A tightening economy and skittish financial situations bring out more of the con artists and frauds. Take caution against the bad guys in increasingly desperate times and do your research.
Perhaps one of the few perks of living long enough is you can recognize how things come around in cycles. Be it fashion or issues, or, in this case, the economy, you get to see different patterns emerge. You get to see how the tightening economy elicits the desperation in some.
Desperation in turn breeds irrational judgment and impulsive decisions, which in turn provide a fertile breeding ground for the scam artists of every stripe and variety. These are the swindlers or prey upon your insecurities, who offer through what they term “good deals†and ways to beat the system. While there are ways to beat the system and in fact profit and prosper during dicey economic cycles, the scammers are only out to take your money.
Some of the methods stay the same. But thanks to technology, purveyors of fraud play new angles and work variations on a theme. Thanks to Photo Shop and other software, they can show you Bank Statements and financial statements that will wow you with their number of zeros. They will assure their own financial security by showing you statements listing their assets in the millions. All while asking for you to put up your hard earned money. Not only put it up, but put it up first.
And why must you put it up first? Because their money is tied up somewhere. That is one of the more common excuses. They will lie by telling you their money is tied up in property or in some other way just isn’t liquid. Or, here’s a very popular one, they will tell you they are going through a nasty divorce, and they can’t show their money at the moment. They will request you put up the investment funds for both of you and they will gladly pay you back later.
The sad fact is later never comes around. You are left in the lurch, listening to their excuses about the delays in your joint business proposition. They will tell you that your thing is still “sure,†but there are a few hang ups to overcome. And then there are more delays. And finally, miraculously either the great deal fades away or they do. Leaving you holding the bag.
At Corra we have been approached lately with a lot more fraudulent schemes. Businesses, individuals, financial and equity groups, and attorneys are all requesting business research and records that potentially reveal previous fraudulent or criminal activity. In the course of conducting these background reports we are examining counterfeit financial statements. We discover people living on assumed names or doing business by using the social security numbers of dead people. In fact, some of having been using the decedent’s social security number for so long, it looks legitimate. The social security number first appears as if it belongs to the scammer. Until you look deeper and find out the actual owner of the social security number has been dead a number of years.
At Corra we are also seeing social security numbers in the 700 series. These belonged to retired railroad workers, some of the first to receive social security benefits. The United States government ended the issue or use of these numbers somewhere around 1962. So it’s safe to say there are not many old, dead retired railroad workers participating in fraudulent activity. We are also seeing a few 800 series social security numbers. This series has yet to be issue, legitimately. So be on the lookout for these.
All numbers and documents aside, most scam artists win you over by gaining your confidence, hence the term con artist. They prey on you when you are insecure, when your business is in trouble, or when you are looking for extra bucks to make ends meet. Or, if you are the greedy sort, they prey upon your greed and promise you the type of lucrative returns that sound too good to be true. Because they are too good to be true. Or they are illegal, and more often than not you will end up paying the piper.
The federal government has law enforcement task forces in many major cities, investigating real estate fraud. They are finding rings of realtors, appraisers, mortgage brokers, stand-ins and various and sundry folks who fooled with the numbers to falsify the appraisal value of a house, the net work of the buyer and just about everything else. If you are curious, check your local paper or the national news. Each is filled with stories about this.
But now that the housing market has imploded, the predators are out conning people into investment schemes that will save their personal worth or their businesses. They show you the documents, falsify previous returns and then ask for your money.
Don’t be so quick to leap into anything. With any deal, run background checks and do the corporate research. For suspicious businesses, you can run a business credit report. There are many searches you can conduct for relatively nominal fees. Certainly the fees can save you from being swindled for a lot of money and the embarrassment it brings with it. Nothing is guaranteed. There is always a chance a con artist can slip through the cracks. But due diligence will filter out most of them.
So realize bad times can bring on real opportunity. Legitimate opportunity. But bad times can also bring out the bad people. So watch yourself. As they say in boxing, “protect yourself at all times.â€
