The more things change....

A recent article at Asset Recovery Watch.com discussed psychological profiling of scammers who run Ponzi Schemes, as well as, a discussion about the victims. For anyone not aware, after the recent deluge of press about Bernie Madoff and some other recent high-profile schemes, a Ponzi Scheme is one in which the scammer uses recent invested funds to to keep earlier investors happy. The scheme requires aggressive continued scamming to keep new money coming in, as the scammer has spent or hidden much of the prior money, to keep paying the ususally high dividends/returns/rewards promised to everyone. Sometimes, in the case of the Florida scheme, the investment is in large scale real estate, which is never actually purchased or acquired.

The article talks about Greed but also talked about the "thrill' of the more average person or investor finally getting to share in the high rewards of the "other guy", the rich, or connected or those "wired-into" the deal. The etymology behind the term "Con Man" is that the confidence swindler gives you, the victim, his or her confidence. They "trust" you or share with you because they "believe in" you.

The Financial Industry Regulatory Authority, an industry watchdog group, profiled a typical victim of investment fraud. Their profile included people who are: highly educated, have higher incomes than non-victims, score higher on financial literacy tests, and are self-reliant preferring to act on their own knowledge rather than consult others.

In short, if it sounds too good or lucrative or unusually profitable to be true it probably is. If you are someone, on sober self-reflection, who fits the FIRA profile, you should also be smart enough to always go against impulse and consult professionals before ever committing significant funds with anyone.

Psst...Hey Buddy...have I got a deal for you...

If someone who happened to be pumping gas at the next gas island or standing in line behind you to buy movie tickets leaned over and asked for your Social Security Number or bank account number or your address, would you reply? Assuming your answer is no, then it is always good to remind ourselves that the convenience of the internet comes with anonymity. The next time anyone inquires of you over the internet for personal or private business information, ask yourself a couple of key questions:

1. Did this inquiry, transaction or dialogue begin via email? If so, did you initiate the email to a reputable website/company or did you respond to an email that may only appear to be legitimate. Will the person making the inquiry provide a telephone contact number to speak with someone in person? Can the telephone number be independently verified?

2. If speed or urgency, such as not to lose an "opportunity", is repeatedly stressed, examine the supposed basis for the urgency.

3. Your Mother, as they usually are, was right: "Don't take candy from strangers." If you do not know with whom you are dealing, find out first.

4. Have set and well defined rules in your practice as to which employees have access to private, personal and business information and to whom, under what circumstances, such information may be divulged. It is best practice to have a second contact person, CPA, attorney, practice consultant, for a staff person to contact if you are not available when responding to an inquiry.

For practical and valuable information regarding safety and security in the more physical sense, I strongly recommend you check out badguysatbay.blogspot.com where my friend Roger Walker, a residential and commercial security professional, blogs with advice and information.