ADVICE ABOUT FRAUD FROM A PROFESSIONAL

Private Detective


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My observations in this article are based on 3 decades of Fraud Investigations and following through with criminal and civil actions.

Fraud can be interpreted in numerous ways. Put simply, it is a criminal’s way of hurting someone intentionally. It is deception for personal gain that causes damage to an individual, a group, a corporation, or government.

The Reasoning behind Fraud

The components of fraud often include greed and narcissism – on the part of the victim and the perpetrator. It is the fraudster’s desire to enhance his or her position with people who are vulnerable. Some individuals who allow themselves to be subjected to fraud, think they can gain wealth or stature. They fall for a convincing line without researching “the dangling carrot.” Those gullible and perhaps greedy targets are taken in by people, who think they are smart and untouchable and who manipulate others without feeling any guilt.

Once the con artist understands and recognizes a victim’s vulnerability, it’s open season for fraud – regardless of age, denomination, or gender.

Characteristics of a Narcissist

Narcissism is a personality disorder whose traits can be diagnosed by degrees.

•Many are self-centered. Their needs are paramount. No one else is important. They have no remorse.

•They don’t care about the damage they cause their victims. They believe people can and should be manipulated.

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•They will not admit to being wrong. When things go bad, they always blame someone else.

•They usually are pathological liars.

Oh, yes, they put on a good front – persona – to impress and exploit others. Typically, they dress well, drive an impressive vehicle, and are never short of words and charm.


Trying to Save Face

People who fall for opportunities that are “too good to be true” may not admit to being defrauded, thus the fraud will not be reported. Believing they can regain their financial losses and save face, the victims will go into another fraudulent scheme that promises even greater potential for financial gain.

Human Nature

No matter how intelligent and cautious we think we are, each of us will be subjected to some form of fraud during our lives. It is my belief that there’s a little bit of larceny in us all. It all depends on how we control our greed and nurture our ability to research opportunities.

It’s so easy for larcenous people to portray themselves as legitimate businesspeople. All they need is a cell phone, a vehicle with a magnetic sign on the door, and a business card, which can be printed on their home computer. In many cases, a snappy card can serve to convince the buyer that the fraudster is legitimate.

Many consumers are looking to save money but they fail to invest the time to research the consequences. The elderly are easy targets in many ways. Generally, seniors have a fixed income and if some smooth-talking person offers a great deal to redo their roof or paint the siding. It’s automatically of interest to them.

Fraud artists are usually very smooth, appear to be kind, and may even carry a picture of their granny with them… to convince buyers they are hardworking folk with families – and that they are totally honest.

Once a deal is struck – usually for cash, to avoid a paper trail and of course to eliminate tax – they will ask for a deposit. Once they have the cash in hand, the fraud starts. Labor and products that were promised may not arrive or they are substandard. That can have a devastating effect on the buyer.

Information Gathering for Fraud

There are so many ways to gather information for fraudulent purposes. In apartment or house rentals, for example, the applicant is asked for his or her Social Insurance (SIN) number and credit card number, financial statements, banking information, mother’s maiden name, and so on.

STOP!

•To whom are you divulging that information?

•How will your private information be used? Will it be used to identity theft and fraud, investment and security fraud, counterfeit payment cards, or credit card fraud?

In today's economy, you must be very careful and on guard, even with existing companies. The need to be more profitable will cause some companies to cut quality and workmanship while still promising their clients first-class service and guarantees. Be cautious. Attempts to defraud you via the telephone or online can include promises of a big win, a gift, and free trips – if you provide credit card numbers and other personal information. Don’t divulge any personal information to a nice voice on the telephone. Just hang up!

Be Aware

Pay attention to the media. Every day, people are being defrauded of millions of dollars. In our business, we have experienced a number of these cases in the past year. A chap in Toronto defrauded friends, neighbors, and relatives of millions of dollars. He has been convicted and sentenced to serve 14 years in jail. Because it is a white-collar crime, he’ll probably be out in 2.

Look at the profitability of crime. Millions of dollars are lost and subsequently gained. The money is rarely recovered. The man is out in 2 years, but the investors have lost their life savings and have nowhere to turn.

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There appear to be no boundaries when it comes to fraud, deception, and theft. Fraudsters have no sympathy or respect for family, friends, or neighbors. Honest people always surprise me with their gullibility when it comes to fast financial gain that is offered in the form of business opportunities and pyramid schemes, to mention two.

Just when I think I’ve seen it all, a truly innovative twist stretches the limits of deception. In one of our Investigations, a man defrauded a church congregation of millions of dollars. You would think someone sitting next to you in church – supposedly believing in honesty, respect, and God – could be trusted. That alleged pillar of society defrauded elderly people of their assets. Thinking they were going to become instantly rich, they re-mortgaged their houses. Some people in their late 70’s and 80’s were devastated. By the time this man was found, the money was gone.

Remember: You are an intelligent individual, capable of making good decisions. You are capable of doing the research. Don’t let false promises and questionable information allow you to make mistakes. Push greed and gullibility to the side and use your common sense.


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False Identities

We were hired to do an investigation relating to the false or fraudulent use of identification documents for the purpose of obtaining welfare cheques. Through our street informant, we acquired the name of an individual who could provide us with stolen or false identification that would give us the information necessary to obtain welfare. One method of data-gathering for fraud was to visit back-country cemeteries to glean names and dates of birth from very old tombstones. With some research, sufficient ID could be collected to supply the government with enough information to get a birth certificate. The reason given for wanting the new birth certificate? The original was lost.

By providing enough details, an identity could be created that would satisfy the government or a financial institution so the thief could open a bank account, apply for a passport, or receive welfare cheques.

After our investigation was completed, a lot of those loopholes were plugged. By the way, our fraud artist was receiving five welfare cheques a month – not a bad income!

Staff

Surprisingly, a good percentage of fraud is committed by people we would trust – perhaps an employee.

For example, in the electronic business an employee is entrusted to make up purchase orders and buy parts for the company but he diverts some of the parts for his own use. The employee then sells the parts or installs the parts himself for cash or in trade to someone for other products. That is a double-barreled fraud. The employee is defrauding his employer and the person or company that has received the “stolen” parts or service is not paying tax on the purchases and is therefore defrauding the government.

Never let your guard down. Make certain your employees are held accountable for their time and their activities.


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Love

Fraud disguised as love is prevalent. We have investigated fraud cases that were almost unbelievable… the victim was so gullible and the perpetrator so heartless.

In most cases, the victims are intelligent but simply turn a blind eye to a glib man or woman who promises everlasting love.

One such case was that of a well-to-do female. She owned her own business, her home was free and clear, she had a new car, and she had little or no debt. Along comes a highly presentable male whom she meets at a friend’s party. Very quickly, a relationship develops and the male moves into the home of his new-found victim.

The relationship blossoms with Mr. Wonderful showering Poor Victim with gifts, flowers, and lots of affection. The fraudster then confides in her … he produces forged paperwork showing ownership of vast property holdings in the east. A proposal of marriage is made with the promise of a big, beautiful home after his properties are sold.


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Next, the fraudster convinces the victim that the property he owns would double in price if he bought an adjacent property. He does not, however, have the cash at this moment to make the purchase. There are other offers on the property and he must act quickly to secure the deal.

Mr. Wonderful then suggests to Poor Victim that if she were to invest $250,000, he would make her a half partner in his entire holdings because he loves her, trusts her, and their relationship is for keeps. Poor Victim gets a second mortgage on her home, then lovingly and trustingly hands over the money to her own true love.

When we finally got involved in the investigation, the fraudster had vanished. We found his identity was fake and the property in question never existed. Poor Victim was left with a broken heart and a $250,000 mortgage on her home.

Often, problems can be avoided by doing due diligence early in a relationship.

Seniors

In my many years of investigation, one of the things I detest the most is abuse of seniors.

Many seniors are conditioned to think that once they reach a certain age, they are no longer capable of being productive or of looking after themselves. That type of thinking encourages some seniors to develop a sense of dependency. They are fearful of making decisions and afraid of being abandoned.

They have their Notary or lawyer create a Power of Attorney and they appoint a family member, friend, or acquaintance to be their “attorney” – the person with the power to make decisions for them in the event they cannot do so for themselves. Because they trust that person, they may slowly involve that individual in more and more aspects of their daily lives. The “attorney” may become a sort of caregiver to the senior.

That’s where there is the potential for fraud. Although the senior may note discrepancies such as missing cash and jewelry – and even discover receipts for items or services he or she has not ordered or received, surprisingly the senior may be reluctant to question any of that. Why? Fear of losing the affection of the person on whom the senior has become so reliant – and who is now stealing from the senior. With every passing day, the thief may become more and more brazen in the acts of fraud.

Our firm regularly investigates scurrilous scenarios regarding senior citizens. Here’s an example of a situation we have seen many times. An elderly widow with good financial resources is befriended by a male, usually about 20 years her junior. The male turns her head with flower, tender compliments, and romantic notions that she hasn’t heard for years, if ever. He’s an accomplished con man.

His next move is to separate her from friends and family by convincing her that he alone has her best interests at heart. In many cases, such a man will profess eternal love; he Assures her that he will always protect her and be there for her because her friends and family have no respect for her… all they want is to see her die and get her money. Once the man has isolated the lady and is now in control, the serious defrauding begins.

We have investigated circumstances like that on numerous occasions. When the family retains our services and we are asked to do a background check on the man, we often find unethical or criminal information about him. When he learns someone is investigating him, he disappears, fearing he may be exposed. The loss to the victim is traumatic.


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It’s not only women who are taken in by unscrupulous people. In our experience, the “younger lover” scams are about even for men and women. Elderly men can be stung by younger women. On one case, a male in his 80’s met a lady in her 50’s. He became so totally obsessed with her ego-stroking flattery, her attention, and her physical manipulation that he invited her to move in with him. She did, then she slowly turned the man away from his family.

She was one of many females who prey on elderly males by overwhelming them with affection, praising their looks and their virility, and of course planting the seed that their family members are only interested in their money. The female is usually emphatic about the fact that all she wants to do is look after her new love and that money is not important. She does, however, permit and encourage him to buy her gifts, give her money and perhaps a car, and pay for all the household expenses. There again, after she effectively severs the male’s ties with his family and friends, her fraudulent behavior becomes more overt.


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Alert

Every woman likes to be told she is beautiful and intelligent. Every man wants to hear he is attractive, a good provider, and a great lover. Through that formula, in the hands of the fraudster – male or female – fortunes have been lost.

Heavy Caseloads

In my opinion, it is unfortunate that only a small percentage of fraud cases are brought to the attention of the public. Police departments are swamped with all types of investigations. They are understaffed and are in no way able to help everyone.

Check It Out!

Because of media coverage, more people are now being made aware of the many fraud cases before the courts.

With today’s computer technology, many documents can be copied and thus be mistaken for an original document issued by a business or government.

Due diligence can save a lot of problems and embarrassment. Doing background checks on people and corporations is an intelligent way of proceeding with any future relationship, whether personal or business.

More people are asking us to investigate the individuals with whom they want to become involved in one way or another, and to check out their offspring’s’ romantic partners. Corporations are asking us to do due diligence so that a partnership or investment deal may be possible. That research may produce a favorable result but there are times when directors or silent partners must be scrutinized. The corporation or company may be clean but it may be run by partners, directors, or investors who are not.

Although due diligence does not provide a 100 percent guarantee, an investigation may give you the confidence to enter into an association you are contemplating. It is less costly than being defrauded later.

Ozzie Kaban, of Kaban Protective Services Inc., is a Private Investigator and Security Consultant licensed by the Department of the Attorney General of BC. His extensive studies have enabled him to better understand human behavioral patterns. His designations include RPC (Registered Professional Counselor), MPCP (Master Practitioner of Counseling Psychology), and RCCH (Registered Counseling Clinical Hypnotherapist).




Article Originally Released By "The Scrivener" Spring 2010




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