The Art of the Steal (3 page)

One of the things that always amuses me is that back when I was on the other side of the law, it was harder to commit fraud than it is now. You’d think it would be the opposite. And five years from now, it will be easier than it is today. And that’s because of one word—technology. Technology breeds crime and it always has. Thirty-five years ago, if I had to make a check, I literally had to print the check, and so I had to be a skilled printer. I had to know how to do color separations, make negatives, and make plates. It was very time-consuming and tedious. Today, sitting at home in an apartment with a PC, a scanner, a color printer, and a color copier, you can reproduce just about any type of document, including hard cash.

So when people ask me, if I were a con artist today, what would be different? I tell them, “Instead of making $2.5 million, I’d make $20 million. It’s that much easier.”

And we look on white-collar crime a lot differently. China, many years ago, printed a warning on its currency that whoever forged counterfeit money would be beheaded. Until the early 1800s, forgery in England qualified as a hanging offense. Justice got a bit more civilized, but thirty-five years ago you at least got sent to prison. Today, I’d probably get probation or community service, and maybe have to make some restitution. That’s not deterrence, that’s encouragement.

It’s a dark, morally ambiguous world today, but one problem we have in our society is that people don’t really care if some big company was embezzled for $100,000. They figure that’s the company’s problem; they’ve got billions. Instead, people want to know what law enforcement is doing to clear the streets of murderers, rapists, drug dealers, and other violent criminals. People want them off the street, because they pose a physical threat. If you ask them about some guy selling counterfeit Gucci bags for twenty bucks down by the supermarket, their reaction is, “Well, I don’t care about that. If the purse looks good, I’ll buy one myself.” In addition to the cost of fraud, counterfeit goods are responsible for $350 billion in losses in the United States every year, but people don’t care about the problem because they think it doesn’t really affect them. What they don’t understand is that ultimately, it does affect them. It means we all pay higher fees for goods and services.

The police are frustrated. They complain that if they go out and arrest a check writer, then the district attorney doesn’t want to fool with the guy because it’s not a high profile case. The guy just wrote some bad checks. If they do prosecute him, the judge says the prison is full. He can’t put this check writer behind bars; he needs the cells for murderers and rapists, the really scary guys. Thus, something like 98 percent of forgers go free. Prosecutors have a benchmark. Rarely will they prosecute a fraud of less than five thousand dollars. So criminals know that if they stay under the benchmarks, they’re safe.

There’s no reason to rob a bank the old-fashioned way, with a mask, a gun, and a prayer. Why go and stick a gun in someone’s face? You’re talking about armed robbery, ten to twenty years. You could end up shooting someone. Someone could shoot you. And for what? The average bank robbery in 1998 and 1999 netted less than one thousand five hundred dollars. You’re a lot better off doing your robbing with the point of a pen. Why not walk in and cash a fraudulent check for twenty thousand dollars? Maybe you’d get six months in the county jail, if they caught you, if they prosecuted you, if they sent you to jail. And so the machinery of fraud functions almost untouched.

Another big difference is, thirty-five years ago you had to be a con man with a con man’s idiosyncratic personality. You had to be facile. You had to be persuasive, with good improvisational skills, and you needed icy self-control. You were taking something and replicating it, not perfectly, and you had to make someone believe it was the real thing, make them believe it sufficiently that they would cash it. Today, criminals can make a traveler’s check or counterfeit bill that is so good that it doesn’t take any acting skills to walk up to a teller and pass it off as the real thing. Someone who truly looks like a crook can get away with it.

Bear in mind, the person accepting counterfeit bills and forged checks these days is far less trained than in the past. Years ago, bank tellers were professional employees with months of training. Banks don’t want to pay benefits anymore, and so they don’t bother with full-time employees. They hire part-time help, and they don’t give them any more than the most superficial training. If a bank teller can’t tell the difference between a good hundred-dollar bill and a phony one, what hope is there for a hotel clerk or a sales clerk at the Gap?

Wherever I go, I find that security is pretty dreadful. Four years ago, I went to the Las Vegas Airport United Airlines ticket counter and was asked to show my driver’s license in order to pick up my ticket. In my haste to catch my plane, the ticket clerk forgot to return the license. When I got back to the Midwest, where I live, I went to the Driver’s License Bureau, told them that I had lost my license, and they issued me a new one on the spot. A week later, an envelope arrived from United with my license. Now I had two. Since I travel a lot, I kept the old one in my briefcase so it would be handy to display at airports. Soon, the old license expired, but, as an experiment, I kept offering it for identification to see if anyone would notice that it was no longer valid. For four years—at airports, banks, and stores—hundreds of salespeople and clerks have looked at that license. Not one has noticed that it was invalid. I’ve decided that as soon as just one person says to me, “This is no good, the license has expired,” I’ll throw it away. But no one has. Is there any wonder we have this mad frenzy of fraud?

KIDS TODAY

What bothers me a lot is, it used to be just the hardened criminal you had to worry about. Today it could be anyone. I’m not being politically correct, but I’m convinced that the main reason we have so much fraud today is because we live in an extremely unethical society. There’s been a sharp slippage in ethics that has inspired a culture of fraud. And so what you’re up against today is people who you’d consider trustworthy who have no ethics.

There are all these computer-savvy kids, many of whom are making twenty-dollar bills on their computers at home. They’re scanning them in and printing them on their ink jet printers and taking them to the convenience store or the school cafeteria and spending them. This happens all the time because they think it’s okay to do it.

We live in a society that doesn’t teach ethics at home. We live in a society that doesn’t teach ethics in school, because teachers would be accused of teaching morality. We live in a society where you can’t even find a four-year college course on ethics, and if you could find one, they’d be talking about ethics three hundred years ago that have no relevance to ethics in the business world today.

I don’t know anything that shows it better than
Who’s Who Among American High School Students.
For more than thirty years, the organization has gone out and selected sixteen thousand high school students to be honored each year in their publication. In order to be accepted, a student had to have maintained a 4.0 average through the tenth, eleventh, and twelfth grade. Once accepted, a student has to fill out a form and answer five questions. I’ve always been interested in question No. 3, and I’ve followed the results for twenty years, because they’ve changed dramatically. The question asks, During the last three years of high school, did you steal, cheat, lie, copy, or plagiarize? In the latest survey, more than 80 percent of the students said that they did. Like it was okay.

I believe we should be teaching ethics as early as maybe fifth grade, but we’re not doing it. Not long ago, I visited two major pharmaceutical companies. Abbott Laboratories and Glaxo Wellcome, and both of them told me that they had brought ethics training in house. They established their own ethical standards, and they require their employees to go through training. They’ve had to create their own code of conduct, because it’s not being done at home.

When I talk to people about con artists, they always ask me, well, is there a certain type of person to beware of? It’s been my experience, on both sides of the law, that there is no profile of who’s a con artist or forger. I’ve seen men who were eighty years old and women in their teens commit the same types of fraud. There may be a profile for bombers or serial killers, but not for the confidence man. Most of the time, it’s the people you least expect who steal from you. Of all the calls I get from corporate managers lamenting that an employee stole from them, it’s never, “Well, I had this person and six months later I found out he was embezzling from me.” Instead, it’s always, “This man worked for me for twenty years. He was a saint. I trusted him like my brother. I can’t believe he stole from me.” It’s far more often the long-term employee than the newly-hired one who steals from you. In the world of the con, the unexpected becomes the expected.

AN OUNCE OF PREVENTION

As easy as these crimes are to commit, I firmly believe that most of them are easily prevented. Banks and companies simply have to learn to secure their systems as best they can. And you have to be a very smart consumer today.

I travel all over the world talking about fraud, and one of the interesting things is that in Europe or Australia, even in Canada, the societies are very proactive. Americans are very reactive. A guy in Britain, for instance, will say, “This check? We could use this check, but then somebody might do this or might do that, so let’s fix it so he can’t do that.” In the U.S., the attitude is, “We’ll use this. If we have a problem, we’ll fix it.” They worry about it later on. In fact, 90 percent of those who hire me to design secure documents, they’ve only hired me because somebody counterfeited their documents. No company has ever called me in to design their check ahead of a problem. It’s always, “Somebody really got to us for a ton of money, and we don’t want that to happen again.”

It’s much better to avoid becoming a victim than trying to figure out how to get your money back once you become a victim. Once you’re a victim, you won’t get your money back. Everyone has to start being proactive. You have to ask yourself every time you go on the Internet, which is probably every day, what information am I putting out there, and how could someone use that information? The crime of the future is identity theft, when some stranger acquires enough of the basic information about you that, when it comes to buying things on credit and making withdrawals from the bank, he in effect becomes you. It’s already the fastest-growing crime in America, as criminals assume other people’s identity in disturbing numbers. That’s what happened to Michelle Brown, whose ordeal I’ll return to in the final chapter.

In the following chapters, I plan to take you into the world of the confidence man. I’m going to tell you about some of the most ingenious scams that I’ve encountered during my twenty-five years as a fraud specialist. I’ll tell you how to spot a bogus check and how to recognize a counterfeit bill. I’ll tell you why a piece of Scotch tape can make a check worth a lot more, and why you shouldn’t write your grocery list on a deposit slip. I’ll tell you about how a man made a considerable amount of money off supposedly broken windows, and why criminals iron credit cards. I’ll tell you about the mustard squirter and the rock in the box, about the Vickers Gang and their long-running refund scam, about how to earn $100,000 from a demolished car, and why a thief brings glue with him to the ATM. This is all for the purpose of teaching you how to avoid becoming a victim of fraud. For I strongly believe that punishment for fraud and recovery of stolen funds is so rare today that prevention is the only viable course of action.

Above all, the thing to remember is that nothing is foolproof. Every form of payment has an inherent risk in it. Every system has a flaw. Every system has been designed by a man or woman, and that means a man or woman can defeat it. Sherlock Holmes said it best: “What one invents, one will discover.” And, you can be sure a man or woman will defeat it. I can only laugh when someone says to me that this electronic system is foolproof, you can’t beat it. That’s a ridiculous statement. Someone had to create it, so obviously someone can defeat it.