It’s International Fraud Awareness Week – Are you Safe From Fraud?

Most of us were blithely enjoying our lives, not even aware it is international fraud awareness week. Well, we’re here to educate you.

Fraud Awareness Week, 12-18 November, was created by the Association of Certified Fraud Examiners to, “Encourage business leaders and employees to proactively take steps to minimize the impact of fraud by promoting anti-fraud awareness and education. Organizations and individuals are encouraged to register as Official Supporters prior to International Fraud Awareness Week, and to host training opportunities, distribute anti-fraud information or otherwise promote anti-fraud activities during the week.”

The thing about fraud is, like not knowing it’s fraud awareness week, you often don’t realize it until it’s too late. People often don’t see it coming – or don’t want to believe the too good to be true is, well, too good to be true – and don’t even recognize what is happening until the fraud is over.

And fraud comes in all shapes and sizes. It runs the gamut from the text message saying your UPS order is held up (click here) to that famous Nigerian prince needing your help to Medicare fraud to Ponzi schemes to massive, disruptive and expensive constructs that steal pensions and savings and leave only a shadow behind.

Author Yepoka Yeebo recently wrote, “Anansi’s Gold,” the story of John Ackah Blay-Miezah, who ran a 20-year scam where he convinced the world he had access to money, diamonds and gold previously held by the Ghanian government and then hidden from British colonists. He said he had access to a $27 billion trust fund and that he was setting up investments to help others maximize their wealth while also helping the people of Ghana. And they believed him. He always appeared laden with jewelry and expensive suits, and he talked the talk investors wanted to hear. Yeebo explained that he gave investors excitement, which they craved, and they wanted to be around Blay-Miezah, who was described as magnetic, charming and handsome. In the end, Blay-Miezah swindled at least 300 people out of $15 million. He died in Ghana before he could be held accountable for his crime.

Fraud can also happen in the least likely arenas. Like wine. Rudy Kurniawan was a wine connoisseur who bought and sold large amounts of wine and later committed massive fraud against wealthy and intelligent wine enthusiasts. One of his fakes, eight magnums of 1947 Chateau Lafleur, for $24.7 million dollars. Things started to unravel when Kurniawan got greedy and forgot to do his homework. Some of the names he started selling were not even in business at the time he claimed, and several of his top wine auction efforts were cancelled. Billionaire Bill Koch filed a suit against him in 2009, claiming Kurniawan sold him fake wine, and in 2013, Kurniwan was sentenced to 10  years in a US prison for selling millions of dollars in fake rare wine vintages. He was released after serving his sentence and extradited to Indonesia.

Of course, there is always the personal fraud. One victim of a Philippines-based ring  reported that he had met a young lady on line who was being forced into prostitution by a man in Manilla. She told him about her dream of becoming a nurse, and how the only thing she wanted was a chance to go to school. She first reached out to the victim to ask him for money to buy herself and her younger brother food, because she hadn’t eaten in several days. She then asked for money for bus fare, for school books, for online classes, and for clothes for her brother to go to school. Her big ask, about a month later, was for money to get to the  United States and to bring her brother, which required paying off the man who was trafficking her. The victim only reported the situation to authorities out of concern that the girl was being trafficked, and he did not realize he was actually speaking to a leader of the fraud ring until authorities explained the scam to him. He declined to prosecute and refused to file a report with his name on it.

There’s also the very famous fraudsters. Charles Ponzi, who created the Ponzi scheme, convinced potential investors he would return 40 to 50% on their investment in International Postal Reply Coupons in 90 days. As he got new investors, he made payments to the original investors, who saw it as proof of his promises and invested more. Then, in July 1920, The Boston Post ran a front page article revealing Ponzi’s fraud. Many of the investors refused to believe the article and stood by Ponzi, but Ponzi started to realize his scam was unraveling. In August, federal regulators raided Ponzi’s office, prompting yet another front page story by the Boston Post. This time, the article include information about Ponzi’s past arrests for check forgery and smuggling illegal Italian immigrants across the border. Eventually, Ponzi surrendered to authorities and served three years for mail fraud.

Everyone is likely to run into some fraudster at some point in their lives. It’s pervasive and technology has added a whole new dimension to the scams these individuals perpetrate.

Unfortunately, people are hesitant to report fraud. It’s embarrassing to admit you fell for something and that you were taken advantage of. It can also be difficult to get law enforcement involved, given stretched government resources and lack of will on the part of the victims.

While the best way to avoid being the victim of a fraudster is to completely and professionally vet them, there also may be opportunity after the fraud to recover money or at least to ensure the predator is neutered from targeting another victim.

Professional intelligence firms can help with both the vetting and the recovery, and can even do it in a quiet way to avoid negative press or public recognition of the role of the victim in the case.

Happy International Fraud Awareness Week!

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