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October 31, 2002

The underlying forms of fraud
Posted by Teresa at 09:24 AM * 59 comments

One of the odd things about confidence games is that, structurally speaking, there are so few of them—only about as many as there are simple machines. What looks like their near-infinite multiplicity is just a lot of variations on a small number of forms.

By my current reckoning there are seven:

1. Simple misrepresentation.
2. Using high-pressure tactics to confuse or intimidate the victim.
3. Shell games, sleights of hand, and switch-and-retraction cons: the pigeon drop, the Jamaican switch, Three-Card Monte, etc.
4. The Spanish Prisoner
5. Ponzi Schemes
6. Pyramid schemes
7. Selling information about, or access to, uncommon opportunities

(The list is a work in progress. I’m not altogether sure #2 belongs on the it, though I’m not sure why or why not, and #7 might turn out to be a subcategory of one of the first six. False billing is off the list, subsumed under #1. But the whole idea of a taxonomy might be folly; everyone who thinks a lot about fraud comes up with one, and they’re all different. Here’s one, here’s another.)

From these come all the myriad versions of the confidence game. Pyramid schemes include everything from chain letters to Amway distributorships to the Dotcom bubble; their commonest form is the Multi-Level Marketing (MLM) scheme. Two excellent articles on this are Le Club Scambuster’s What’s Wrong with Multi-Level Marketing? and Ami Chen Mills’ Shaking the Money Tree.

A Ponzi scheme is a pyramid scheme where the participants don’t know it’s a pyramid. It offers investors an improbably high rate of return (for whatever reason; some are quite ingenious) on short-term investments. Early investors make big profits and tell their friends about it. But in fact, there is no lucrative investment strategy powering the machine; the early investors are getting paid out of the money paid in by later ones, and they’re being strongly encouraged to roll over those profits into even bigger investments. Excitement builds. More and more people invest. At some judicious point, the scammer up and disappears: Bye-bye profits, bye-bye initial investment. In 1996-97, a plague of Ponzis took down the Albanian economy.

The family of scams based on selling information about supposedly lucrative or otherwise advantageous schemes is huge. It includes advance-fee loan finders, lists of hot scholarships or employment opportunities, manuals that tell you how to get jobs on cruise ships or Alaskan fishing boats, this bit of effrontery, most of the “work at home” and “be your own boss” scams, a dozen dozen dubiously wonderful business opportunities involving reports, or display racks, or government auctions, or reviewer coupons; and of course Make Money Reading Books.

A particularly juicy subspecies is selling bad tax-avoidance information. This one’s a beaut; you have to check it out. There’s a whole section on it at the Quatloos! Cyber-Museum of Scams & Frauds, which is a great site in general for information about tax- and finance-related frauds. For some time now I’ve been meaning to blog their Tax Protestor Dummies exhibit; this seems like the right moment for it.

Before I stumbled upon Quatloos!, I’d wondered how “tax protestors” (i.e., would-be tax evaders) managed to come up with so many wacky theories about why they shouldn’t have to pay. Turns out there’s a separate class of scammers who sell them Secret Insider Information about these great tax avoidance schemes, then walk away whistling as they count their money, leaving their customers to find out the hard way that these methods absolutely do not work.

The theories are a hoot. Quatloos also has them in the form of a neatly catalogued list, but I think the gallery of Tax Protestor Dummies is more fun. I’m particularly fond of the cases where the tax evaders argued that the court proceedings were improper because there was gold fringe on the flag in the courtroom. The page begins:

These are people who really believed in the tax protestor literature, who followed it to the letter, and then was either sent to prison for tax evasion, or sanctioned or fined for asserting a stupid theory in court, or had some goofy case against the IRS dismissed, etc. These cases demonstrate conclusively that irrespective of what the scam artists who sell the tax protestor materials tell you, the only thing that will happen is that you will get creamed by the IRS in court. Oh, and you will also have lost the money you paid for the materials, your defense attorney’s fees, the value of your lost time fighting the IRS, and your reputation as a sensible individual.
Some of the cases:
Greene v. Commissioner; T.C. Memo. 2000-26; No. 15225-98 (January 21, 2000): Argued that the federal income tax laws apply only to employees of government-related entities.

McQuatters v. Commissioner; T.C. Memo. 2000-34; No. 16871-98 (February 3, 2000): Argued, among other things, that letters addressed to “Dear Taxpayer” were fraudulent, and that “income” cannot be defined — In addition to losing, he additionally received a $5,000 fine from the court for making frivolous arguments.

United States v. Ross, No. 93-1010 (7th Cir. 1995): Argued that the district court lacked jurisdiction because Indiana is not part of the United States, and because there were no regulations issued to implement the criminal statute under which he was convicted.

Miller v. United States, 868 F.2d 236 (7th Cir. 1988): Argued that the Sixteenth Amendment was never legally ratified.

United States v. Genger, No. 87-1043 (9th Cir. 1988): Argued that the district court erroneously exercised admiralty jurisdiction over him, and that filing a federal tax return violated his First Amendment right to freely exercise his religion.

McLaughlin v. United States, 832 F.2d 986 (7th Cir. 1987): Argued that the federal income tax is a contract, and that he didn’t owe any tax because he rescinded the contract.

Casper v. Commissioner, 805 F.2d 902 (10th Cir. 1986): Argued that wages are exchanges of property rather than taxable income.

Eicher v. United States, 774 F.2d 27 (1st Cir. 1985): Argued that the Fifth Amendment allowed him to withhold all financial information from his income tax return.

Newman v. Schiff, 778 F.2d 460 (8th Cir. 1985): Irwin Schiff offered $100,000 to anyone who could prove that the tax code requires individuals to pay income tax.

Lovell v. United States, 755 F.2d 517 (7th Cir. 1984): Argued that they are exempt from federal taxation because they are “natural individuals” who have not “requested, obtained or exercised any privilege from an agency of government.”

McCann v. Greenway, 952 F. Supp. 647 (W.D. Mo. 1997): Argued that a state court lacked jurisdiction over him because the flag in the courtroom had yellow fringe on it, thus converting it into the “maritime flag of war.” A Favorite!

United States v. Greenstreet, 912 F. Supp. 224 (N.D. Tex. 1996): Filed UCC-1 financing statements against federal employees. Argued that as a “white Preamble natural sovereign Common Law De Jure Citizen of the Republic/State of Texas,” the district court lacked jurisdiction, that the case should be moved to “Our One Supreme Court for the Republic of Texas,” and that fringe on an American flag denotes a court of admiralty.

Valldejuli v. Social Security Admin., No. 94-10051 (N.D. Fla. 1994): Argued that he was fraudulently induced into signing a “contract” with the Social Security Administration, and that he is a natural sovereign citizen of the United States who is not subject to the Social Security system.

Snyder v. United States, 596 F. Supp. 240 (N.D. Ind. 1984): Argued that the I.R.S. is a private corporation and not part of the government of the United States.

McKinney v. Regan, 599 F. Supp. 126 (M.D. La. 1984): Argued that as a “Sovereign Individual,” the “Common Law of the United States of America, a Republic” protected him from penalties for filing a frivolous tax return.

Uh, yeah, right. Hard to believe they thought those would work. The final kicker, says Quatloos, is:
Somewhat humorously, in several cases where the IRS has gone after promoters of “Don’t File” schemes, it was determined that the promoter—while advocating not filing returns—had been filing their returns all along. This really isn’t surprising, since most of the promoters will secretly confide that they really don’t believe these theories either, but it makes them good money.
It’s just too cute for words.

The variety of scam I find most fascinating is the Spanish Prisoner. It’s named for its first recorded version, dating from the 16th century, when it went something like this:

Lord Whatever has been taken prisoner in Spain. He has withheld his name and condition from his captors, lest they torture him for military or diplomatic secrets; and so they think him a common soldier, worth only a paltry ransom, and hold him in conditions of great misery and want. He cannot send to have his ransom paid out of his own vast estates, since to do so he must peforce reveal himself. The man who could supply the trifling sums needed to ransom him, and bring him home safely to England, would have Lord Whatever’s eternal gratitude, and be rewarded many times over.

Naturally, there are variations. Lord Whatever can have a beautiful daughter who’ll be ever so grateful. He may be a staunch English Protestant, in danger not of being tortured for military secrets, but of being handed over to the Inquisition. And sometimes it’s just the money, plus the gratitude of the high and mighty.

What’s wonderful is that not only is it not necessary that Lord Whatever exist; it isn’t necessary that Spain exist. All you need is the piece of Secret Inside Information about an immeasurably rich prize, which for some odd reason needs to be extricated from its current situation, and which can be had for a very little money. You could play it with, say, a hitherto unrecognized Faberge egg and a pawnshop ticket. The Nigerian 419 scam is a Spanish Prisoner variant; on which, more anon.

Sometimes the McGuffin to be rescued is a fabulously wealthy unclaimed estate, like the Drake Inheritance, supposedly left to his descendants by Sir Francis Drake but tied up for centuries in court; or the Baker Estate, which supposedly included a large chunk of prime real estate in downtown Philadelphia. If you had the right surname, you got hit up for contributions to help finish the last bits of legal work and genealogical research.

Unclaimed funds are another major McGuffin. The liveliest modern variant of this (which Neal Stephenson picked up for Cryptonomicon) involves 2,000 metric tons of gold buried in the Phillippines by the Japanese near the end of WWII. The recovery project needs investors—that’s where you come in—but it has to be kept quiet, because the government will doubtless queer the deal if they find out about it. Your return will of course be many, many times your original investment.

(I am now getting to my point.)

A couple of days ago I finally put my finger on something I’ve been sensing but not grasping—you know, one of those itchy back-of-the-brain apprehensions that there’s a pattern here, only you can’t quite see what it is. Somehow it’s felt like literary analysis. The question is, why do these scams—inheritance cons, MLMs, tax dodges, Make Money Fast, hot stock tip swindles, et cetera—take the forms they do?

What did it was looking at my list of basic scams and observing that what they have in common is the promise of lucrative, risk-free investments. Lord knows the things exist, I thought, but nobody ever gives them away. In theory, high rates of return are the investor’s payoff for taking on higher-risk investments. Achieving that happy state of all payoff and no risk is the main reason the wealthy and powerful manipulate the system.

Oh.

These scams take the forms they do because they’re parodies—no, a better way to put it: they’re cargo-cult effigies—of the deals the ruling class cut for themselves. If you’re an insider, if you have the secret, you can have a job where you make heaps of money for very little work. You can avoid paying your taxes. You can inherit a pile of money because an ancestor of yours left a moderate fortune that’s been appreciating ever since. You can be your own boss. You can have other people working for you, who have other people working for them, who all pay you a percentage of the take.

Of course people believe it. After all, they vaguely know this sort of thing happens. It just doesn’t happen to them. But why shouldn’t they be the lucky ones, this time around?

I give you Exhibit A, Omega Trust & Trading, as outlined by Quatloos:

After five long years, victims of one of the longest-running bank debenture scams of the 1990s have finally realized that they have been scammed. Yes, we’re talking about Omega and Destiny, two programs in which funds were pooled so that investors (called “lenders”) could invest in various bank debenture programs. The problem, as we have repeatedly chronicled, is that bank debenture programs do not exist.

The bank debenture scam is one of the best-known to law enforcement, because it became so prolific in the mid-1990s. The storyline is that there is a “secret” banking system, in which the “prime banks” and the ultra-wealthy make trades that yield 70% per week and upwards. According to the storyline, so called “little people” (small investors) don’t have the money to enter into these transactions, so they must “pool” their funds together and let someone who does have a magical “in” to this system invest for them.

Thus also the late great bull market. As Chris Quiñones has observed, people invested in it because they thought they were finally getting in on the games the rich get to play.

My two favorite recent Nigerian 419 variants:

I know they’re pernicious, but I love Nigerian scams because the best ones are such great examples of story construction and narrative compression.

First specimen. Patrick got this one last week. I’ve transformed it from all-caps to u&lc and cleaned up the spelling a bit, just to make it more readable:

THE PRESIDENCY
14/20 WUSE II ONABANJO AVENUE
GARKI ABUJA

TEL: 234-80-371-44515,
234-1-471 8233 ,
234-80 234 233 85
FAX : 234-1-272 1250

OUR REF: FGN/ANT/DT09

FOREIGN CONTRACTORS

DEAR SIR/MADAM

ALLOCATION OF YOUR ENTITLEMENTS

This is to inform our numerous contractors all over the world the awareness of the fraudulent practices of Nigerians have reached the Federal Government attention and means to eradicate this virus from our society has been of great concerned to us.

The Federal Government on behalf of all the law abiding citizens of this great nation do solemnly regrets the action of the fraudster. And however we have been doing all within our possible powers to stop the act of terrorism in our global world

The American and British conquest against the advanced fee fraud known as 419 has been commendable and encouraging. They instigated this campaign and this is to inform you to desist from all forms of business relationships with Nigerians, the Nigerian Chamber of Commerce and Industry has been mandated to foresee any international business which involves foreign investors and business.

The British/American campaign has also given the Nigerian Government the sum of $10,000,000,000 million to compensate and pay contractor all foreign partners/investors that has suffer great financial loss in the hands of the evil perpetrators.

Hence, all foreign contractors are advised to forward the following via the above fax number:

1. The Certificate of Incorporation
2. Letter of Credit/Evidence of Due Payment
3. Name of Ministry
4. Name of Contractor

This will be crosschecked among the list given to the government by the British /American Aid and Fraud Reconciliation Committee. please we would like to inform you that prior to the evidence and proof of the activities before us.

You will have to pay a mandatory and non-refundable fee of $650 for the processing and application fee as well as the transfer fee, because henceforth all payment shall be remitted in person via our Payment Centre in Spain.

Having evaluated your contract sum and contract claims thoroughly we will forward your original documents to the corresponding bank in Spain and they will immediately call your attention and our officials located in Spain will invite to come and receive you fund in person

Please note that we have to safeguard this project, because we have discovered that some top officials are also involved in the global fraud, so please henceforth the Central Bank of Nigeria will not

1. Transfer any fund by wire/telegraphic transfer
2. Allocate an attorney for signing document
3. Charge any dollar other than the $650
4. Send the message by fax or with any logo
5. Give any authorization for payment other than the one to be provided by you as evidence.

This is the measure to ensure that the image of this great nation is maintain, we want you to know that we have a list of contractors from the British/American fraudster listing and also from our local source here we have list of people that have been defrauded based on money claimed to be in one security company or the other .

Please you are advised to desist from all emails coming from this part of the continent because this individuals are still at large and have access to governmental documents and we need also need your assistance to curb this act menacing our world. all correspondence should also be sent by mail as this is the surest way of communication: presidency@post.cz

Thanking you for your audience

Long Life the Federal Republic of Nigeria

Peter Oshinowo
Publicity Secretary
Special Aid Anti-fraud/Debt Reconciliation Committee

That is, if you’ve already fallen for one of these scams in the past (and suckers who’ve fallen for one con are proverbially prone to fall again), we can arrange for you to have a repeat experience! So ingenious, building a new Nigerian scam around mythical reparations for past ones.

This one was sent to Jordin Kare and asst’d other SF fans:

Date: Wed, 16 Oct 2002 04:03:24 -0700 (PDT)
From: augustine ogwu
Subject: FROM AN AFRICAN WRITER OF SCIENCE FICTION AND FANTASY

Hi,

I’m a writer of science fiction and fantasy. A publisher based in London approved one of my books for publication two years ago but I had to call off the deal when I realised they are vanity publishers. I have finally taken the decision to publish my novel, War of the Immortal Kinds, both in print and as an e-book. It is the first real fantasy novel ever to be published by an African and I do hereby request your financial support for the publication.

War of the Immortal Kinds adeptly depicts a Fantasy world governed by unearthly powers and the mystic. The work is also a celebration of nature and humanity in which the impotance of friendship and the pleasure of a life without material possessions was emphasized. I assure you that your support won’t be a waste. The book will surely hold the world spellbound. I will soon open a website where a short story, Beyond the Blue Sky, can be downloaded.

Regards
Augustine .k. Ogwu

Go here for a last word on Nigerian scam letters. I’ll fix the link when Donald Davies fixes his, but for now just scroll down until you find “Dial 419 for fun”.
Comments on The underlying forms of fraud:
#1 ::: Glen Engel-Cox ::: (view all by) ::: October 31, 2002, 12:15 PM:

As always, a insightful and witty entry, Teresa. Over on one of the online communities I hang out in, we've been collecting some of the more innovative spam entries, including news stories about spam tactics, including this one:

with Palestinian cause and Islamic target
September 15, 2002; Almost everyone in the US with an Email address has received an offer from some corrupt official in Nigeria (or some other country) offering a multi-million commission if you will help them move some stolen or mislaid government funds out of their country through your bank account. Such offers are, of course, a scam, and result in the "foreign official" draining any bank account he is told about and begging for just a few hundred more dollars for fees and bribes. But the story now has a new twist. The Nigerian scam artists are sending their Emails to people in Moslem countries (first to identified businessmen in Saudi Arabia and more recently to anyone in many Moslem countries). Their new offer is that these forgotten or stolen or lost millions are being routed to the Palestinian Authority for use in feeding their people and buying guns to continue the struggle (minus a few hundred thousand paid as a commission to any helpful Arab businessman). Reportedly, the scam is enjoying some success from such efforts, as many Moslems are more interested in profiting by helping a good cause than in profiting by helping criminals smuggle their loot out of their country.--Stephen V Cole
http://strategypage.com/fyeo/howtomakewar/default.asp?target=HTIW.HTM

And then there's the wonderful parodies of Nigerian spam that have started to make the rounds, including this one:

Nigerian spam meets... H P Lovecraft?
http://www.geocities.com/steerp1ke/David_Ehi.html

Enjoy!

#2 ::: David Moles ::: (view all by) ::: October 31, 2002, 12:47 PM:

Actually, I'm pretty sure Randolph Carter's conversation with Chief (Dr.) David Ehizojie is legitimate (for some admittedly rather thinly stretched meaning of "legitimate").

#3 ::: John Farrell ::: (view all by) ::: October 31, 2002, 12:54 PM:

Subject: FROM AN AFRICAN WRITER OF SCIENCE FICTION AND FANTASY
Ha! I think just got that one over the last weekend. And I also (every month it seems) get another Nigerian begging for help to move funds from Africa into the U.S., in return for a percentage....

#4 ::: John M. Ford ::: (view all by) ::: October 31, 2002, 01:24 PM:

Ten quadrillion dollars (as we systems geeks are wont to refer to "$10,000,000,000 million") is certainly a great deal of money, but of course the US is a wealthy nation and the UK publishes THE ECONOMIST, and it is good to know that this sum will be used for such a worthy cause. Besides, if it were paid out on a global -per caput- basis (roughly $1.5 million per individual, excluding the Iraqis, of course) it would only cause inflation.

(I could actually talk about scams, but they have been a hobby for a very long time, and we would be here all night.)

#5 ::: Teresa Nielsen Hayden ::: (view all by) ::: October 31, 2002, 01:26 PM:

Oh, do feel free. Please.

#6 ::: Kevin J. Maroney ::: (view all by) ::: October 31, 2002, 01:57 PM:

I suppose I need to start a commonplace book (or implement a stickier brain), because your point about confidence*scams being cartoon versions of what the rich actually do reminds me of a recent Paul Krugman piece about an investment instrument which is available only to "qualified investors"--which is to say, people with a net worth significantly higher than US$5 million--which allows a group of investors to hide their income from equities well enough that they can effectively declare any income they want to for tax purposes. (Basically, the investment pool is structured in such a way that it's very hard to determine the basis on which any income is made for any individual investor.)

One of the disgraceful things about the current US legal system is how much is not illegal, or is illegal but has such small risk that it's effectively legal.

*Not all scams are confidence scams. I believe that a "confidence game" only refers to a type of scam which entices the mark with an opportunity to take illegal or unscrupulous advantage of others.

#7 ::: Bill Altreuter ::: (view all by) ::: October 31, 2002, 05:10 PM:

I love stuff like this-- thanks for laying out the ontology of the con game. A terrific book-- that you probably know about-- is The Big Con,which Walter Roy Hill adapted to make "The Sting". The hilarious thing about all scams like this is that the perpetrators know that they need to work to get the mark's money-- they know better than to think that money can be made any other way. Of course, then they blow it all at the track or something, but for the most part that's recreation, adn they go into it with their eyes more or less open.

#8 ::: Arthur D. Hlavaty ::: (view all by) ::: October 31, 2002, 05:48 PM:

There's a book called _The Informant_, by Kurt Eichenwald, which tells all sorts of wonderfully repulsive stuff about the crimes and culture of Archer Daniels Midland. What starts the whole mess that wound up with major federal cases began back in the 80s when of the corporate geniuses heard of this really clever way to steal money from Nigeria...

#9 ::: Jim Meadows ::: (view all by) ::: October 31, 2002, 06:41 PM:

I was struck by your use of the Omega Trust and Trading scam as an example of the cargo-cultishness of confidence games. The Omega scam was based in the town of Mattoon Illinois, just two counties away from me. As a reporter, I covered a hearing or two, featuring Clyde Hood, the scam's instigator. I admit the main thing that ran through my mind was that Hood must have a lot of personal charm, because he didn't seem all that bright to bring off a scam. The bigger picture, that con games of this nature tap into people's thoughts of some magical level of existence where the elite get their way, never occurred to me. It's something to keep in mind in the future.

#10 ::: Jordin Kare ::: (view all by) ::: October 31, 2002, 09:46 PM:

So, Teresa, where do you file "predicting the market" frauds.

(Mark gets a series of letters offering free samples of investment advice: stocks X, Y, Z will go up next week -- and they do! After a few such letters, one comes offering to invest the mark's money, or simply to sell him the next prediction. The con artist has, of course, sent out hundreds or thousands of letters with different predictions, and followed up on the ones that happened to be correct.)

Seems to me it's not quite the same as #7, although it's related, and it has a large range of possible variations.

#11 ::: Cory Doctorow ::: (view all by) ::: October 31, 2002, 11:42 PM:

Don't miss -- DO NOT MISS -- "The Big Con," the definitive text on grift. Here's a review I wrote of it.

#12 ::: Stefan Jones ::: (view all by) ::: November 01, 2002, 09:29 AM:

"cargo cult effigies--of the deals the ruling class cut for themselves . . . But why shouldn't they be the lucky ones, this time around? "

Dead-on target, that.

Teresa, this analysis deserves to be an essay published someplace mainstream and serious.

#13 ::: Paul Bissex ::: (view all by) ::: November 01, 2002, 09:30 AM:

Great piece, Teresa. I think your insight about "finally getting in on the games the rich get to play" is spot-on. (BTW, if you haven't already, you should read the Wired News story from a few months back in which a Nigerian scammer talks about their conscious stylistic and narrative choices.)

#14 ::: Jeremy Hornik ::: (view all by) ::: November 01, 2002, 11:47 AM:

That's a great observation. There's a book in that somewhere...

When I was in college, I did my senior thesis on confidence games in literature and film. What I came away with was an understanding that a really superior con game implicated the victim (as greedy, irresponsible and often criminal) while elevating the perpetrator... all stated much better as, "You can't cheat an honest man."

I'm not sure exactly what that has to do with effigizing the money machines of the wealthy (something about breaching the social contract by having aspirations above your station.) But con games and scams all seem to mine into the great themes of fiction (class, greed, truth) because they are, in and of themselves, stories.

#15 ::: Alan Bostick ::: (view all by) ::: November 01, 2002, 12:01 PM:

The one problem I see with your theory of scam-as-cargo-cult, Teresa, is that the Rich are every bit as vulnerable to such scams as the rest of us. Heck, remember the business at Enron when the New York investment bank analysts were brought in to see the room full of "traders" busily placing orders to buy and sell energy futures. It was, of course, nothing but a "Big Store" scam. Enron took a lot of little people down, but it also took a lot of big people down, too.

And don't get me started about IPOs....

#16 ::: Alan Bostick ::: (view all by) ::: November 01, 2002, 12:33 PM:

A peculiar thing about another fandom I inhabit, that of of high-stakes poker players and "professional gamblers" (i.e. hustlers), is that scamming and conning are well-regarded, and a skilled con artist is held in high esteem by the community.

Cheating at cards is Not Done of course (the prevailing ethic is that only someone who is a bad player would need to resort to such a desperate measure), but other scams are fair game.

Here's a rather tidy version of the Wire, ensmalled into a single cab ride. What's truly entertaining about this story is that it appears in a magazine whose publisher is devoted to "cleaning up poker," doing away with its seedy back-room reputation.

#17 ::: Adam Rice ::: (view all by) ::: November 01, 2002, 01:20 PM:

Excellent post. Visions of David Mamet stories danced through my head as I read it.

#18 ::: Steve Cook ::: (view all by) ::: November 01, 2002, 02:43 PM:

The Big Con is a wonderful book; I'm sure everyone heard about Drake's Fortune, a recent short book about Oscar Hartzell. I recently reread The Baron of Arizona, an account of forger James Reavis' plan to extort money from wealthy landowners by means of a forged Spanish land grant (and numerous forged supporting documents) that indicated he was the rightful owner of twelve million acres of the Arizona Territory (more info here, along with some info on Alves Reis, a Portugese forger who almost managed a takeover of the Bank of Portugal). The key with these people was getting some traction and then attempting to buy or bully their way to legitimacy; I'll leave any analogies to legal enterprises as an exercise for the reader.

#19 ::: Robert L ::: (view all by) ::: November 01, 2002, 06:27 PM:

The Big Con is indeed excellent. Another very entertaining book on this subject is Trick Baby, by Iceberg Slim [Robert H. Beck] (Holloway House).

#20 ::: James Macdonald ::: (view all by) ::: November 01, 2002, 11:31 PM:

Here's a site on the various Get Paid To ... do whatever scams:

http://www.geocities.com/acidtestgpts/

#21 ::: John M. Ford ::: (view all by) ::: November 02, 2002, 01:57 AM:

Minor correction: THE STING was directed by George Roy Hill (Walter Hill is another fella) and written by David S. Ward.

The late William Read Woodfield, who with his writing partner Allan Balter was an early story editor on MISSION: IMPOSSIBLE (and heavily responsible for its recurring con-game aspects) noted that at one time, Maurer's THE BIG CON was almost required reading among screenwriters.

Another book worth looking up in this literature is Jonathan Kwitny's THE FOUNTAIN PEN CONSPIRACY,* about ah informal ring of swindlers who were highly active in the Sixties. Among many other things, they created a phony bank on the Channel Island of Sark to provide bona phonies for their operations. Kwitny used to work for the WSJ, and has the level of detailed reporting one would expect.

More anon, really -- just perching between days of World Fantasy.

*As I've traveled this world over,
I've met lots of funny men;
Some'll rob you with a six-gun,
Some with a fountain pen.
-- Woody Guthrie

#22 ::: Laurie Mann ::: (view all by) ::: November 02, 2002, 08:49 AM:

I am shocked, yes, shocked that this version of
the Nigerian scam has not been discussed here.
I don't know who wrote it, I only know I send it
to anyone who sends me a variant on Nigerian spam:

DEAR friend.

I AM PRINCESS LEIA ORGANA ONLY SURVIVOR OF THE ROYAL FAMILY OF ALDERAN (ALDRN).

I AM MOVED TO WRITE YOU THIS LETTER, THIS WAS IN CONFIDENCE CONSIDERING MY PRESENT CIRCUMSTANCE AND SITUATION.

I WAS FALSLEY IMPRISONED UPON THE IMPERIAL BATTLESTATION ("DEATH STAR") WHEN MY PLANET WAS HIDEOUSLY DESTROYED AND ENDED BY THE BVERY BAD SITH LORD VADER.

I ESCAPED ALONG WITH THE AID OF BRAVE REBELS AND WOOKIES, AND AM NOW I AM LYING LOW DUE TO THE SITUATION IN THE 4TH MOON OF YAVIN TILL WHEN THINGS GETS BETTER.

I HAVE CONTROL HERE OF THE SUM OF $25, MILLIONNN IN IMPERIAL CREDITS DEPOSITED WITH A SECURITY COMAPNY FOR SAFEKEEPING ON TATOOINE.

THE FUNDS WERE SHIPPED BY A COURIER SERVICE AS DIPLOMATIC ITEMS OF HIGH VALUES TO PREVENT THEM FROM KNOWING THE CONTENT.

WHAT I WANT YOU TO DO friend IS TO INDICATE YOUR INTEREST THAT YOU WILL ASSIST ME BY RECEIVING THE MONEY ON OUR BEHALF ON TATOOINE AND ASSIST IN INVESTING THIS MONEY IN ANY LUCRATIVE BUSINESS LIKE MOISTURE FARMS AND STOCK IN MULTI-PLANETARY COMPANIES AND OTHER SAFE LUCRATIVE INVESTMENT IN YOUR SECTOR.

MAY I AT THIS POINT EMPHASISE THE HIGH LEVEL OF CONFIDENTIALITY, WHICH THIS BUSINESS DEMANDS, AND HOPE YOU WILL NOT BETRAY THE TRUST AND CONFIDENCE WHICH I REPOSE IN YOU.

IN CONCLUSION,IN THE EVENT YOU ARE INTRESTED TO ASSIST ME I WILL LIKE YOU TO CONTACT MY LAWYER WHO I HAVE STATIONED IN MOS EISLEY TO WITHNESS THE TRANSACTION TO IT'S CONCLUTION.

YOU CAN REACH HIM ON HIS DIRECT LINE VIA MAIL [email removed for protection], HIS NAME IS WATTO THE TOYDARIAN, I HAVE THE FULL TRUST IN HIM.

FINALLY, I HAVE SET ASIDE 15% OF THE TOTAL SUM OF THE FUNDS FOR YOUR ASSISTANCE,AND 5% FOR ANY ESPENCES THAT SHALL BE INCURED DURING THIS TRANSACTION.PLEASE BE FREE TO DISCUSS WITH MY LAWYER.

I SINCERELY WILL APPRECAITE YOUR ACKNOWLEDGMENT AS SOON AS POSSIBLE.

HELP US, friend, YOU ARE OUR ONLY HOPE.

BEST REGARDS,
PRNCSS. L. ORGANA

#23 ::: Randolph Fritz ::: (view all by) ::: November 02, 2002, 07:12 PM:

I think there is probably a belief on the part of many of the people taken in by these things that all wealth comes from scams, so why not this scam? I suppose such scams do best in two times: during investment bubbles, when they seem most plausible, and during hard times, when people desperately want to believe. When scams are so successful, it's hard to persuade anyone--rich, poor, or in-between--to stick to doing real things of actual value.

#24 ::: Glenn Hauman ::: (view all by) ::: November 02, 2002, 10:21 PM:

For a different take on fraud-- a very recent high-tech forgery of sorts on a subject near and dear to my heart, to the tune of $3 million-- check out my blog.

#25 ::: Kip ::: (view all by) ::: November 03, 2002, 12:22 AM:

Glenn, I'm having trouble with your blog. I gave it my credit card number and my bank account, just like it said, but I still can't seem to get to the page. I'll give it just one more try, but if it won't accept Pay Pal, I don't know what else to do.

#26 ::: James Macdonald ::: (view all by) ::: November 03, 2002, 10:20 AM:

http://www.alsirois.com/writing/agent01.htm for a story about a bogus literary agency.

#27 ::: Alan Bostick ::: (view all by) ::: November 03, 2002, 02:39 PM:

When the dust settles from WFC, I would highly commend to everyone who cares about cons and scams, but especially to Mike Ford, to see the movie NINE QUEENS, now newly released on video.

#28 ::: Robert L ::: (view all by) ::: November 03, 2002, 09:24 PM:

"Nine Queens" is indeed a fresh take on the con game. Mamet's "House of Games" is also good of this sort, though overly serious in tone.

#29 ::: James D. Macdonald ::: (view all by) ::: November 03, 2002, 10:48 PM:

As far as the Nigerian spam/fraud goes, I trust everyone has seen the Adventures of Wendy Wilcox and her dog Willis?

http://www.angelfire.com/comics/wendywillcox/

#30 ::: James D. Macdonald ::: (view all by) ::: November 03, 2002, 11:13 PM:

And still more, this being the Make Money Fast Hall of Humiliation.

http://www.mmfhoh.org/?target=columns

I'm not seeing so many Make Money Fast letters anymore. Either people are getting smarter, or the spam-filters are getting better.


#31 ::: Richard Brandt ::: (view all by) ::: November 04, 2002, 11:18 AM:

By a fabulous coincidence, in my emailbox this morning is a variant on the Nigerian scam, only not-so-subtly tailored to appeal to racist sentiments as well: White Zimbabwean farmers exiled to Angola, and as ASYLUM SEEKERS not entitled by the Angolan government to certain financial rights, such as the 30 million dollars in a European bank which their father willed them just before Mugabe's supporters shot him to death and burned his farm down. (You know the rest.) Fascinating stuff, wot?

#32 ::: Chuck Divine ::: (view all by) ::: November 04, 2002, 03:37 PM:

I've taken to replying on occasion to the 419 scams as

Chuck
Vulcan Senator
Ambassador Plenipoteniary to Earth
Federation of Sentient Planets

What initially surprised me was that some of these fools responded to me.

Once, when someone asked me for a picture of Vulcan, I sent him one of my pieces of SF art (see http://home.att.net/~chuck.divine/sfart/).

#33 ::: John M. Ford ::: (view all by) ::: November 04, 2002, 03:43 PM:

1. Know ye then, that our Parents were driven forth from the land of their sole possession and birthright, by an angel which did bear before him or her an flaming sword.

2. Before they did pass from this life, these our parants did reveal unto us the location of the Tree of Life, which is like unto an antioxidant and Botox in the selfsame fruit.

3. Be aware that your name was shewn unto us by the Knowledge of Good and Evil, nor is this Spam; and verily do we hope that with your good aid, may the Land and the Trees thereon be restored unto us.

4. Please delay not, as time is short, and I fear some falling out with mine brother, who is not an Arborist, that should bring your efforts to nothing, a woeful outcome indeed.

#34 ::: Bob Webber ::: (view all by) ::: November 04, 2002, 07:52 PM:

I can't go as far back as Dr Mike, but note that "to be sold a bill of goods" by a con artist was proverbial in Elizabethan times.

The idea of a comedy featuring a con artist goes back at least to 1610 and The Alchemist by Ben Jonson. If you can get past the archaic colloquial speech of some of the characters, this is a truly rich comedy. Jonson's comedy is very much like the confidence trick comedies of the present day, with the exposition of the nature of the tricksters followed by a series of expositions of the scams in progress and the corruptness of their victims.

The climax comes about, as in modern comedies, as the conspirators' greed continually increases the pace and number of scams and as the gambler Pertinax Surly tries to get his friend, the fat knight Sir Epicure Mammon, out of the Alchemist's clutches and snap up a loose widow (Dame Pliant) to be getting on with.

It is a nice, compact caper comedy which ends by pointing out that we are less than outraged by fraud (at least when perpetrated on others or to ourselves to a degree that's easy to ignore) because we find the variations of the fraud mechanism as irresistably funny as the seventeen modes of slip-and-fall humor.

#35 ::: Scott Lynch ::: (view all by) ::: November 05, 2002, 01:00 AM:

Although it's difficult to top the Yellow Kid, my personal favorite grift of all time has to be when "Count" Victor Lustig sold the Eiffel Tower to scrap metal dealers... twice.

http://home.nycap.rr.com/useless/lustig/

Cheers,

SL

#36 ::: Teresa Nielsen Hayden ::: (view all by) ::: November 06, 2002, 08:23 AM:

Go on, Arthur. How does Archer Daniels Midland connect with Nigerian 419s?

Jordin, I'm not sure where to file the half of half of half market-prediction scam, but I've always admired its elegance. ... Yeah, I think you're right, it belongs in Category 7.

Stefan, from your mouth to God's ears.

Jeremy, I'm inclined to believe that the existence of the superior con game that implicates the victim and elevates the scammer is a self-justifying hero-tale told by the grifter tribe. It's not true that you can't cheat an honest man. Sure, tax-avoidance schemes only work on people who're trying to avoid paying their taxes. But look at the Omega bank debenture scam. People who fall for it think it's a legit investment mechanism that's normally inaccessible to persons of moderate income. Given that setups like the one Kevin Maroney describes actually exist, where's the dishonesty in falling for it?

I'm an American. We don't believe that having aspirations above one's station is a breach of the social contract.

I agree, absolutely, that con games are a variety of microtheatre -- a characteristic they share with magic tricks. It's what makes them interesting.

Alan, the rich are not just as vulnerable as everyone else. When was the last time you saw one of them selling Amway? The rich have access to professional-quality advice and money management services. They may have occasional episodes where they're overpowered by greed and throw caution to the winds, but that's only a fraction of the pattern.

Jim, thanks for the links. I've incorporated some of them into the original post.

#37 ::: James Macdonad ::: (view all by) ::: November 07, 2002, 11:46 AM:

May I comment here that a flag with a gold-fringe border is not a "maritime flag of war"?

A flag with a gold fringe is an indoor flag.

#38 ::: Teresa Nielsen Hayden ::: (view all by) ::: November 07, 2002, 06:45 PM:

Thank you, James. You would know.

#39 ::: Stephen M. St. Onge ::: (view all by) ::: November 09, 2002, 10:17 PM:

My alltime favorite scam was an IPO during the South Sea Bubble:

"An Undertaking of Great Advantage, but No One to Know What It Is."

He spent a day collecting, then left town in a hurry.

When I'm in the mood, I send the 419 scammers the following letter in reply:

From: laura419@hotmail.com

To:

Subject: REQUEST FOR CONFIDENTIAL BUSINESS TRANSACTION

ATTN: President/CEO

I am the widow of the late President George W. Bush of the United States of America. I am writing you this letter in confidence regarding my current circumstances.

I escaped the United States ahead of death squads with my husband and two children Jenna and Frank, moving first to England and then, when my husband's political enemies took power there, to Austria. All of our wealth, obtained legitimately through baseball, oil drilling and insider trading, was seized by the new government of the USA under the despotic regime of (Dr.) Noam Chomsky, except for the contents of a few Swiss bank accounts. These bank accounts, which contain social security lock-box funds and the bulk of the 2001 budget surplus, could not be accessed by me or my children, due to agreements made between the socialist government of the USA and Swiss bank regulators. They seized our ranch in Crawford, Texas and now use it to teach homosexualist propaganda to schoolchildren!

When my husband died during a visit to the Mr. Salty factory here in Vienna, I decided to lie low, changing my identity and communicating only through Mrs. Peggy Noonan. However, now that Chomsky is dead of apoplexy, my advisors suggest that the time is right for me to transfer some of these funds. I will wish to deposit $1,250,000,000 in a bank account for certain purchases, investments and other safe and reliable business opportunities. Please respond to this letter and indicate your interest in receiving the money for us. I will stress again how important confidentiality is; my husband's political enemies would like nothing better than to see me made penniless and our hard-earned retirement funds turned over to Tom Daschle.

Please respond with your contact information, including fax and telephone numbers, to signal interest in this mutually beneficial transaction. I will provide an introduction to my son (Frank), who will work with you in determining the logistics of the transfer and the method and amount of your remuneration. I would contact you via phone directly, but a spot of trouble in my youth has made me doubt myself around heavy machinery.

In sincere anticipation of a productive relationship,

Mrs. George W. Bush

#40 ::: Teresa Nielsen Hayden ::: (view all by) ::: November 10, 2002, 11:44 PM:

Nice 419. Yours? And thanks for reminding me of that bubblet. The scheme was brilliant in its purity.

#41 ::: James D. Macdonald ::: (view all by) ::: November 20, 2002, 01:31 PM:

Miss Teresa notes: "Sure, tax- avoidance schemes only work on people who're trying to avoid paying their taxes."

But listen: Isn't that too a parody of the tax-payments of the rich and powerful? Who pays more taxes: Your Average Joe with a mortgaged house in the suburbs, or George W. Bush and his twenty closest friends combined?

#42 ::: [спам удален] ::: (view all by) ::: August 23, 2010, 01:48 AM:

[столб от 211.232.186.113]

#43 ::: Earl sees spam at 43 ::: (view all by) ::: August 23, 2010, 02:32 AM:

That phone number shows up over 500 times online.

#44 ::: Russian spam, no less ::: (view all by) ::: August 23, 2010, 11:08 AM:

Ah, the 21st century...

#45 ::: David Harmon ::: (view all by) ::: August 23, 2010, 12:01 PM:

Stale links from the OP: "High-pressure tactics" is gone. The "Jamaican switch" link is gone, but Here's a list of scams on the same site. "Opportunities" goes to Geocities and is gone.

While I'm at it, a few links for the Spanish Prisoner: Celtnet, Wikipedia, Marauders at the Silicon Gates, Snopes (as "Nigerian Scam")

#46 ::: presaged bourbons ::: (view all by) ::: August 23, 2010, 03:35 PM:

There's something ironic about seeing it turn up on this particular thread...

#47 ::: David Harmon was caught by the filter ::: (view all by) ::: August 23, 2010, 04:41 PM:

Link-heavy comment held for moderation.

#48 ::: abi ::: (view all by) ::: August 23, 2010, 04:53 PM:

David @ 48:

Actually, the gnomes tell me that last b0rked link is the thing that made your comment stick in the Ingenious and Intricate Mechanism for the Publication of Opinions, Commentary, Light Versifications, Word-play &c.

Much though I prefer preventative contols to detective ones, I am afraid that in this case I am forced by circumstances to suggest that the best solution would be to check at preview.

Must dash now—

#49 ::: Serge ::: (view all by) ::: August 23, 2010, 05:06 PM:

abi @ 49... Must dash now

Punctuality is a virtue.

#50 ::: Mark ::: (view all by) ::: August 23, 2010, 06:46 PM:

But there's always time for abi's periodic reminders.

#51 ::: Leroy F. Berven ::: (view all by) ::: August 24, 2010, 01:09 AM:

To the commatators.

#52 ::: Mary Aileen ::: (view all by) ::: August 24, 2010, 10:24 AM:

Or even apostrophized.

#53 ::: Rikibeth sees spam ::: (view all by) ::: November 29, 2010, 07:09 PM:

Link in the username suggests it's potted meat product with a foreign language on the tin.

#54 ::: Paul Duncanson Sees Spam ::: (view all by) ::: November 29, 2010, 07:09 PM:

You can't have spam, egg, sausage and spam without the spam!

#55 ::: Lexica suspects spam ::: (view all by) ::: November 29, 2010, 07:11 PM:

The website linked to the commenter's name is setting off my spam sensors.

#56 ::: David Harmon ::: (view all by) ::: March 27, 2011, 11:15 AM:

Linkwatch: T's "bit of effrontery" has a server error on that page; they seem to have switched to bundling all their documents into one $37 blivet. Also, Quatloos! has moved here.

#57 ::: David Harmon ::: (view all by) ::: March 27, 2011, 01:15 PM:

Also, this has been discussed elsewhere on ML, but apparently not noted here: The "vanity press" scammers such as AuthorHouse fall under "Spanish Prisoner" scams. The McGuffin for those is "Being a Published Author", with an optional side of "Wealth And Fame"

#58 ::: Jim Macdonald ::: (view all by) ::: June 29, 2011, 04:38 PM:

Sovereign Citizens vs Bankruptcy Court:

The case centers around Giordano's owner John Apostolou, who was forced to give up his control of the pizza chain, which he's owned since 1988, after his businesses fell into $45.5 million worth of debt. The chain has been under bankruptcy protection since February, but Apostolou only lost control after he submitted some court filings in the style of the sovereign citizen movement. One filing declared that Apostolous and his wife are "American Freemen, free inhabitants of the Illinois state, and we find it impossible to obtain State declared Legal Tender at Law." They also said they don't believe in U.S. currency or the legal system, typical beliefs of sovereign citizens, who generally consider almost all branches of the U.S. government to be illegitimate.

It didn't work.

#59 ::: debcha ::: (view all by) ::: February 11, 2013, 02:23 PM:

Ah! Scam as cargo-cult effigy is the general version of the the special case I've been thinking of recently.

As an academic, I frequently get e-mails from 'predatory publishers'--sites that purport to be online, open-access peer reviewed journals (here's an example). I've been thinking that it's cargo-cult academic publishing--that it takes a form that is nominally similar to real journals (editorial board, 'peer review', albeit with risibly short turn-around times, 'open-access'). So you can pay to 'publish' your work in these faux-journals, and all of the benefits of being a scholar will magically accrue to you without having to do the hard work of a) doing research and b) convincing others that it's worthwhile.

Welcome to Making Light's comment section. The moderators are Avram Grumer, Jim Macdonald, Teresa & Patrick Nielsen Hayden, and Abi Sutherland. Abi is the moderator most frequently onsite. She's also the kindest. Teresa is the theoretician. Are you feeling lucky?

If you are a spammer, your fate is in the hands of Jim Macdonald, and your foot shall slide in due time.

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