Thursday, December 1, 2011

Pigeon Drop Confidence Game

Confidence games, also known as a confidence trick, are scams that occur within our communities that attempts to defraud an individual by earning their confidence. The term con in the phrase con artist is short for the word confidence; a confidence artist earns the trust of an individual before defrauding him/her. Con artist, whether we want to admit it or not, are professionals who could earn as little as one dollar to billions of dollars targeting individuals with greedy characteristics. How can a con artist make a billion dollars? To answer that question we could travel to the Federal Correctional Complex in Butner, North Carolina and ask Bernie Madoff himself. Confidence games are truly an everyday occurrence and it not only occurs within big organizations, but it occurs in the streets or areas where people interact with one another. Some confidence games may be of interest in discussing, but one in particular that has been around for 100 years is the Pigeon Drop.

The Pigeon Drop confidence game is a scam that occurs in the streets and usually involves two suspects and a victim. The idea behind this scam is that the con artists (suspects) target and persuade an individual to give up a small portion of their money for a greater gain. It is a case of “you give me 5 dollars and in return, I will give you 20 dollars.” Some of us may think that the idea behind this scam would never work for an individual with common sense, and perhaps we may be right to some extent. However, as I mentioned before, con artists are professionals and the skills that they possess pertain to the ability to lie, cheat and steal using rhetoric methods. In other words, they have the personality or skill to gain a connection with an individual and persuade them to go along with their deceitful plan. Generally, it goes back to whether an individual is greedy. An individual may have all the intellect in the world; however, greed can easily blind an individual and make him/her lose sight of the bigger picture.

How does a Pigeon Drop work? The two suspects are split into two roles; the first suspect plays the role of the inside man and the second suspect as the outside man. The objective of the inside man is to find and establish a connection with an individual (victim) in the street. For example, one way the inside man may accomplish this is by acting as a tourist looking for directions. Once the inside man has found his victim, he would engage him/her in a conversation long enough for the outside man to get involved. The objective of the outside man is to walk behind the victim and pretend to have found a wallet. The outside man would then ask the inside man and the victim if the wallet belongs to them; the wallet is actually part of the set-up and consists of the suspects’ money. Both the victim and the inside man would say that the wallet is not theirs. The outside man would then open the wallet and reveal a large sum of cash to both the victim and the suspect’s partner. He would take the cash out, reveal the large amount of cash, and count it in front of them. In this scenario, let’s say that the amount of cash in the wallet is $3000. The outside man would then tell them that they should split the money amongst themselves. Before distributing the money however, the inside man would act as a good Samaritan and tell his partner in crime to go to the nearest building to see if anyone had reported a wallet missing. To gain the confidence of the victim, the inside man takes the money and puts it in an envelope to insure that the outside man doesn’t just flee with the money. While the victim is distracted, the inside man swaps the envelope with another envelope containing magazine cut outs the size of dollar bills. Before the outside man goes to the building to check if anyone reported a wallet missing, he asks both the victim and his partner for some money as a form of collateral. That way, when he came back and they were both gone, he would have at least gained some profit from this event. After a while goes by and the outside man has yet to come back, the inside man would then tell the victim that he is going to go check on him. He gives the envelope (the one containing the magazine paper) to the victim and goes out searching for him: they are never seen again.

An article from ABC Action News discusses an incident where a widow of 74-years of age was scammed out of $2,800 through a Pigeon Drop confidence game (Chodun). A woman using a fake identity approached the old widow with a bag containing a large portion of money and asked her if it belonged to her. To make the story short, the woman had asked the widow that she would have to come out with her own money before splitting the money in the bag. Surely enough, the widow withdrew money, and the woman (con artist) gave her the “money” in a locked pouch and told her that she would call her when she arrived home to reveal the lock combination. Time went by and the woman never called. The widow’s daughter opened the bag with a knife only to discover that there was nothing but paper scraps. (Chodan).

The Pigeon Drop confidence game is only effective against greedy personalities. If it is too good to be true, than it most likely is not true. I have learned throughout my research of different types of fraudulent schemes and scams, that most of the cases involves the concept of “too good to be true.” It appears that the victim loses sight of the truth when they are blinded by greed. People who are greedy are never satisfied with what they have and instead they go out looking for the quickest way to get rich. When observing con artists, we are able to determine that their motivation for ripping people off is derived from greed. Con artists, in a sense, have greedy characteristics. Look at Bernie Madoff for example. Not satisfied with the millions of dollars he already had, he decided to push his limits by wanting billions of dollars. With our current situation involving the economy, society is more vulnerable to con artists and confidence games. People are desperate for more money and they are either the ones losing the money or the ones committing the crime. Defrauding or scamming an individual is a crime and we have to treat it seriously. I suppose defrauding an individual is better than having some maniac with a gun robbing a store, but the effects can be just as dangerous in terms of mental health. We need money to survive in this society, and when all or most of the money is taken away from us, we begin to develop a stressful environment for ourselves. Victims of these crimes learn from their mistakes, but at what cost? The best way to eliminate this problem is to educate people about the different types of scams. Prevention is always the key to eliminating the problem. We never know what we have until it is all gone. Unfortunately, that is the lesson people learn when they become victims of a scam.





  1. Criminal Investigation, Charles R. Swanson et al., McGraw-Hill, 10th Edition.

Friday, November 11, 2011

Bernie Madoff and Ponzi Schemes

 Many people who follow the news should be somewhat aware of who Bernie Madoff is. If not, let me briefly describe who Bernie Madoff is. Madoff is one of the most infamous businessman who about two years ago was sentenced to serve 150 years in a federal prison and pay up to $170 billion of restitution for ripping off hundreds of people and several well known companies. He used the money that he gained for his personal lifestyle, which included buying luxury items including four houses, six boats, four cars, and other expensive “necessities ”. (Clark, 2011)

Bernie Madoff was top of the crop when we talk about con artists. This low life scum, yes I said scum, is part of the reason why this society is corrupt. Madoff is the kind of man who does not lose sleep over his blatant criminal activity, as long as he is living the dream with other people’s money. In some sense, I would rate Madoff’s crimes just as equal to those individuals who had committed rape, robbery, aggravated assault and murder simply because of the effects he had caused to his victims. Although the effects of his crime were not as physically harmful to the victim as rape, robbery, aggravated assault and murder would have been, Madoff managed to hurt his victims mentally, maybe some more than others. According to an article in The Guardian, How did Bernie Madoff’s victims fall for his $65bn scam?, at least two suicides had been linked to his crimes (Clark, 2011).

When I talked about my experience and how I was almost scammed, I briefly mentioned how I was mentally harmed in terms of being overwhelmed by stress and depression. I was mentally hurt over a $1000 laptop that I had almost lost. Imagine the effects of Bernie Madoff’s victims when they discovered that Madoff had made off with their money. We are not talking about a 1000-dollar laptop; we are talking about millions of dollars including savings that people had entrusted to Bernie Madoff! It is unfortunate that there isn’t a much harder sentence for people like Madoff. Personally I think, considering the context of his crime, he will probably be released on parole due to the prison overcrowding we are facing in this country. There is no punishment that would bring justice to the victims or society when we consider Madoff’s crime. The fact that he will die before serving all 150 years is appalling. He is already in his 70’s and I cannot see how or when he will begin paying restitution considering that he does not have access to that kind of money and is currently serving time in a federal prison.

So what kind of scam did Bernie Madoff do? Bernie Madoff will go down in history for having committed the one of the biggest Ponzi schemes in the United States. A Ponzi scheme is not complicated to define but complicated to understand. The best way to understand how a Ponzi scheme works is by a scenario demonstration. Imagine an individual whose name is John. John has in his possession 10 dollars. John wants to invest his 10 dollars; therefore, he goes to what he thinks is a qualified investor (Bernie). Bernie promises the individual that if he invested his 10 dollars with him that he would give him back 15 dollars, a profit of 5 dollars. When John is ready for his money, Bernie gives him back 15 dollars just as he had promised John. In reality, Bernie is not a qualified investor but instead, a Ponzi schemer. John, satisfied with his investment, decides to tell his friends Curly, Larry and Moe about his 5 dollar gain. Curly, Larry and Moe go to Bernie with their 10 dollars. After time passes by, Bernie once again delivers and Curly, Larry and Moe each gain a profit of 5 dollars.

How is this a scam if these individuals are gaining a profit from their investments? The secret behind Ponzi Schemes is that behind closed doors, is a redistribution of money. There is no real investment occurring; instead, the Ponzi schemer takes money from new investors and uses it to pay off old investors. In other words, the money between old and new investors is shifted. The shifting of money creates a cycle of redistribution until finally the system collapses and can no longer be sustained due to the lack of new investors. The Ponzi scheme only works by attaining new investors. Without new investors, the Ponzi schemer can no longer pay for the old investors and therefore the scheme collapses. Many people fall for this type of scam because the Ponzi schemer gains a good reputation with investors receiving a gain. Bernie Madoff was able to pull this off because of his reputation. Bernie Madoff’s run eventually came to an end after he became exposed to the FBI. According to the Associated Press (2008), there are three ways that a Ponzi scheme comes to an end. 1. The schemers vanish along with the funds. 2. The system collapses due to the lack of new investors. 3. The schemer is exposed.

Monday, October 24, 2011

Nigerian 419

I have a big interest in Nigerian scams largely on the bases of what happened to me several years ago when I was deceived by a Nigerian individual. However I was fortunate to come out on top after last minute attempts to recover an item that was almost handed over to this individual. After this experience, I had done several searches on Google and YouTube and was astonished to discover many stories of people losing out of thousands of dollars all because they thought they would receive more money.

Nigerian scams are sometimes referred to as “Nigerian 419 scams.” The name is derived from section 4-1-9 of the Nigerian penal code which relate to fraudulent schemes. The Nigerian scams typically occur through the internet and sometimes by personal contact by letter or by phone. The scammers begin by targeting vulnerable individuals: businessman, sellers, widows, single woman, and retired individuals. Widows are generally targeted over the possibility that they received a large sum of inheritance or life insurance from their dead spouse. The scam usually begins with a letter to the target about an investment opportunity. I wish I can list all the stories that these people come up with, but it would take me weeks to write. Basically, the scammer tells the target a phony story about an investment that may sound rather convincing but too good to be true.

In one case, a woman was ripped off $400 thousand dollars after she had received an e-mail from an anonymous individual claiming that her grandfather had left her $20 million dollars (Katu News, 2008). According to the article (2008), the woman’s family had last contact with their grandfather several years prior. The woman believed the e-mail to be legit after the mentioning of her grandfather by name. Although not stated in the article, the sender acted as a banker or government official telling her phony stories about how President George Bush and the Director of the FBI, Robert Mueller, were in on the deal. She received fake documents from the Bank of Nigeria and the United Nations guaranteeing her money. The sender had told the woman that if she sent $8,300 the $20 million dollars would jump to $26 million. Of course, she sent the money. The woman was sent fake letters from the President of Nigeria and the United States telling her that if she did not keep sending funds that the terrorist would get hold of the money. She was very persistent, and over the course of 2 years she had sent up to $400 thousand dollars hoping that she would be rewarded with millions of dollars. Over the course of two years, she had emptied her husband’s retirement account, mortgaged her house and sold the family car. Even after the numerous pleas from family and friends to stop sending money because it was all a scam, the woman persisted on sending more and more money. In the end of this event, the woman walked away with debt.

The story demonstrated the most common form of Nigerian Scam known as Advance-Fee Fraud. Basically, the scammer asks for an advance fee in exchange for millions of dollars. This type of scam will test an individual’s intelligence and their levels of greed. In the article for example, the woman was known to be someone of intelligence, however this event proved otherwise. She was a registered nurse and a reverend who taught CPR and married people. According to the article, she also knew “lightning-fast” sign language (Katu News, 2008). She may have been book smart intelligence, but as for common sense goes, she had none. Her level of greed was just about par with Bernie Madoff, minus the prison and the money of course. It is astonishing what greed can do to an individual. In this case, greed blinded the woman from seeing the truth and the obvious. She was so anxious in making millions, that she did not see what was really going on. Two years she sent money and yet over the course, she received nothing. Ignorance and greed do not mix well, in fact, it usually destroys reputations.

Another type of Nigerian scam that I find intriguing is one performed on dating websites. Dating websites? Really? Yes, dating websites. What can a scammer hope to gain from a dating website? Love of course! But the love they are looking for is not that of a woman, but that of what a single woman may have, and that is money. Although it pains me to say this, Nigerian scammers have a vivid imagination. How they hope to gain money from a dating website was beyond me at first. However, I discovered a video about a woman who was scammed out of $24,000 thousand dollars by a Nigerian posing as an attractive white male British engineer who was currently working in West Africa. In this video, an Australian woman, meets a male scammer pretending to be a British white man. Over a period of time, the scammer actively communicates with the woman through e-mail and personal phone calls. He even sends her a picture of “himself” as a way to gain her trust. He tells her that his name is James Jonathan David and they begin an intimate relationship through the internet. After two and a half weeks of “dating,” the man told the woman that he needed money for legal and medical bills. We may guess what happens from here. Yes, that’s right, she sends him the money. A woman who was only looking for love ended up becoming financially and emotionally broken.

Nigerian scammers are like an industry in Nigeria. They are made up of professional con artists who go after the greedy and the vulnerable. The stories above demonstrate that greed and other mental factors like love, can blind someone’s ability to see the truth. The scammers know this, and they find unusual ways to sucker someone out of thousands if not millions of dollars. In this or any economy, it is a blow for the victim and a success for the con artists.

Wednesday, October 5, 2011

Nigerian Scammer vs E-Bay vs Me

I remember three years I bought my laptop online through one of the most prestigious computer manufacturers called Alienware. At that time, I was a big computer gamer and I spent a good amount of time playing the Call of Duty franchise series. I bought an expensive laptop not only so that I can play games, but because I also needed one for school. A few weeks after my laptop arrived, I discovered that the laptop was not what I expected it to be, and I decided to sell it using e-bay.

I was new to this buying and selling crap that occurs in e-bay; therefore, I was ignorant on the way things operated. I was desperate to sell my laptop and get back the money I spent to obtain it. I figured that many people sell items on e-bay and that any idiot can do it. Well, that idiot happened to be me. I spent over $1,200 for that laptop and started the bid at $900. In the first couple of hours, I received messages via e-bay and many people were interested in my computer. However, one message caught my attention. It read:
I was just looking at your auction and have a few questions. Do you have a working paypal account? What is the maximum amount you are willing to take? Please be reasonable I am very interested and can pay ASAP.Kindly,including your personal email to talk better.Thanks

I responded to this individual and gave him my e-mail address so that we can “communicate” better. I told him that that I could sell it for him at $1,200 plus shipping. A few hours later, I received an e-mail from the same individual who contacted me in e-bay.

            Hope everything is good there with you. as for me my day is splendid,thanks for the quick response,your prefered price is okay and i will be buying it for $1500 including shipping via USPS/EMS,As a matter of fact I wanted to buy your item for my son, who schooling in West Africa,he need it urgently for his final project,which i'll make your payment via PayPal and shipment will take place upon confirmation of my payment.I am willing to place a bid but i am resolving an authorize access issue with my account which has caused a Temporary Bidding inability.Waiting for your reply with your FULL NAME AND PAYPAL EMAIL ID,so i could make the payment ASAP.Thanks alot.”

I was astonished that he was willing to pay more than what I was asking for. Blinded by greed, I accepted his request; I thought that I was actually going to make a profit from this transaction. I gave him my PayPal email ID and asked him for the address. I told him that I would ship it immediately to any location as soon as I confirmed that the transaction was completed. A few moments later, guess what? I receive another reply from the individual.

   I have made the payment and this is my son shipping information below,please make the shipment tomorrow morning via USPS/EMS select EMS 8 days delivery not AIRMAIL,
because this is urgently needed latest by nextweek for his final project.Let me know if you can't make the shipment in the morning because i don't want any delay that will caused failure.
Name       : Lanre Michael.
Address    : 10,oyesola street agbowo U.I,
City       : Ibadan,
State      : Oyo,
Zipcode    : 200001.
Country    : Nigeria.
Tel        : 2347060578595.
Declear the package as a gift at the post and fill all the custom form to reduce the terminal charges.I will be waiting to hear from you after the shipment as done with the shipment tracking number.Thanks”

In my inbox, it showed that I had received an e-mail from PayPal. The e-mail showed that a transaction had been made through PayPal and the fund of $1,500 had been processed. This was the first time I had used PayPal and the e-mail appeared to be legit. It stated that it may take up to 4-5 business days for the transaction to go into my account. Like a fool, I went to the Post Office the next morning and had my laptop packaged and ready to go to Nigeria. I spent $108 for Express service. The clerk asked me if I wanted to buy insurance for my package. She said that packages tend to get lost when they are shipped to Nigeria. I did not buy the insurance and I went about my business.

That afternoon, I kept checking to see if the transaction would show up in my PayPal account. I remember reading that it would take up to 4-5 business to become finalized in my account; however, I thought that the transaction would at least show that it was pending, but it never did. I did some research regarding PayPal and many people had stated that they received payment immediately. I decided to experiment with my account by transferring five dollars from my checking account to my PayPal account to see how fast it would take to appear. Moments after requesting a transfer, sure enough, the five dollars appeared in my PayPal account under pending transaction. I knew then that something was wrong and my entire body just sank.

I remember what the clerk had told me about packages getting lost in Nigeria. I did a Google search “ Nigeria Paypal” and sure enough, I discover that I had just been played. I cannot explain what I was feeling when I discovered that I have been suckered out of a brand new expensive laptop. The feeling was so bad that I felt like throwing up and destroying everything in my sight. I knew my chance of retrieving that package before it left the United States was close to impossible considering that I had just shipped it via Express. That night, I called the United States Postal Inspector and even the FBI they said once the package goes overseas, it will beyond their jurisdiction to do anything about it. I did research on how, if possible, I can intercept or recall a package. I found out a PDF PS- 1509 form that I can fill out to recall my package but I had to act quickly.

The next morning I went in to my local postal office and gave them the form. On the form, it included the tracking number and the description of the package. It was a rectangular black box and I had hope that was still a chance they can retrieve it. One of the managers had told me that my package was at JFK Airport in New York City. I was surprised that my packaged had made it that far in just one day. The manager told me that he was trying to contact the manager in charge of that office but could not contact him right away because he was at lunch. The manager told me that he left him a message and that that was the best he could do for me.  I was worried that by the time the manager at the other postal office in New York came back from his lunch my package would already be gone.

That night I went to sleep sick to my stomach. I almost began weeping thinking to myself that I just lost a valuable item because of my greediness. I remember laying on my bed feeling helpless praying to God for a miracle. In just one day, the package had gone from California to New York City. I knew if they were not able to intercept my package that day, the next morning my package would be arriving at Nigeria.

The next morning I went to class depressed and still sick to my stomach. I felt like something had sucked all emotion and color out of my body and that there was no way I would be able to recover from this event. It was early in the morning around 7:15am and class did not begin until 7:30am. I remember sitting at the back waiting for class to start. When I pulled out my phone to check the time I realized that I had just missed a phone call and there was a voicemail waiting for me. I turned my voicemail on to hear the message; it was the manager the JFK postal office letting me know that he was able to retrieve my package. I was so overwhelmed that I burst out in joy and felt like all life and emotion that was sucked out of my body had suddenly found its way back. This message was the best thing I have ever heard in a long time because I knew that I would be reunited with my laptop. I learned a lot from this experience. This was a life lesson about what greed can do to people. This experience has also improved my awareness regarding scams.

I have a high interest in studying the different types of Nigerian frauds. I found that they are lurking everywhere and they are good at what they do. I do not like to admit it, but these people are professional con men who get away with millions of dollars. I was unaware of these of scams until this event. In addition, like me, many people are unaware and do not realize that they are becoming victims of deceit and fraud until it is too late. Fortunately, I was able to catch on quickly and intercept my package before losing all; however, unfortunately, others cannot say the same.

Sunday, September 18, 2011

Greed and Ignorance vs. The Leaches

In modern society, greed and desires that seem too good to be true often tempt people into making stupid decisions.  Different types of scams are occurring in the United States every year and around the world. Often times people who are in need of making more money or trying to find the best deal often end up being deceived by professional scammers. However, it is not all the time that greed takes over a person’s decision making capabilities. Often times, people who are ignorant on certain policies or do little research on what they are getting themselves into fall right in the hands of these conniving leaches. These leaches drain away people’s personal savings, banking accounts, personal possessions and even their own identities.

Bernie Madoff  is in prison serving a 150-year maximum sentence for ripping off investors including individuals and corporations. According the Wall Street Journal (2009), in a period of 20 years, Madoff had defrauded investors of almost $65 billion. These investors were unaware of what they were getting themselves into, and they were unaware of where their money was actually going. Madoff took part in one of the biggest Ponzi Schemes ever recorded in U.S history.

It is important to understand the different type of scams that occur. Many individuals believe that they are incapable of becoming victims of these types of crimes; I thought the same thing until it almost happened to me. I was almost defrauded over an item that I was selling through e-bay. I will later talk about this experience and how it has affects others when I talk about the largest organization that is known for scamming people all around the world. If we do not study this issue, more people will end up losing some, most, or even all of their investments. In this modern age, surfing the internet has become a part of our normal day activities. People rely heavily on the internet which also opens the door to scammers to take advantage of its capabilities.

After looking into the different scams there are, I found it humoring and outrageous to see what kind of ideas people come up with. For example, the New York Post did an article about a con man who went around different restaurants handing out letters that claimed that a waiter had spilled coffee on his coat. Within these letters, the man had included a falsified dry cleaning receipt of $38.50 and demanded that he be paid. One of the owners of these restaurants discovered this to be a hoax after discovering that his brother, who is also a restaurant owner, received the same letter. Who the hell comes up with this stuff? The most disturbing part is that ignorant people fall for scams like these. The video below demonstrates the different types of scams involving the internet and normal people going about their business. We may sit here and tell ourselves that we are not that dumb to fall for such fraudulent schemes, but out of our own unawareness we may become targets in the future and/or become victims.