The Art of the Steal (10 page)

I served as a consultant to the 2000 Summer Olympics in Sydney, which, from my perspective, I envisioned as a possible gala fraud festival. Before I even got on a plane to go there, I realized that there were bound to be millions of dollars in losses from various cons at the games. At the Atlanta games, traveler’s check fraud alone totaled more than $4 million, and there had been enough improvements in technology during the four ensuing years to make life easier for criminals.

I knew Australia was receptive to fraud. I had heard that there were something like three million more federal tax ID numbers issued in the country than there were actual Australians, which is not a promising sign. Plenty of counterfeit money was bound to be put into circulation—not the Australian currency, but American bills. Forgers don’t do the local currency, because people are familiar with it. American bills were ideal, because newly-designed five-dollar and ten-dollar bills had just been released the month of the Olympics. Even Americans weren’t familiar with them. When I visited the major Australian banks, they already had plenty of samples of fake bills that had crossed their teller windows.

At any event where there are limited tickets for which there is great demand, bogus tickets are always a nettlesome problem. I advised the organizers of the Olympics to use Australian printers to print the tickets for the games, because my experience has been that Australia has some of the best printers of secure documents in the world. In fact, I have all of my corporate checks and personal checks, even my business cards, printed in Australia. The printers there are not only good at making documents secure, but they’re true craftsmen.

For whatever reason, the organizers of the games didn’t follow my advice, and the contracts were given to a small company in Arkansas and another one in England. I thought that was an unwise decision. Even if those printers did a stellar job, there was all the handling of the tickets from America and England to Australia that presented opportunities for fraud.

WHAT TO DO

Since you can’t expect ticket holders to differentiate between genuine and counterfeit tickets, electronic verification systems are necessary at the entry points to big events. As an added precaution, ticket holders should always carry their receipts with them in case someone turns up in their seat with a fraudulent ticket. And I tell people to be wary of anyone who offers to sell tickets for less than their true value; it’s usually a sign that they’re fake.

Because I’m always interested in how prepared people are for con artists, I went around with a reporter to some of the shops in Australia. We dropped in on a clothing store, and the reporter asked the clerk, “If someone came in here and wanted to buy a sweater and all they had was a hundred-dollar American bill, would you take it?”

“Oh, no,” the clerk said, “I’d tell him to go to the currency exchange and bring back Australian money.”

Satisfied that the man was on the alert, the reporter was ready to leave, but I wanted to rephrase the question. I asked the clerk, “Suppose someone came in and said, ’Gee, I really like that sweater. I see it’s the equivalent of seventy-five American dollars. Listen, I’m in a big rush and I don’t have time to get change. Why don’t you take this hundred-dollar bill, and we’ll call it even.’ What would you do?”

“I’d take it in a minute,” he said.

He would have sold a sweater for nothing. And the con man would have gotten a sweater for a bill that probably cost him ten cents in paper. See, the con man knows that the clerk wouldn’t take the money. And he knows how to exploit human nature and go to the next step. That’s why you can never let your guard down.

And the tricks never cease. A couple of years ago, I was hired by Go Transit in Toronto, the metropolitan transit agency, because they were being hindered by ticket fraud on their buses and trains. The ticket they used was a thick piece of paper, with the same fare information printed on both sides. Kids were taking tickets home and putting them in the freezer overnight. When they took them out, the paper was split perfectly in two. Most paper will split when frozen. So they now had two tickets. Go Transit was losing something like a couple of million dollars a year from the scam. I redesigned the ticket using a special paper that won’t split, making for a lot of grumpy kids who had to start paying the full fare again.

MY DENTIST FOR LIFE

There’s nothing that you can look at today and be certain that it’s real. And that opens a lot of doors. Interested in getting some drugs? That’s not a problem. You put on a nice suit and go down to a dental office in a wealthy part of town at eight forty-five in the morning and tap on the glass. “Excuse me,” you say, “I woke up this morning with this abscessed molar. I’m in serious pain.”

The receptionist asks if you’re a patient. “No,” you say. “I just moved to town, but everyone told me he’s a great dentist and if I can slip in this morning and see him, he’s my dentist for life.” The receptionist checks with the dentist, and comes back and tells you that he’s booked up solid, but he’ll stay late and squeeze you in at the end of the day. He’s sympathetic to your anguish, she says, so he’s given you a prescription for a painkiller. You take the prescription, make fifty copies of it, go to fifty pharmacies, and you’ve got fifty bottles of painkillers to sell on the street.

For a new college graduate to get a good job, or to get into a top-notch graduate school, he needs the best transcript possible. But if his actual transcript doesn’t quite pass muster, that’s easy enough to rectify. He scans his transcript into his computer and, in a revisionist touch, improves his 3.0 grade point average to a perfect 4.0. Many employers and graduate schools require applicants to send in their transcripts through the registrar’s office, but that’s fine. You simply call your university and ask them to mail you a university application. When you get the material, which comes with a nice letter from the registrar, you scan the university’s logo, letterhead, registrar’s envelope and signature, and mail it off. One thief had the nerve to put a counterfeit degree and transcript from the University of South Florida up for auction on eBay. He offered it for fifty dollars. Seventeen bids later, it went for $356.

Here’s another clever idea made possible by new technology. Crooks today can go to a junkyard and find a late-model Lincoln Continental that had been totaled in an accident and buy it for one thousand dollars. The car is such a wreck that they can’t even drive it, so they tow it to their home. They say, “Why don’t we go down to the credit union and get a loan against the car? They’d give us twenty thousand dollars on it easily. We give them the car title for collateral, they give us the loan. The car title doesn’t say the car is a wreck [only recently have some states started issuing different titles for damaged cars]. A week later, we’ll default on the loan. We’ll go to another credit union and get another twenty thousand dollars. Then we go to another, and another. In just a few trips, we’re out of here with one hundred thousand dollars from a car that won’t go around the corner.” One of the crooks might wonder, “But how could we get another loan when we gave the first credit union the car title?” And one of the others will reply, “I didn’t say give them
the
car title, but give them
a
car title, a copy that we make.”

Five years ago, that was impossible to do, because in all fifty states car titles had to be intaglio engraved. In order to reproduce the engraving, it would take at least a half million dollars in equipment and considerable skill. Today, with a digital copier, I just place the car title on the machine, put a piece of paper in the cassette, and make a copy. I pick up the copy, put it back into the cassette, make another copy, and then another and another. Each time I make a copy I’m building up toner over toner over toner over toner. After the fifth copy, I have the exact raised lettering, the exact engraving, the exact seal of the original. And that’s why con artists regularly pull off precisely the scam I described above.

MALL MADNESS

You go to the mall nowadays, and invariably, some guy will ask you, “You want to buy a gift certificate for the mall?” So you take one for two hundred dollars. He asks you what name to put on it. You tell him that you don’t know who you’re going to give it to, just leave it blank. You go home, type in a name, make fifty color copies at the local copy shop, and return to the mall. Companies that issue gift certificates vastly underestimate the quality of color copiers. Most gift certificates can be copied without a single telltale sign. In fact, in many cases the color copies actually look sharper and brighter than the originals.

These new mall gift certificates are wonderful, because they’re honored at virtually any store in a mall, as well as any store in other malls handled by the same management company. This is a great consumer benefit, and a great criminal benefit. A criminal will go to a mall in Miami, buy a gift certificate, make a hundred copies, and spend that same gift certificate in New York, Los Angeles, Atlanta, and fifty other malls around the country. What a terrific way to travel during the holidays!

During the Christmas rush period, harried and inexperienced sales clerks haven’t a prayer. So you take your $200 gift certificate to the Gap, buy some $50 jeans, and get the $150 change in cash. You go to the frame shop, buy a $28 frame, get the change in cash. One of the things criminals love about gift certificates is they’re as good as cash. Most stores are happy to give cash when making change after a purchase. And since many companies reconcile their gift certificates only on a sixty-to-ninety-day cycle, criminals have plenty of time to complete their holiday shopping.

The security people at the malls call me all the time and say, “Hey, the mall’s getting killed. Thieves are hitting us with all these color-copied gift certificates.”

I tell them, “You have to put out a bulletin to all your store managers about the names on the gift certificates.”

“Uh, we don’t put names on them.”

“Well, you need to send a bulletin out about the serial number of the gift certificates,” I say.

“Uh, we don’t put numbers on them.”

“Well then, you need to tell me where you’re calling from so I can come and buy some of those gift certificates.”

Remember, if they have value, they’ll copy them.

SHOP ’TIL YOU DROP

Con artists have a particular fondness for store receipts. They’re a living in themselves. I was once visiting with the head of security for one of the big discount chains, and he was telling me how incredibly secure his stores were with all their cameras and gadgetry. “Really,” I said. “Well, let’s see.” I walked with him outside the store entrance, rooted around in the trash receptacle there, and fished out a receipt. Customers are constantly throwing away their receipts as soon as they leave a store. I examined the receipt and noticed it included a toaster oven. So I went with the security head to the small appliance area and picked out the same model toaster oven. I told the security director, “Now all I have to do is go to customer service, tell them I just bought this and need to return it, and I’ve just conned the store.”

Criminals aren’t content to just go with what they find in the garbage, and so naturally they make their own fraudulent receipts. Several years ago, Macy’s had a nagging problem with criminals. Armed with fraudulent receipts, the criminals went to the store, picked out the items they had listed on the fake receipts, and then returned them for cash. The clerks at Macy’s had no way of distinguishing a real receipt from a counterfeit one. I was brought in and redid the receipt by adding “Macy’s” on the back in thermochromic ink. Rub your finger over the word and the body heat causes it to disappear. Macy’s trains all of its help to check receipts with their fingers, and the problem has been cured.

A few years ago, there was a guy who drove all over the country in a white Cadillac who had his own inventive scam. One of the big store chains would regularly put its fine jewelry on sale for 50 percent off. This guy would anticipate these sales and go in and buy a necklace or bracelet at full price. The chain had an arrangement where, if you had bought an item of jewelry just prior to the sale, you could come in with your receipt and it would give you the difference back in cash. First, he would take his receipt to a local copy shop and make two hundred copies. Then he’d return the necklace and hit the road. Whenever he encountered another store in that chain, he would bring in one of his fraudulent receipts and get a refund of half the price. He didn’t need to show the necklace, just the receipt. He did this for years. He’d park his Cadillac illegally in the fire lane outside a store, dash in, collect his cash, and head to the next store. Eventually, the chain figured out how to stop him. It ceased offering the cash-back arrangement.

Some of the techniques used to fleece businesses are surprisingly simple, but they can be raised to the level of art by rings of criminals. If I had to anoint the King of the Receipt Scam, it would be Rondal Vickers. Vickers is a sixty-two-year-old Florida man, and an Air Force veteran with a generous white beard. He goes by the name Santa Claus. It’s an unlikely nickname, since he was the ringleader of a crime group composed of as many as twenty thieves known as the Vickers Gang. For more than thirty years, it carried out an elaborate refund scam that was reliant on counterfeit receipts and UPC labels. (In their spare time, the gang indulged in gift certificate fraud and insurance fraud, once collecting insurance claims six times on the same Corvette.)

Santa Claus pretty much had theft in his blood. He got started as a checkout cashier at a Winn-Dixie and augmented his paycheck by never ringing up purchases of beer. Whenever someone had beer mixed in with his groceries, he would pretend to have forgotten to ring it up, hit “no sale” on the register, and then ask for the amount, which he pocketed. From that beginning, he built a formidable organization. One of the masterminds was a fifteen-year-old runaway named Jodi Vickers, who became Santa Claus’ wife. The gang traveled all over the country, generally in “sprees” lasting six to eight weeks, and then they would return to their home base in Florida until they needed to steal some more money. They preyed on the national mass-market retail chains like Wal-Mart, Kmart, and Target. Santa Claus was particularly fond of Target, because it kept enhancing its security in order to foil him. To feed his ego, he relished the challenge of beating the toughest system, so he’d often send his soldiers to the other chains and devote his own devilish energies to Target.