzi scheme of all time. Apparently, returns weren’t coming from investment gains but rather from new clients, and when clients wanted to pull back their investments thanks to the current economic crisis, Madoff was forced to admit there was no money.
Published in Volume 63, Number 19 of The Uniter (February 5, 2009)