Table Of ContentTHE RIP OFF BOOK
©1984 by Victor Santoro
All Rights Reserved
Printed in U.S.A.
Published by:
Loompanics Unlimited
PO Box 1197
Port Townsend, WA 98368
ISBN 0-915179-18-0
Library of Congress Catalog Card Number 84-81631
Contents
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Personal. PFODGITY: “tic fee tox ce eet = asso ore 110
Playing’ ON HODeS. (he. i250 wee Oe eee 113
Postal Frauds: iyo: eet feo tere en othe 115
Real-Estate; Frauds) (ow cree Co ee ee 124
Stock Markets Frauds: 60 sateese bey saks ee 132
Jangential Cons: ook eer: go e.et ho Se a 136
Technological Fraud ser ee eee a eee 139
Telephone Games 2. oe. ec hess ts <n 142
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Siriking Back: isi. e@aliny. a. os a ae ee eee 148
Passive Defense -.5 A..ccpoe cnsa)e 150
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Active Defense: <J20G2 2 ack coe ee eee eee 158
The Principles of Counter-Attacks ........... 163
Counter-Attacking Through the Mails ........ 166
Putting the Heat on the Boiler Room ........ 169
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INTRODUCTION
The purpose of this book is to outline the basic principles of
fraud and specific techniques fraud artists use to milk the public.
The reader will learn to protect himself against many types of
fraud by understanding the ways in which con men work. He'll
also learn to protect his interests in transactions which fall into a
gray area. These are transactions which, although not fraudulent
in the eyes of the law, are yet shady and filled with danger for the
innocent consumer.
We shall see that there is no clear dividing line between honest
deals and frauds, and that there is an element of deception in many
transactions.
The scope of this book will be limited, giving certain areas little
or no attention. Gambling, for example, is a lucrative field for
cheats, and most people should be aware that there is a risk of
being defrauded when they gamble. It seems unnecessary to pound
very hard upon this point.
Sophisticated white-collar crimes, such as embezzlement,
bribery and kickbacks, will get no attention because victims are
corporations, the officers of which are well-versed in the means of
protection and detection. Employee thefts of various sorts, from
physically stealing goods to faking expense account vouchers,
affect ordinary citizens in that they can result in higher prices, but
will not be covered because there is nothing the consumer can do
about them.
The focus of this book will be on frauds aimed at working
people and small businessmen, concentrating on the principles and
techniques involved. The reader will learn how to forestall fraud
by recognizing the methods and avoiding the traps. In this regard,
there will be much discussion of borderline areas, not legally
defined as fraud, and we shall see that there are many deceptive
practices used without infringing the law because the law seems to
be one step behind the clever fraud artist.
There will be outlines of methods by which the consumer can
protect himself, both passively and actively. Finally, unlike most
consumer-oriented publications, this one contains explanations of
the means of overt counter-attack against fraud artists, in an effort
to help the reader understand that he or she does not have to be a
passive and helpless victim because of the impotence of law-
enforcement agencies.
A SHORT GLOSSARY OF TERMS
CON, CON MAN, CON GAME. This comes from the word
“confidence,” and originally was used in the sense that the fraud
artist operated by gaining the victim’s confidence.
MAIL DROP. An accommodation address which permits the
fraud artist to receive mail at other than where he lives. While the
Postal Service offers patrons mail boxes, it requires that the renter
of a mail box provide his correct name and address. It is a crime to
rent a post office box under an assummed name. Postal inspectors
monitor closely the traffic to P.O. boxes and are alert to their use
for fraud. Private operators, on the other hand, need observe no
such restrictive regulations, and they rent their addresses to
anyone who puts up the money. Their customers often have furtive
purposes, but not necessarily criminal ones. Those seeking sexual
contacts, for example, who write to “swinger’s” clubs, often do not
give their home addresses, either because they lead secret lives and
do not want their families to know, or because they want to screen
their mail without letting the writers know where they can be
reached. Also known as “letter drop,” “mail forwarding service,”
and “remailer.”
MARK, JOHN, PATSY, PIGEON, SUCKER, are all synonyms
for victims.
PENCIL. A front man in the operation of a dubious enterprise.
The Pencil is often a legitimate accountant or lawyer, who does
not know the real nature of the business. The Pencil is often used
in the more elaborate fraud schemes, such as taking over and
milking a legitimate business, not in what we call consumer fraud.
SHILL. A confederate or collaborator of the fraud artist. A shill
will often pose as a customer at an “auction,” bidding up the price
and leading the suckers on. He will also serve as a third party ina
gambling scheme, a “pigeon drop,” or a “Murphy” game. Also
known as a “Steerer.”
WHAT IS FRAUD, ANYWAY?
In attempting to define “fraud,” we’ll gain an insight into why
fraud artists are so hard to stop and prosecute. The same problems
we have in defining it trouble legislators and police, and make
arrest and prosecution very difficult.
Most of us know what we mean by fraud. We can say that fraud
is an act to take money or other valuables from another person, for
profit, and by means of deception. That’s a simple definition,
avoiding fancy words and legal terms.
Let’s break down that definition and examine each part:
Taking money from another is often legal, when there is an
honest transaction, such as working for it, or selling an honest
product.
There’s nothing wrong with making a profit, as everyone who
works for a living faces the problem of selling his time or product
for a profit. However, the question of how much profit is legal or
legitimate is one that concerns lawmakers very much. Every
several years, for example, the media present stories of defense
contractors charging the Government extraordinarily high prices
for simple items available at a supermarket or hardware store for a
tiny fraction of the price. Selling a bolt or a pair of pliers for
hundreds of dollars certainly appears illegitimate, although a
prosecution for fraud is unlikely.
Deception is the key to fraud, and the hardest element to prove.
Except in the case of a well-known or well-established fraud
scheme, such as check kiting, it is very difficult to prove that there
is intent to defraud.
Let’s look at a few examples to see how hard it is to prove fraud
exists:
Many people look for “investment” items they can buy in the
expectation of either returns on their money, such as dividends, or
being able to sell at a profit later on. When a seller offers a piece of
real estate, and suggests that it will go up in price in years to come,
it could be an honest transaction or it could be a fraud, depending
