The Anonymous Confessions of a Con Artist

A veteran scammer reveals how he made millions by ripping off unsuspecting investors—and how you can protect yourself from people like him.

By Doug Shadel from AARP the Magazine
Also published in Reader's Digest Magazine November 2013

IT’S ABOUT EMOTION
Think about the first time you fell in love or a time when someone cut you off on the freeway and you were seething for hours. Were you thinking clearly? Probably not. Those who believe they would never fall for a scam don’t realize it’s not about how smart you are; it’s about how well you control your emotions. Fraud victims are people with emotional needs, just like the rest of us. But they can’t separate out those needs when they make financial decisions.

As a master closer, I made it my first objective to get the victim “under the ether.” Ether is that fuzzy state when your emotions are stirred up and you’re so agitated that you won’t know which way is up and which is down. Once I have gotten you into this condition, it doesn’t matter how smart or dumb you are. Ether trumps intelligence every time. The two most powerful ways to do this are through need and greed.

To find a client’s emotional need, I’ll ask personal questions. Then I’ll throttle up the pressure by focusing on that need. “Oh, you lost your job? That’s got to be tough.” Or “So your two kids are in college, and the tuition is driving you into the poorhouse.” Now the person isn’t thinking about whether the offer is a scam; instead he’s thinking, Here’s a fix for my problems.

The crush or the kill—that’s what we call closing the deal—is emotionally driven. It’s not logic. If you apply logic, the answer is “No, I am not going to send you my hard-earned money. I don’t even know who you are.” If my victims had applied logic to our deals, they would have walked away every time.

The other pathway to the ether is simple greed: I just promise people they can make a ton of money.

THE PERFECT VICTIM
I’m often asked how I could have ripped off senior citizens. The answer is that con men target people who have money, and a lot of seniors are sitting on fat nest eggs. It’s the Willie Sutton rule: He robbed banks because that was where the money was.

But there’s more to it than that. I think older people are easier to scam because their emotional needs are closer to the surface. They aren’t afraid to tell people how much they care about their kids and grandkids. They aren’t afraid to share their fears about the unstable financial markets and how much they worry about being on a fixed income. These fears are real. And every one of them is a bullet for my gun.

My scam career was focused on investments like phony oil and gas deals, bogus business opportunities, and gold-coin scams. And for these types of investments, the perfect victim was almost always a male. Why men? Men are more emotional than women. Men are grandiose; they are full of ego. And that’s all driven by emotion; it’s driven by insecurity; it’s driven by a feeling of inferiority.

Most people who get emotional will fall quickly every time. And if they don’t get worked up, I won’t waste my time with them. If prospects ask a lot of questions or tell me they want to think it over or talk with their lawyer, I will hang up the phone. Victims don’t ask a lot of questions; they answer a lot of questions. Victims don’t read paperwork; they wait for you to tell them what it says. Victims don’t look for why the offer is a scam; they look for why the offer will make them money. They want you to make them feel good so they can pull the trigger.

Next: How to avoid being scammed »

  • Your Comments

    • sharjeel

      awesome. Gave some good tips

    • Robin S

      I remember that TV spot because we were in the Kiosk business at the time and knew it had to be a scam because a decade ago, nobody wanted those things inside their place of business.

    • TQ

      I found the part where the scammer mentioned about men being perfect victims as they are more emotionally weak due to ego problems was pretty interesting.