5.2 — Scams: The Oldest Tricks in the Book

Host Walter Isaacson and guests discuss how scams have grown from in-person hustles to wide-spread internet fraud that impacts millions. No matter the technique, it always comes back to gaining someone's confidence.
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In this episode:

  • The Spanish Prisoner (0:00)
  • Who are you calling a con artist? (3:24)
  • An email from a prince (6:59)
  • Catch me if you can (8:44)
  • A big game of Whack-a-Mole (12:53)
  • The world's first robot lawyer (17:11)
  • Australia's most notorious con man (20:37)
  • Billions of new targets (25:44)

Scams have been around since the dawn of currency, with someone always looking to “liberate” someone else’s hard-earned money. Watch as they evolve in scale and sophistication and continue to grow.

Stay ahead of scams with some of the following resources:

Guest List

  • Maria Konnikova is the author of “The Confidence Game: Why We Fall For It Every Time” and “The Biggest Bluff.” She is a regular contributing writer for The New Yorker, and has written for the Atlantic, the New York Times, Slate, the New Republic, the Paris Review, the Wall Street Journal, Salon, the Boston Globe, the Scientific American, WIRED, and Smithsonian, among many other publications.
  • Frank Abagnale is one of the world’s most respected authorities on forgery, embezzlement, and secure documents. Mr. Abagnale’s rare blend of knowledge and expertise began more than 50 years ago when he was known as one of the world’s most famous con men. His riveting story provided the inspiration for Steven Spielberg’s 2002 film, Catch Me If You Can, starring Leonardo DiCaprio as Abagnale and Tom Hanks as the FBI agent fast on his heels.
  • Karl Rock is a YouTube personality who helps foreigners travel safely and confidently in India and in his spare time works to fight scam call centres.
  • Joshua Browder is the Founder and CEO of DoNotPay.com, the world's first robot lawyer. The company helps consumers fight for their rights in over 100 different areas of the law, including suing robocallers, beating parking tickets and cancelling subscriptions. To date it has saved over $40 million for its users."
  • Ken Gamble is a front-line cybercrime investigator with extensive qualifications and experience in investigation, intelligence, surveillance and asset recovery, developed over a 32-year career. Ken has consulted to various foreign governments and law enforcement agencies and presented on cybercrime topics at Interpol events.

“It's quite extraordinary how people, so many people are willing to give money away.”

— Ken Gamble, private investigator

Walter Isaacson:

On a chilly winter day in a small town in New Jersey, a curious railroad worker examined a mysterious message he’s just received. He doesn’t know the sender, one Mr. Santiago de Ochoa. Ochoa has quite the story to tell, he’s writing from prison. He’s been sentenced to 15 years for deserting the Spanish Army but before he was locked up, he managed the bury a weighty treasure, worth some $130,000. Ochoa says it’s in a secret location, not far from the railway worker’s home. Of course, because he’s behind bars, Ochoa can’t retrieve it himself.

Walter Isaacson:

Ochoa’s daughter as a map to the treasure in her luggage but she’s being held hostage by her cruel boarding school headmistress because Mr. Ochoa owes her money. It’s an insignificant sum in comparison to the treasure. If the railway worker makes the payment, then his daughter and the map would be free and the $130,000 could be found and split between Ochoa and his new correspondent. It’s a strange offer, but a tempting one.

Walter Isaacson:

The railway worker contemplates the request. All it requires is a small influx of cash to get the ball rolling. And for the railway worker, it’s an offer that’s too good to pass up. He sends the money owed to the headmistress in order to free Ochoa’s daughter. The railway worker can almost taste his newfound riches.

Walter Isaacson:

But as soon as he sends the money, Ochoa and the $130,000 disappear for good. The railway worker has just been conned. This famous con is known as The Spanish Prisoner. It’s a story that could be plucked detail for detail from an email in your spam folder. But it’s much older than email. The New York Times article that tells the story of the railroad worker’s letter, dates all the way back to 1898. And it’s title? An Old Swindle Revived.

Walter Isaacson:

People have been falling for cons like The Spanish Prisoner for centuries. And in today’s hyper-accelerated technological world, anyone can be a target. But luckily there are ways to fight back.

Walter Isaacson:

I’m Walter Isaacson and you’re listening to Trailblazers, an original podcast from Dell Technologies.

Speaker 2:

They were being swindled, all of them. He couldn’t see any harm in a friendly game of cards.

Speaker 3:

Those are times for being doubly cautious.

Speaker 4:

Risk? It’s as safe as a baby in the cradle.

Speaker 5:

Sure, we got the inside track.

Speaker 6:

I thought maybe we could get in on the ground floor.

Speaker 7:

The stock I a phony and so is he.

Speaker 9:

All right? I guess I wasn’t thinking.

Walter Isaacson:

Whether you call them cons, flim flams or grifts, scamming is a big business. And in the day of electronic communication, it’s getting bigger because anybody who has an email inbox or a phone line is a potential target. Anybody can be a scam victim but nobody needs to be. Con artists have been with us forever but the term itself actually dates back to 19th century New York and a stylish criminal by the name of William Thompson.

Walter Isaacson:

It was the 1840s and if you were a well heeled gentlemen out for a stroll in one of New York City’s better neighborhoods, you might be approached by a friendly man. A man of means who claimed to recognize you, perhaps from a board meeting or social occasion.

Maria Konnikova:

He was a very dapper gentleman. He’d walk around the city in a the three piece suit, watch fob, everything.

Walter Isaacson:

Maria Konnikova is the author of The Confidence Game: Why We Fall For It Every Time.

Maria Konnikova:

He would stop other dapper gentlemen on the street and he would say, “Excuse me, have you the confidence in me to lend me your watch until tomorrow?” What is he doing? He’s establishing this bond of trust. He’s saying, “What reality do you want to live in? Do you want to live in a world where gentlemen like us can honor the gentleman’s code? Where you can trust other people? Where you know that someone like me would never take advantage of someone like you?” And so right away, it’s not like he’s saying, “Hey, give me your watch.” Or, “Will you give me your watch?” It’s, “Have you the confidence in me?”

Walter Isaacson:

Thompson made his victims feel like they were speaking to their social equal and by the end of the conversation, his victims would actually hand over their valuables willingly.

Maria Konnikova:

And person after person would actually part with their watch. And of course the watches were never returned. By the time police finally apprehended William Thompson, he had dozens and dozens of watches in his room because of how often he was able to get people to give them up. And that court case was the first time that we have a reference to confidence man.

Walter Isaacson:

Thompson’s case shows that nobody is immune from being scammed. We have a natural inclination to trust other people. Con artists are charming and charismatic, but they’re psychologically manipulative and very covert so when the con comes, there’s a very good chance you won’t see it coming. Con artists thrive in moments of social change when the rules we’re used to are being upended and the world seems full of unforeseen dangers and opportunities.

Maria Konnikova:

When I think, are we living in a golden age of the con right now? Double, triple, quadruple, yes. Because the technical revolution is seeing a lot of con artists because everything is changing so quickly.

Walter Isaacson:

In fact, scams like the Spanish Prisoner are evergreen because technology allows them to be recycled and disguised very easily. The most well known emails swindle is a variation of the Spanish Prisoner con, known as the Nigerian Prince scam. In the late 19th century, newspaper readers began to notice a series of odd personal ads in the classified section of papers across the United States. They all told a story that couldn’t help but pull at the heartstrings.

Maria Konnikova:

There was a young boy, a prince in Nigeria who was very wealthy, but unfortunately very lonely. And so he wanted pen pals. He wanted companionship and everyone felt bad for this boy who wanted some friends. And he got them, he got a lot of pen pals and they’d start off a correspondence and he would say, “You know what? I’m so grateful to you for this human connection that I want to give you something. Allow me to give you some of my jewels because in Nigeria these are just useless. And in exchange, all I ask for is $5 and a pair of old pants.” And people started sending him $5 and old pants. And of course there were no jewels and he would disappear and they started investigating and eventually they tracked him down. He was not a Nigerian prince, he was an American boy. His name was Bill Morrison and he was underage.

Walter Isaacson:

Nobody has ever figured out what he intended to do with all those pants, but it certainly made him a pile of cash. And more than a century later, the same old story has become one of the best known internet scams. But even though it’s well known, it still works.

Walter Isaacson:

How do we fight back against these duplicitous actors? Well, sometimes it takes a scammer to catch a scammer. One person who knows the mind and motives of the scammer better than anyone is Frank Abagnale and that’s, he was one of the most famous con artists of the 20th century. Back in the mid 1960s, he ran away from home when his parents got divorced. The only problem was he was a 16 year old on the streets of New York with no money and nobody to help him.

Frank Abagnale:

When the money ran out, I found it very easy to pass checks. People really didn’t question me a lot when I went into write a check and then one day I saw an airline crew walking down the street in New York and I realized that if I could get one of those uniforms and I could impersonate an airline pilot and then walk in the bank, it would have so much more credibility. I impersonated an airline pilot for a couple years. I impersonated a doctor in the Georgia hospital for a while. I passed the bar in Louisiana, practiced law there for a while. And before I was old enough to drink at the age of 21, I had cashed more than two and a half million dollars in bad checks.

Walter Isaacson:

If you recognize this story it’s because Steven Spielberg adapted it into the 2002 hit movie, Catch Me If You Can, starring Leonardo DiCaprio as a dashing young con artist. At age 21, Abagnale was caught and put behind bars, but he didn’t just receive a prison sentence, he also received an interesting offer from the federal government. His former pursuers wanted his help catching scammers.

Frank Abagnale:

I have continued to do that now for 43 years, I’ve taught two generations of FBI agents at the FBI Academy. And of course I’ve worked with hundreds and hundreds of companies, financial institutions and corporations over my 43 year career.

Walter Isaacson:

Abagnale says that while scams today have the same basic outline as his old tricks, new technology has made them far more sophisticated and persuasive. Like original confidence man, William Thompson, today’s con men rely on the presumption of familiarity to trick their victims. And while Thompson only needed a sharp looking suit, today’s con artists dress up their approach in the enormous amount of personal information we unwittingly share online every day.

Frank Abagnale:

Today, the emails I see for example, one that I saw a few months ago was from the CEO to the CFO of ironically a technology company in Southern California with about 4,000 employees. And the email simply read, “Good morning, Jeff, wonderful dinner at your home last night. Please thank your wife, Susan. My wife, Helen and I truly enjoyed your company. As I had mentioned to over dinner, I am traveling this week to Nashville, Tennessee, to attend a conference. I will not be back in the office till next Monday. I forgot to mention to you to wire $38,000 to this charity this morning that I promised would have it by 10:00 AM. Please say that that’s taken care of. Here’s the wiring instructions.” Signed, Robert.

Frank Abagnale:

What they’re doing today is they go to social media where the CEO already has a picture of him and his wife up there and his family. The CFO has a picture of his wife and her name. Two months ago when he registered to attend that conference in Nashville, he went on Facebook, said he was going to the conference. They’re taking information in real time and converting that into an email that sounds so immediate, so up to date that you really don’t question the email because obviously you just had dinner with him last night and you think to yourself only he would know these things, but unfortunately, that information is out there.

Walter Isaacson:

Abagnale teaches people to look for the warning signs and to act carefully before wiring anybody thousands of dollars, even if it seems like the request is coming from someone you know. But it’s not just individual emails, scams have truly gone international. They harness the infrastructure of the global communications network. But fortunately there are people in the ground where scammers operate that are trying to expose and shut down their operations.

Walter Isaacson:

It’s a warm evening in Delhi and Karl Rock is standing with his camera outside what appears to be an ordinary office building. And until recently that’s what it was, one of India’s many call centers specializing in legitimate customer service for tech support. But the building has a new, more sinister purpose.

Karl Rock:

A lot of scam call centers have popped up in India because a lot of the work for call centers has gone to the Philippines in recent years.

Walter Isaacson:

Karl Rock is a YouTube personality based in India and many of his videos focus on educating people about scammers and exposing them.

Karl Rock:

There’s a lot of call centers just sitting there empty so they’re very cheap to rent and in India there’s also a problem with unemployment so people are desperate for a job and sometimes they have to take a job like this just to survive. And they just literally set up in a dingy, little building, hire some staff and they just start calling overseas, usually with a tech support scam. It’s very easy to start a course into here and start scamming people.

Walter Isaacson:

I’m sure you’ve encountered a popup message that claims your computer has been infected with a virus or that you’re running an illegal version of Windows. These are tech support scams. Typically the victim is given a phone number to call. When they call it, they’re led to believe they’re speaking to a Microsoft employee who can fix a computer for free. Of course, there’s nothing actually wrong with your computer, but through screen sharing and some technological sleight of hand, it can be easy to fool less tech savvy victims and relieve them of hundreds or even thousands of dollars. It adds up to a very profitable enterprise.

Karl Rock:

A small call center with maybe 20 or 30 employees can make three or $4 million a year.

Walter Isaacson:

Rock teamed up with another YouTube personality who goes by the assumed name, Jim Browning. Browning specializes in fighting scammers by turning the tables on them. He calls phony call centers and poses as a scam victim as the scammers perform their fraudulent tech support.

Karl Rock:

His goal is to shut down these scam call centers by targeting the bosses of them. And I really, really liked that approach. I just said to him, “Can I help you? Can I go out and investigate a call center here for your on ground here in Delhi? I can get your drone footage, I can get you video footage and we can really show a scam call center in the flesh and hopefully we can shut it down.”

Karl Rock:

And so Jim does the digital side of the investigation. Once the scammers log into his computer, he reverse hacks them and he’s able to gather all the information we need or I need to go out and do the physical investigation on ground here in India. He’ll work out who the owners are, how much money they’re making and their address. These are the kind of three key bits of information we need and then I can go and kind of do a stakeout, an old school stakeout and the results are great. Our first video together, we shut down that scam calls into near my house. We called up the owners and just told them we knew what was happening and that was enough to scare them into shutting down the very next day.

Walter Isaacson:

Shutting down these centers is essentially a big game of whack a mole. For everyone that gets exposed, another will pop up somewhere. It can be hard to pinpoint the masterminds of these elaborate global frauds, let alone actually bring them to justice. But one clever man is employing the very automation that scammers use to execute their cons against the con men themselves.

Joshua Browder:

Do Not Pay is the world’s first robot lawyer.

Walter Isaacson:

Joshua Browder is the founder and CEO of Do Not Pay.

Joshua Browder:

Every year. About 60 billion robot calls are initiated in the US and the problem with these calls is they prey on the most vulnerable in society.

Walter Isaacson:

Robocallers are software based systems that dial thousands of numbers and play recorded messages. They become hard to avoid. One common robocall is the IRS scam and there’s good chance that you’ve received the call yourself. Your phone rings and the name of a government agency appears on your caller ID.

Speaker 14:

Hello. This call is officially a final notice from IRS.

Walter Isaacson:

An automated message alleges you’ve committed fraud or misconduct and demands an immediate payment to avoid legal action. If you call the number back, scammers often give fake names, fake IRS badge numbers and know the last four digits of your social security number so it’s no wonder that so many people fall victim to these calls.

Walter Isaacson:

This is just one type of robocall scam and unfortunately, there are many others like it. In America, there are laws to protect people from these kinds of calls, but the legal system can be difficult to navigate. That’s where Do Not Pay comes in.

Joshua Browder:

There’s something called the Telephone Consumer Protection Act that can actually get you up to $1,500 in compensation per robocall, so our idea at Do Not Pay is if we get everyone to start suing these robocallers, not only can they make a bit of money, but also the general problem of robocallers will hopefully stop.

Walter Isaacson:

Do Not Pay automates the process of suing these scammers. And it does so in a very clever way. First it uses the credit card network to identify who is behind the call.

Joshua Browder:

The biggest problem with these robocallers is that they are anonymous. They use fake numbers. They pretend to be someone that they’re not. At Do Not Pay, we built something called the robocaller credit card. And what this is is it’s a honey trap. What Do Not Pay will do is it will give you a virtual credit card and you can say to the robocaller, “Sure here’s my card details.” You give them this card and then through the payment network, when they try and charge you something or charge Do Not Pay something, we decline the transaction and get their name, address and real phone number, which has all the details that we use to sue them automatically on your behalf.

Walter Isaacson:

A successful lawsuit can get your hundreds, if not thousands of dollars from the offending party, but you can carry out a suit only if the perpetrator is based in America. If the scammer lives abroad, information can be gathered, but a lawsuit is out of reach. Do Not Pay hasn’t put a dent in the robocall scam industry yet, but it’s people like Browder who are helping fight this onslaught of fraudulent enticements. And while the scammers that Browder fights are anonymous, sometimes scam fighters have a slightly more intimate relationship with the con artists they’re trying to bring down.

Walter Isaacson:

It’s 2015 and outside and upscale home an armed, gray bearded man named Peter Foster is being wrestled to the ground by local police.

Speaker 15:

You’re under arrest.

Walter Isaacson:

It’s a triumphant moment for Australian private investigator, Ken Gamble, who’s there filming it all on his iPhone.

Ken Gamble:

I led the new South Wales police into his home. It was a very dramatic arrest. He jumped off the back balcony and ran through the bushes and straight into a barbed wire fence and collapsed on the ground with six police officers tackling him to the ground and this was all filmed.

Walter Isaacson:

Three years before Foster’s arrest, Gamble was contacted by an investigative journalist to help unweave one of Foster’s elaborate scams. As successful as he was elusive, Foster is thought to have taken more than $100 million from his victims. This includes his notorious fraudulent betting operation, the Sports Trading Club.

Ken Gamble:

Peter Foster is without a doubt, the most notorious con man in Australia. He’s had a history of cheating and deceiving people in various different types of scams. He always raises a lot of money.

Walter Isaacson:

Gamble uses state of the art tracking technology to find criminals such as Foster, but these scammers have become very good at covering their tracks.

Ken Gamble:

It’s a lot more difficult now to track someone in a foreign country who says they’re actually in London, but they’re actually sitting in Ukraine or in Panama. They could be anywhere in the world these days and they are very, very good at concealing their locations. A lot of the criminal groups that we’re looking at, large scale fraudsters, employing IT security experts encryption, everything that a state or a government would employ to protect themself.

Walter Isaacson:

Working on behalf of a group of his victims, Gamble led police to Foster, who was arrested and imprisoned. While Foster was behind bars, Gamble led an effort to repossess some $15 million worth of his assets, including yachts and race horses. It proved to be an unpleasant surprise for the con artist when he was finally released.

Ken Gamble:

And when he got out of prison after serving his one year sentence, he actually went straight straight to his bank accounts and he then came to the dramatic realization that I had seized all of his money. And by that stage, we had commenced proceedings, against him and he became aware that I had cost him everything that he’d made in the Sports Trading Club. Within three weeks, he was on the phone trying to hire a hitman.

Walter Isaacson:

A $100,000 contract was put out on Gamble’s life. Luckily, the call organizing the hit was intercepted by one of the investigator’s contacts who got everything on tape in time for the police to intervene.

Ken Gamble:

It was pretty chilling. When I first heard them, look, I was pretty prepared. I’d already been tipped off. I was already aware that this was going on. By the time I heard the tapes, I guess it’s a strange feeling, listening to someone talking about you, wanting to get you bumped off. The more I listened to the tapes, the more I come to the realization that he was absolutely serious.

Walter Isaacson:

Amazingly, after spending only a year in prison, Peter Foster walked out a free man.

Walter Isaacson:

The internet has made schemes like Foster’s even more pervasive. Whether it’s a home business, cryptocurrency or foreign exchange markets, social networks are full of promises of easy money and ground floor opportunities.

Ken Gamble:

All the different criminal groups that we’ve looked at over the years have all turned to technology so there’s been a rapid evolvement of technology enabled crime.

Walter Isaacson:

Gamble’s rule is simple. Do your homework, no matter how clever or successful you think you are.

Ken Gamble:

Well, the golden rule is just do not ever do business with people that you do not know. Never get involved in any type of scheme without conducting due diligence, without investigating the people and the parties involved. And that means getting on video calls with them, checking their identity, checking the corporate registrations, checking how long the website has been up for. It’s just the simple, simple due diligence tasks that people can do and they would save themself millions of dollars.

Walter Isaacson:

There’s only so much that one person can do against the deluge of frauds and scams that technology and the internet enable. There’s no one foolproof method, no piece of software or service to protect you against scam artists so it’s up to you to educate yourself about these scams so you can spot them when they inevitably come. Scammers, con artists and grifters have billions of new targets to choose from. The techniques they use and the stories they tell may be old but combined with the reach of new technology, they’ve proven to be remarkably effective. The only real defense is to keep your wits about you and question anything that’s too good to be true because while there will always be con artists, they rely on your own cooperation to rob you. Withhold that and they’re nothing more than an annoyance.

Walter Isaacson:

I’m Walter Isaacson and you’ve been listening to Trailblazers, an original podcast from Dell Technologies. For more information about any of our guests, go to our website at delltechnologies.com/trailblazers. Thank you for listening.