A Pause to Review

I am pleased to note that folks from a dozen diverse nations have read my comments. It is my hope that my experiences and those of you willing to share yours will save many the expense, grief, and heartache brought on because of people stealing their  assets, often at the point of a flower!

Over the course of the last two weeks we have discussed but a few forms of the many scams being perpetrated on unsuspecting victims. Now, we'll take a while to discuss some of them in greater detail.  Please know that you are welcome to contact me with your experiences. My email  address is skyline.assets@gmail.com.

The advancement of Internet technology has, as one author has declared," made the world flat"! If you haven't read it, you may find his book enjoyable.  The book is pretty thick, but discusses  "Globalization" in a way that makes sense well beyond just politics and markets of computers and retail merchandise.  Thomas L. Friedman, foreign affairs columnist for The New York Times and author of the 2005 book The World Is Flat: A Brief History of the Twenty-First Century  You really have no way of knowing  with whom you are dealing, or where in this "Flat World" they are - Bangalore, India, Baldwin Park, California, Lagos, Nigeria, or Accra, Ghana!

We also must understand that not all fraud happens on the Internet. The concepts of practicing DUE DILIGENCE and using COMMON SENSE need to come to play even in "face-to-face" dealings. This does not mean we must distrust everyone. President Ronald Reagan made famous a Russian proverb, which translate as "Trust but verify".

I mentioned previously that I had actually worked for a couple of scam operation. In both instances, I was unaware at the time of employment the dishonesty involved. One was well before the Internet (1977)...it was a licensed real estate and investment brokerage, and I did his property management. As I became aware of his lack of integrity, I quit his company before he bankrupted it, absconding with several million dollars in investor funds. Then I became aware that he had moved to another state and was establishing his next gig. I happened to know someone in that state's Attorney General's office.  It's nice when you can actually see that you can make a difference!  I doubt he even had a clue who "ratted him out"!  This is often called Affinity Fraud. 

The U.S. Securities and Exchange Commission defines affinity fraud as follows:

Affinity fraud refers to investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are — or pretend to be — members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster's ruse.

These scams exploit the trust and friendship that exist in groups of people who have something in common. Because of the tight-knit structure of many groups, it can be difficult for regulators or law enforcement officials to detect an affinity scam. Victims often fail to notify authorities or pursue their legal remedies, and instead try to work things out within the group. This is particularly true where the fraudsters have used respected community or religious leaders to convince others to join the investment.

The other was a web based customer support call center where 99% of our callers were just discovering recurring charges to their credit cards (sometime two or three years worth), which they knew nothing about. The federal government eventually charged the owner with over $280 million in fraudulent transaction. My comment the day we were all laid off was "Thank you". I could feel the scam, in spite of the assurance of our leadership.

Sadly, in both of these instances, the head honcho focused his recruiting of staff from a strongly respected religious community of believers. It builds their credibility. In the real estate office all his key players were strong devout members of the same faith, usually different congregations. Most of his clientele shared the same commonality, as well.

The call center owner was a major employer in a rural town, employing 200 customer service agents. He owned a helicopter and often used it to support Sherriff search and rescue missions, even flying supplies and staff to Haiti once to aid in their rescue after a hurricane.

 So, in almost all cases - "Trust but verify".