Visit my web site at: www.colintnelson.com
Ponzi scheme tycoon Tom Petters was just convicted here in Minneapolis. Along with guys like Bernie Madoff, he stole billions of dollars. What I always wonder, and you may also, is:
How do these guys get other normal people to give them so much money? I have a hard time just getting my friends to buy me coffee!
As a criminal defense lawyer, I’ve represented con men over the years although not as big as these guys. I’ve talked to and cross-examined the victims and think there are three reasons con men can wiggle dollars out of tight places.
1. Trust The fundamental factor to start everything. The personalitites of con men are attractive and trustworthy anyway. They purposely sell the sense of trust right from the start. Remember, these guys don’t go door to door asking for money. After a few great scores (that may be legitimate) the clients rave about how good the con man is at making money for them. They refer to their friends and business people.
2. Exclusivity Any of us can call an 800 number to Fidelity or T Rowe Price and make an investment. (these are both good companies, by the way!) Imagine how flattered you’d feel if you were referred to someone who could do better by far, than the investments the “public” had to limit themselves to? This idea of an exclusive deal that only a few select people get access to–and there is usually a limited time to take advantage of the great opportunity–is very attractive to most of us. To be a member of the group that gets the “inside” track on investing is powerful and the con man knows that. There’s a little bit of arrogance here, on the part of the investor. The idea that the investor doesn’t have to swim with the masses; they have a superior opportunity.
3. Greed This is the ultimate hook the con man pulls on. Underlying the two previous reasons is the human factor of greed. The chance, the hope, the long shot that you can make a killing–combined with the trust established and the small group of “lucky” people chosen to get in on the great deal–pushes most people over into the con man’s grasp. When you see the results from the first few who introduced you, your eyes began to water.
I guess that leads to an interesting follow-up idea: if the investor is partly to blame, should that be taken into account during a trial of a con man or during the sentencing? After all, the con man couldn’t have committed the crime without a “willing” victim. What do you think?