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 in Reader's Digest Magazine November 2013

If I were still in the scam business, I would focus on reverse mortgages and precious metals. Home-equity and reverse-mortgage swindles are attractive now because a lot of seniors have paid off their homes, and that’s like an untapped bank account. If your home is worth $300,000, and you’ve paid off your mortgage, you have $300,000 sitting in the bank, waiting for me to steal it. A lot of TV and direct mail advertising tells you how to get money out of your house while you are still living in it. Some of these ads are legitimate; many are not.

My mom asked me once how her friends could avoid these schemes. I told her two things. First, if someone is pitching a deal, ask yourself, What’s in it for him? A common ploy is to get you to take out a loan on your house and then invest the proceeds in a long-term annuity or some other investment in which the salesman makes a huge commission. It may not be a fraud, but it may be a lot better deal for the salesman than for you. Second, I told Mom that when it comes to your house, never sign any paperwork until your attorney—someone you choose, not someone the salesman refers you to—reads the fine print.

As for gold and silver scams, we would sell gold coins at a 300 to 500 percent markup. So the victims would pay $25,000 for a bunch of coins, which they would receive, but years later, they would take them to a coin shop and learn they were worth only a few thousand dollars. This is a great hustle, because the coin industry is largely unregulated. Plus, because the victims receive the coins, they don’t realize until years later that they’ve been taken. With the bad economy, these scams are huge now.

All those years I ripped people off, I knew it was wrong. But I was making so much money, I didn’t care. It wasn’t until those agents busted into my office in Miami that it finally hit me: What I was doing was really bad. I pleaded guilty and went to prison. I had a lot of time to think about my crimes. When I got out, I promised my mother I would never go back to my old ways. It wasn’t easy. The first year out of prison, I was asked almost daily to work as a closer for the latest scam. Finally, I changed my phone number so I wouldn’t be tempted.

In 2009, I spoke at a Washington, D.C., fraud-prevention conference sponsored by the Federal Trade Commission. Since then, I’ve been working on the other side of the scam business: I gave a couple of television interviews and even did some role-playing with fraud fighters from the AARP fraud fighter call center.

Today I am 45 years old, and I live with my parents. I owe the federal government almost a million dollars in restitution that I don’t have a prayer of paying back. Thanks to years of smoking and drug abuse, I have acute emphysema, and I carry around an oxygen tank. I’m on the waiting list for a double lung transplant, but the clock is running out. Can you spell karma?

People sometimes ask me about remorse. I do understand that innocent people got hurt as a result of my actions. I think about my victims. I pray for my victims. And even though I have spent the past four years trying to help people avoid monsters like me, I wonder if it has been enough.

Become more interesting every week!

Get our Read Up newsletter

Sending Message
how we use your e-mail

Your Comments

blog comments powered by Disqus