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It’s Always Scam Season

By wmadministrator

Susan Crosby was lonely. Her husband of 10 years had died recently after a grueling, two-and-one-half year battle with lung and brain cancer. Physically exhausted and emotionally drained, Crosby now had a 9-year-old child to raise by herself. And although she didn’t know it then, the central Kentucky woman was a prime target for one of the most popular business scams today.

From beyond the reach of U.S. law enforcement, a professional con artist found Crosby and exploited her vulnerability to get cash from her community bank.
There are few well-known business stories without solid statistics to illuminate the issue, and fewer still in which a business situation can be accurately compared to a crime such as rape. But business scams are one.

From Kentucky’s attorney general to leading bankers, the experts agree that business scams are not only a serious concern but a growing one as well. They see the anecdotal evidence every day, but no one can point to hard numbers on the number of people affected or the financial toll these frauds take. Like rape, the crime is often not reported because victims are embarrassed. To make matters worse, the criminals can hide behind elaborate technological masks and operate from countries that do not recognize or enforce U.S. laws. In the world of business scams, nothing is as it seems.

The story of a scam
Although Susan Crosby is not her real name, her story is very real – a Lane Report staff member has known “Crosby” her entire life – and it’s a textbook example of modern-day financial scamming. She was caught in a version of the popular Nigerian or 4-1-9 scams. In this advance-fee fraud, a wealthy foreigner needs help moving money from his country to the United States and promises a huge reward for helping him. The solicitations typically come through the Internet and need only a few victims among thousands to be highly profitable. It has been so successful a scam that there are now variations.

In Crosby’s case, money was not the lure; it was companionship and love.
“My boss had confided to me that he had met his very nice and successful wife online,” recalled Crosby. “Before this, I had the very worst opinion of online relationships, but I began to think: Where else is there to meet someone? It won’t hurt to look.”

Crosby signed up for Match.com but was getting discouraged when she re-read a poem sent by a man who called himself Brian Robinson.

“He wrote back so happy,” she said. “He had just about given up on hearing from me. I was so beautiful and sounded so sweet. He had also lost his wife, and he had twin sons. They were all killed in a terrible wreck. He was from Grand Rapids, Mich. He owned his own company and did phone-wiring jobs.
He had to travel a lot but made a lot of money. He was currently in Nigeria. The job where he was working had a big fire. He had to stay behind to get paid. The men that had to pay him were giving him the runaround. They had no insurance. Nigeria is a third-world country, and Americans are not well liked, so he had to be careful.”

Crosby didn’t recognize them at the time, but several warning flags were already flying high. Nigeria was the first, although it could have been most any country that does not recognize U.S. laws.

“I am amazed that people still fall for the Nigerian scam,” said Debra Stamper, executive vice president and general counsel for the Kentucky Bankers Association. “I’m not saying people are irresponsible about it; I’m just surprised they haven’t heard the stories. But that’s the way it works. It’s an opportunity scam. They can send out a million emails and only need a few people who haven’t heard about it to respond.”

According to Snopes.com, the Nigerian Scam has worked for decades.

A relationship on a popular dating site
Crosby had been caring for a critically ill husband, raising a child and working full-time. She had little time for worrying about business scams. Even if she had heard about the Nigerian scams, Brian Robinson?(or whatever his real name is) had found yet another new twist. This wasn’t an e-mail offering money in exchange for assistance or even a bogus corporate check – another common ploy today. This was a relationship on a well-known dating site.

The online courting continued, and the couple spent at least two hours a day instant messaging. Although smitten and longing for a relationship, Crosby increasingly had questions. Robinson, of course, had answers. Robinson said he was out of money.

Crosby: How could that could happen? I thought you were well off.

Robinson: Before I left the U.S., I lost a lot of money on a job where everything went wrong.

Crosby: Don’t you have a bank in Grand Rapids you could get some money from?

Robinson: No. I didn’t have life insurance on my family, and it cost me a lot to bury them, and then I lost the other money on a bad deal.

Crosby: Don’t you have an apartment or a house and car in Michigan to come home to?

Robinson: No. I just wanted to leave my past behind and start over. I got rid of everything. I missed my wife and kids so bad I couldn’t stand to stay there. So this job seemed like a good way to get away and make a lot of money. I have other clients that still owe me money, $3 million.

Crosby: Why don’t you have them send part of it to you in Nigeria?
There was no answer to that question, Crosby said. Robinson would change the subject. Then he started writing daily, perhaps concerned that he wouldn’t be able to finish the scam. He had a lot of time invested.

“He was very charming and attentive,” Crosby recalls. “He asked about my son every day. … Then he asked me if I had any money to spare. He said he had not eaten in three days. He hadn’t told me so I wouldn’t worry about him. I asked how much money he was talking about. He said $359 U.S. should be enough. He was going to leave the country and get home. He would change the subject back to a bunch of gush. … I love you. You are so wonderful. Blah, blah, blah. I fell for it hook, line and sinker.”

Now that Crosby was involved financially, Robinson had another problem: He had finally received U.S. postal money orders, but he could not cash them where he was.

Plenty of red flags
It was dangerous for Americans, especially if you were seen coming from a bank, he told Crosby. But he had a plan. He would send the money orders to Crosby, and she could take them to her bank in Kentucky, cash them and then send the cash to him safely through Western Union.

“I was becoming distressed about these problems,” she said. “I had sent him $359 already (and I knew better then to send money to someone I hadn’t met).
He had me emotionally invested in him. … He promised I could not lose anything because he was sending the money to me. U.S. Postal money orders are the same as cash, just not down here, he said. What could I lose?”

More warning flags. “The oldest rule in the book is that if it sounds too good to be true, it probably is,” said Davis L. Huston, senior vice president of Wilson & Muir Bank & Trust Co. in Bardstown.

Another warning flag: The need to send a money order or receiving a corporate check that cannot be cashed until a processing fee is paid.

“In the last two years, we’ve seen an increase in bogus letters received with bogus cashiers or corporate checks that say, in effect, you have won a lottery or have an inheritance,” Huston said. “Find enclosed a check in the amount of $100,000. All you have to do to get the money is send $2,000 in processing fees. Send your money in the form of a money gram to a place outside the U.S. The check you cash comes back as stolen. Your money gram generally can’t be stopped if it is going outside the U.S.

“Even if only two people out of 1,000 do it, it doesn’t take long for the money to add up because they flood the market with these checks.”

Huston, who oversees security issues for Wilson & Muir, said tellers at the bank are well schooled on the issue and direct illegitimate checks, money orders and other documents to him multiple times a month. Customers are so convinced by the scam set-up that they get angry, he said, when he tells them he can’t give the fraudulent check back so they can try to find a more cooperative bank.

Although her instincts told her there was a problem, Crosby finally agreed to Robinson’s plan. He would mail her a total of $10,000 in postal money orders, $3,000 at a time so the Internal Revenue Service (IRS) wouldn’t get involved.

“I did as I was told,” she said. “It was very stressful. I felt like I was doing something wrong, but I couldn’t figure out what was wrong. He was very reassuring; gushing out the calming talk between us each night. … My head was spinning. I was crazy in love, and this money stuff would surely be over this week so he could fly home.”

Heartbroken, Deep in Debt, Threatened with Arrest
The September issue of The Lane Report will publish the second half of our report on common but little publicized financial fraud. Scams many decades old continue to find new victims by cloaking the schemes in the latest trends and technology. In this example, Susan Crosby lost thousands of dollars and so did her bank. Law enforcement had no authority to arrest anyone, except perhaps her. Vigilance is the only defense.

EDITOR’S NOTE: Financial scams likely emerged shortly after the invention of money and continue today. Ever evolving, perpetrators camouflage age-old schemes with the latest trends and technologies, and find victims in Kentucky too regularly. The example reported here is real, and represents a typical chain of events. It’s a sophisticated variation of the Nigerian advanced fee scam that incorporates the romance fraud and elements of the reshipping scheme. The scammer spent dozens of hours gaining the victim’s trust, ultimately costing her and her bank thousands of dollars apiece. Similar scenarios occur daily here and across the nation. Information and education can protect you and your business from joining the ranks of victims. Find out how to avoid being a victim at lookstoogoodtobetrue.com/fraud.aspx