Modus Operandi Read online

  7. Since change is always in demand, he asks if she would like to give him a ten dollar bill for the ten ones. He hands her the pile with one hand and takes her ten dollar bill with the other. He promptly pockets the ten dollars and starts for the door.

  8. Usually, the con man will pause to light a cigarette, giving the cashier time to discover that she has nineteen dollars instead of ten one dollar bills. He stalls until she tells him of the mistake, or, in the event the cashier overlooks the mistake or decides to pocket the extra nine dollars herself, he returns as though he has suddenly discovered the discrepancy. If the cashier calls him back (and most will), she will show him the nineteen dollars and tell him that he has shortchanged himself. The con man will thank her profusely for her honesty and combine it with the other compliments about her face or figure.

  9. But wait, here comes the most important part of the con. The con man will then bring forth the single dollar bill that he had palmed and toss it down with the other nineteen dollars, suggesting once again to the cashier that she may need the change and asking her for a twenty dollar bill in return.

  So, for his twenty-one dollars and five minutes, the con artist walks out of the restaurant with thirty-one dollars! Ambitious con artists register as many as twenty or thirty scores a day. Some scores have been known to occur twice in the same place on the same day, because the shortages are very seldom noticed until the count is made at the close of the day's business when the register is counted out.

  These swindles are not always done by men; several women have become very efficient working shops where young men handle the cash registers. You guessed it, the womanly sex appeal added to the talk leaves the young cashier boys with nothing but memories.

  Another short change scam is the envelope switch, which is very easy. The con artist enters a store and offers a handful of bills and small change for a twenty dollar bill. The cashier, only too happy to get small bills and change, will do it. The con artist takes from her pocket a stamped, addressed envelope and says to the cashier, "This is so I can send the twenty dollar bill to my mother for her birthday." After receiving the twenty dollar bill, and while the clerk is counting the money, she puts the bill in the envelope, seals it and returns the envelope quickly to her pocket. But the con artist is very shrewd, she has short-changed the cashier one dollar, and the cashier, thinking that he is on to her, finds it. The cashier tells the con artist that she is short one dollar. The con artist pretends to be flustered and very embarrassed. She says that she will have to go home or back to the office or out to her car or whatever and get the additional one dollar. She takes back the original bills and change and gives the clerk an envelope, in which the clerk thinks the twenty dollar bill has been deposited, and tells him to keep that in the register until she returns with the one dollar that she owes him. It may be hours before the clerk opens the envelope and discovers that the con artist has left an envelope with a blank piece of paper inside.

  The Shell Game

  No one knows exactly when the shell game was introduced to the American public but it has probably been played for hundreds of years. It was a popular pastime among the 49ers in California when they were digging for gold. By the turn of the century it had returned to the cities and was causing the police of Chicago so much trouble that they printed descriptions of the game in the newspapers to warn the public. But this only increased the shell men, or nut men as the press called them, and didn't discourage the suckers from the rural parts of America, who never read the big city newspapers anyway.

  The way con artists operate the shell game is very simple. Three half shells of a walnut, a rubber pea, two milk crates, and a small table or even a large piece of cardboard complete the con artists's outfit. However, at least one booster (or shill) is essential to the success of the swindle. The shell game is played as follows:

  1. The operator of the con game hides the pea under one walnut shell. Then, he moves the shells around the table and bets that no one can tell which shell the pea is under. The booster (or shill), who dresses differently than the con artist, is the first one up to play the game. It is very important that the con artist running the game looks slightly less affluent than the people in the area and that the booster dresses almost exactly like the people in the area.

  2. The booster will come up to the game, and the con operator, with ease and carelessness (which only appears to be carelessness), allows the pea to slide slowly underneath one of the shells. This motion is seen by the onlookers. The booster makes a bet and, of course, wins, so the true victim is drawn into the game.

  3. The operator appears to handle the shells more carelessly than before. He allows the pea to remain for an instant under the edge of one of the shells. The victim sees this and imagines that he has a sure thing. He makes his bet and picks up the shell only to find it empty. The shell operator, skilled in handling the pea, causes it to pass under the shell picked up by the victim and inside the next shell. This motion is too quick for detection.

  Some of the old-time shell game operators were real artists in the truest sense of the word. Not only were their fingers trained to a degree of deftness rarely seen today, but their shtick or spiel was so hypnotic in its effect on suckers that, had they gone on stage with these talents, many of them would have earned far more fame and more fortune than

  they did as con artists and sidewalk swindlers.

  The key to success in this game is to have crowds, crowds, crowds, because they have money, money, money. On the streets of New York at any given time you can see thousands of these shell game operators working the streets and sidewalks. What makes this game so enticing to tourists and people who do not know about it is the fact that crowds are lured into it. The operator counts on the crowds and their noise.

  The booster will scream exuberantly that he has won ten, twenty, fifty or a hundred dollars, thereby attracting a crowd. As we all know, people like to know what's going on to attract a crowd. So, what do we do? We go to the head of the crowd to see what is going on, see the money that is being exchanged, see how easy it is to win (at least for the booster), and offer to give it a shot. The suckers get caught up in the fast pace and large crowds involved in these games.

  The police frequently are asked by local merchants to move these con artists along, as they create such crowd problems that regular customers can't enter a store. When the police are seen coming down the block, either with their sweep vans or on foot patrol, the shell game operator simply packs up his milk crates, stuffs his cardboard box into one of the milk crates, drops his lucky pea into his pocket and moves on. Usually, his shop is set up another thirty feet down the block.

  Three Card Monte

  Three Card Monte may not be as old as the shell game but it is every bit as popular. You encounter it most often today among people waiting for buses, trains and planes. Wherever people have time to kill, a Three Card Monte operator finds enough suckers to make the time profitable for her. This game is similar to the shell game, the only difference being three playing cards instead of walnut shells and a pea.

  For instance, if three aces are used —hearts, spades and clubs—they are shuffled around the table in the same manner as the shells and the operator invites the onlookers to pick out the ace of clubs. If she operates with a shill (or booster), she will allow the shill to win a few bets to gain the confidence of the crowd. Sometimes the confederate is given an opportunity to mark the cards so that everybody but the operator knows which one is marked.

  After the shill and some of the outsiders win a few bets on the marked card someone is induced to put up a really big bet. But when the sucker turns up the marked card it is not the ace of clubs but the ace of spades. Obviously this is a good example of palming and the game should really be called Four Card Monte. Certainly, four cards are involved though the sucker doesn't know it.

  Three Card Monte has many variations, but the best that we have ever seen was worked by a sole operator who used to hang around Penn
Station in New York City. He used no marked cards, no shills and he paid off when he lost; after all, he had a two to one advantage so he could plan on winning two-thirds of the time. But to make doubly sure he won, he had a way of shuffling the cards flat on the table that confused anybody who tried to keep his eye on the right card.

  Bank Con Artists

  Not many years ago, and within the memory of many people, a person who wanted to open a checking account was required to furnish references and one of them was expected to be some type of bank reference. Things are different today. Bankers, pressured by competition and statistics, open checking accounts without any investigation of the applicant or verification of his or her claims to previous banking and business connections. The pressure of competition is obvious; there are almost as many banks as there are drugstores, more banks than bookstores, and their advertising has changed from being institutional to being modern and slick. They spend more money advertising for new accounts than they lose on bad ones. What they don't take into consideration is that their advertising invites swindlers.

  There is an old saying among bank management: "Strangers are not always crooks, but crooks are usually

  strangers." The most common type of bank swindle by con artists is the split deposit con. Many times a con will open an account under a fictitious name and place a small amount of money in the account, usually fifty to a hundred dollars. After the account is opened, they receive various paperwork and documentation. Frequently, the con will visit the bank making small deposits of ten or fifteen dollars or depositing a check for fifty dollars and asking for twenty dollars cash back. This is to build up the confidence of the people in the bank so that he or she is easily recognized as being a bank customer.

  One of Joe's investigations involved a woman, who through a split deposit transaction, deposited a check at her bank for $7,550. She deposited $4,050 to her account and asked for cash back in the amount of $3,500. At another bank she obtained $3,650 cash in a similar transaction. The following Monday, she cashed checks on her accounts for $1,500 at each bank. The total take for one week was $10,150, which is not too bad when you consider that most people do not make that in six months.

  The split deposit scam is very easy to do because it plays on the confidence of the teller. When a teller sees that a person is depositing a check for around seven thousand dollars into an account and is only asking for a portion back, they presume the check will be good. But, the con artist knows the check is worthless and that the bank will discover this at the end of the day when they do their tally. The key to this con is the check must not be drawn on the bank being swindled.

  Many smart con artists know that a bank manager has to initial a check for a large amount before it can be cashed. What they do is scope out the bank to learn the manager's name and, therefore, his initials. They forge the manager's initials on the check and then present the check to the teller at the busiest time of the day. The teller usually will cash the check without question.

  The con artist's success depends on his or her ability to appear normal. The job of selecting surnames for use in a bank scam is also a serious undertaking. The names picked should usually fit the racial characteristics of the con artist. Some names repeatedly used in bank scams are Daley, Ferguson, Ford, Hart, Marlowe, Martin, Mansfield, Mellon, Payne, Robinson, Sheppard, Taylor and Wilson. When a banker meets a person using a familiar surname by right or by choice he is inclined to be more than usually pleased to serve him. In banking, to be more than usually pleased means to freely accommodate the person with any services needed. These names appear to have an actual psychological effect upon those who see or use them.

  Swindlers not blessed with an honest face can make good use of a uniform. The uniform might be that of an armed service, a civic organization or commercial enterprise. For several years banks in our area have been plagued by a person who masquerades as a filling station employee while negotiating worthless checks. By disguising himself in an oil-stained uniform, generally bearing a major oil company's insignia, he leads bank tellers to believe that he is employed locally and has been sent to the bank simply to cash his employer's checks. These are from a number of banks all bearing different signatures and all made out to the station that he pretends to represent. His average take at each bank was five hundred to seven hundred and fifty dollars.

  Several checks stolen from a steel company were cashed at various stores by con artists in work clothes and steel helmets. In another case, checks stolen from a nursing home were cashed by a woman in an immaculate nurse's uniform.

  But the key to these types of bank swindles is that the con artists must make themselves familiar to the people employed by the bank, either by frequently walking in and making minor deposits or by going into the bank with an appearance, name and uniform so that they appear to be nothing other than the average Joe simply trying to deposit a paycheck and take a little bit home for his week's wages.

  The Free Inspection Con

  Whatever your profession or business, the free inspection con is the simplest come-on for a profitable fraud. TV repairmen, auto mechanics, heating and air conditioning engineers, insect and rodent exterminators make the offer for a free inspection by advertising or by door-to-door canvassing. Once inside the TV set, under the automobile or under the house, the most cursory examination will disclose numerous components that need repair or replacing.

  If a homeowner has been dumb enough to mail a postage-free return postcard on which he has indicated an interest in having, let's say, his furnace inspected, a smart operator may knock on his door and intimate that he represents a city government agency or utility company and request permission to inspect the home heating plant. The typical procedure of the furnace repair con is to gain access to the heating plant by some ruse and then take it apart and make it so that it will not be operable. At that point the con can refuse to assemble the parts into working condition on the grounds that the furnace is in immediate danger of causing a fire or explosion or of giving off deadly gas fumes.

  Dead Man's Curse Con

  Sad but true, the obituary columns present another opportunity for con artists. If you or I happen to be one of those listed in the obituary, we do not have to worry about being victimized, do we? The obituary columns of newspapers provide endless sucker lists for a variety of swindles. Packages of worthless merchandise "ordered by the deceased" are delivered COD to the next of kin. Or the bereaved are notified that the deceased had an insurance policy with one premium still unpaid. "Just pay the $35 premium and the insurance check will be sent to you by return mail," states the con artist, but the money never is because the policy never was.

  Heir hunters are still around too. People with fairly common surnames get letters every day telling them about the death in some distant city of a relative who left a sizable estate. The suckers are asked to identify themselves and send ten or fifteen dollars as a filing fee, "So that you can be put on the list to be paid." The filing fee goes directly into the con artist's pockets.

  The Bank Examiner Fraud

  The bank examiner fraud is a swindle based on the hidden desire of many people to serve as a secret agent for the police. Victims are located through telephone books or through surveys. The first telephone call to the victim is double-talk alleging that there is some problem with their account at the local bank. The next call is allegedly from an officer of the bank. The spiel is that one of the bank's employees has been tampering with the accounts of depositors, and they want to catch him, but they need the victim's help to do so.

  Cooperative victims are then informed that they should simply go to the bank, withdraw a specific sum, usually just short of the victim's total deposited funds and bring it home. The victim is assured that the withdrawal will be secretly watched by an armed agent who will follow the victim home to make certain the money is safe.

  A few minutes after arrival at home with the money, the victim is visited by the con artist posing as the armed agent.
After some more double-talk, the swindler counts the victim's money, gives her a signed deposit slip and takes the money. Hours, days and even weeks later the victim finds out the name on the deposit slip is fictitious, the bank knows nothing of this employee, and the money given to the swindler is a total loss.

  The Ponzi Scheme

  The Ponzi scheme or kiting is the basis of all investment frauds, security frauds or get-rich-quick schemes. In a Ponzi scheme—named after Charles Ponzi, the American legend who in December 1919 started this scam—the swindler uses money invested by new victims to pay a high interest on the investments of earlier victims. The money from the earlier victims was appropriated for the operator's own use rather than investing it as claimed in the spiel. A Ponzi scheme collapses when the swindler runs out of victims.

  The most common version of a Ponzi scheme are chain letters and pyramid sales schemes, but the swindle can take an infinite variety of subtler forms. Virtually any investment

  vehicle can start out legitimately and turn into a variation on Ponzi's original.

  In recent years investigations have revealed that con artists have worked Ponzi operations in everything from offshore mutual and private hedge funds to real estate commodities contracts and gold coins. Hundreds of small investors around New York City were recently stung by a Los Angeles crook who sold them some $9 million worth of 270-day notes presumably invested in real estate and guaranteeing returns of 20 to 30 percent interest. Instead, the $9 million vanished.

  A very juicy scandal uncovered within recent memory was the Home Stakes Production Company swindle. Home Stakes, based in Tulsa, Oklahoma, purported to be an oil drilling company run by an Oklahoma lawyer named Robert S. Trippet. Home Stakes sold tax shelter partnerships to hundreds of wealthy investors eager to avoid paying taxes. To disguise the complete lack of oil drilling operations, Trippet and his cronies fooled investors with a variety of maneuvers, even going so far as to paint irrigation pipes orange to make a California vegetable farm look like an operating oil field. When the company went bankrupt in 1973, unsuspecting investors lost $100 million or more. The list of investors was astounding and included some of the biggest names in United States industry, finance, law and show business. Some of the show business crowd victimized were Barbra Streisand, Liza Minelli, Walter Matthau, Can-dice Bergen, Bob Dylan, Mia Farrow, Barbara Walters and the late Jack Benny. Andy Williams alone was sunk for $538,000. So, those who get taken by a Ponzi racket have one consolation: They can always boast that they are in the same league with the nation's financial elite.