Preface -- Acknowledgments -- Introduction -- Con Artists At Work: -- Three stories of Ponzi schemers: -- Charles Ponzi -- Bernard Madoff -- Gregory Bell -- Basic design: -- Drawing attention to the offer: -- High returns at no risk -- Stories to satisfy investors' curiosity -- Con artists' stories are exceptional and creative -- Gaining trust and concealing the truth: -- Words can be used to signal trust -- Words can denote trustworthiness -- Signals to raise trustworthiness -- It depends on how you say false things: specific promises with vague roles -- How a story is told can signal truthfulness -- Refusing to provide the details of a scheme need not undermine trust -- Familiar transaction businesses and forms seem to make verification superfluous -- Hiding fraud by actions: prompt payments that spell trustworthiness, low risk, and much more -- Hiding the vulnerable part of the story: secrecy and costly verification: -- Concealing the true nature of the Ponzi business -- Use of justified secrecy -- Stories that are costly to verify -- Details that hide the truth by drowning it -- Details can hide the truth -- Complexity helps hide the truth as well -- Con artists' deceptive friendship and seeming vulnerability by age and naivety: -- Deceptive friendship and love -- Deceptive weakness of age and seeming naivety -- Old age can deceive -- Naivety can deceive -- Selling The Stories: -- Advertising: -- Importance of advertising -- Where to operate and how to build a reputation: -- Showing generosity -- Entertaining -- Attracting attention by engaging in attention-drawing conflicts -- Recruiting helpers: -- Cooperation, competition, and congregation among con artists -- Birds of a feather flock together -- How do con artists approach their victims?: -- From family and friends to institutions and affinity groups -- Introduction -- Ethnic and religious affinity groups -- Religious institutions -- Hybrid institutions and overtones -- Technology has a growing impact on the growth of Ponzi schemes -- Sales force: -- Collecting and distributing information -- Paid sales force -- Pure sales structure: pyramid schemes -- Con Artists' Behavior Seems A "Normal Usual Behavior": -- Humans have a natural ability to pretend, lie, and influence others: -- Humans-and even primates-have the innate ability to lie convincingly -- Signs of misleading signals -- Legitimate lying -- Exploiting the weakness of the social system -- Slippery slope: from honesty to fraud -- Ponzi scheme "businesses" mirror respectability: -- Legitimate businesses: banking and financial institutions -- Stock market trading: following the trends -- Salespersons and traders -- Entrepreneurs -- Con artists are believable: they believe in their activities and view them as businesses -- Longevity of the businesses breeds respectability --Profile Of The Con Artists And Their Victims: -- Dark side of con artists (and some of their investors): -- Con artists are different from most people -- On very rare occasions a con artist might resort to murder -- On very rare occasions a group of con artists can be deadly as well -- Con artists lack empathy: -- What does empathy mean? -- Lacking empathy can bring repeat frauds -- Lacking empathy can render con artists effective -- How do con artists present themselves?: -- Protecting the weak ego: we are special! -- Con artists' mechanisms of ego protection and justification: -- Denial -- Blaming the government -- Blaming the laws -- Blaming the victims -- Blaming others, but avoiding a show of weakness -- Our actions are justified as protection against others who are fraudsters -- Our good works testify to the legitimacy of our actions --Profile of the victims: What kind of people are the sophisticated victims? What makes some more vulnerable to Ponzi schemes than others?: -- Dark side of some investors: lacking empathy toward other investors and shared greed -- Investors in Ponzi schemes who suspect or know the nature of the "inves tment" yet invest -- Element of greed -- What drives the victims?: -- Gullibility -- Tolerance to the risk of being caught for illegal activities -- Optimistic nature and outlook on life affects risk tolerance -- Social status -- Role of education in risk tolerance is unclear -- Reminder of the stories in Chapter 1: Ways con artists make their offers -- How do sophisticated victims of Ponzi schemes view themselves? -- How do some victims react to the discovery of con artists by the government?: -- Victims' attitude toward the government -- Nature of a Ponzi scheme justifies this view of some investors -- Issue of addiction: -- What is addiction? -- What causes an insatiable craving for more and loss of self-control? -- What are con artists (and perhaps their victims) usually addicted to? -- Con artists are repeat offenders --How does the public view the con artists and the victims?: -- America is ambivalent about its con artists: -- Con artists who defrauded small investors are viewed somewhat differently -- When con artists mimic the wealthy power elite, they live like the wealthy power elite -- Barren and destructive creators: the benefits of creative harm -- Con artists can be corrupting teachers -- How does the public view the victims?: -- With few exceptions, people view the victims of con artists differently than they view the victims of violent crimes -- Related reason for condemning the victims is that they did not do their homework -- Is there protection available for sophisticated potential victims?: -- Red Flag: Very high return at low risk -- Red Flag: Mystery source of the higher returns -- Red Flag: Continuous offerings of obligations -- Red Flag: Con artists' activities outside the legal protections -- Other red flag signals -- Separating business, emotion, and faith -- Advice to investors as protection against affinity scams is similar -- Legal Aftermath: -- Collecting the assets and mediating among the victims -- Issues -- Who collects the remaining assets? -- Who, among the "helpers" of con artists, must pay?: -- Who helps the con artists? -- What about suspecting helpers? -- How to divide the remaining assets? -- Epilogue -- Notes -- Index.
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