More About Money, 2 – Be Alert for Con-Artists

Watch out for the con-artist

“But He Was Such a Nice Guy!”

It is not a matter of if but only when, where and how you will meet one of the nicest guys or gals and you may become enraptured by whatever he or she is touting only to discover that you have been conned out of thousands and thousands of dollars by this seemingly very nice guy or gal. When you think about it it all makes sense because the term typically applied to such people is “con-artist” with the “con” part a contraction of confidence and the artist part, well of course we understand there is some art involved as well. After all you wouldn’t typically trust someone you didn’t believe and consider to be a nice person would you? So the con artist is always one of the nicest people you will ever meet but only on the surface.

 

I once met a man who was clearly one of the nicest guys I had ever met. More than that he was extremely believable as a guy who possessed significant knowledge in the development of successful gas wells in Kentucky. He had his primary office in Southern California but his wells were in Kentucky, all of his wells. When he discovered that I was doing a daily radio show that frequently featured financial news and investment opportunities he asked if I, for a fee of course, would help him establish a meeting a seminar of sorts in a hotel conference room. Explaining that yes I would take his advertising dollars but also making sure that he understood that I was in no way endorsing his investment opportunity, merely encouraging people to come out and hear what he had to say. We agreed and about two months later the hotel conference room was packed with eager potential investors.

A gas well

Since I was a very curious kind of guy I invited a couple of men I knew who were true actual oil and gas professionals to attend the meeting with me and they did. After the meeting they also engaged the ad client and asked him several pertinent questions which according to my friends the promotor guy answered very well exhibiting substantial knowledge of gas production. It all seemed so fine and he was indeed such a nice guy.

 

Then one day I called the man’s office to see if he wanted to promote another seminar meeting. His phone answered on the first ring but it wasn’t the answer I was expecting. Rather the person on the other end of the phone answered: “Agent Johnson, FBI, how may I help you?” “Ah excuse me did I dial the wrong number; is this [insert name here]?” “You dialed the correct number, but Mr. Nice Guy is in custody on multiple fraud charges.” Replied the FBI guy. Oh ouch!

 

He indeed operated a gas well that was producing gas at a very nice level. The problem is once he had sold off all of the available working interests for that well, he sold it again and again and again. The first ones in actually got most of their money back, but the send wave had to be paid too and since there was only one well he simply took money from the third group to pay the second group and then from the fourth group to pay the third and so on. But obviously it didn’t take long before his wild reselling of the very same well caught up with him and he simply could no longer afford to pay anyone any meaningful amount and it all came crashing down with hundreds of people losing many thousands of dollars all because of the very criminal behavior of one seemingly very nice guy.

 

I am not saying that you should never trust a a nice man or woman in a business deal but what you must do always is to dig behind the façade and find the real truth. In this particular situation, a rather classic Ponzi scheme, doing that would have been difficult because he was possessed of enough real knowledge to fool even my two very real oil and gas men who meet him. But even accepting the seeming knowledge level of the real nice guy the two professionals did not invest because to them something just didn’t pass the smell test. But what should you do? Odds are you aren’t an expert on most investment opportunities that may come your way so how do you protect yourself?

 

First and foremost take charge of your greed. We all want money, lots of money so when we are presented with something that looks like a great wealth builder we really want in because heck getting a 30, 40, 50% return or even more is far more exciting that bond fund yielding 4% maybe. But that then brings up the second rule which if it sounds too good to be true it is. Know that and keep your greed in check or what you thought would dramatically build your wealth will in fact destroy it.

Money in Flames

 

The sad truth is those who operate as con artists cannot do it any other way, it is how they are wired. Yes, of course, they are always extremely pleasant because they know that overwhelmingly people prefer doing business with nice people and so when confronted with nice we tend to put our guard down. But these con artists simply can’t handle a legitimate deal. I once knew a man who was a devoted con artist. He had served prison time for some of his deals and he was once again on trial for his latest batch of scams. One day I set before him a totally legitimate deal that could easily have yielded very impressive but totally legal returns. He listened intently and then when I was done he looked at me with a look of confusion and asked: “So where is the twist.” He just could not accept anything without a crooked twist.

 

Maybe someday someone will develop a pill that con artists can take to become legit, but odds are any such pill would likely itself be a con job so just stay always vigilant, deal only with known proven viable businesses and if the pitch is coming from a very nice guy and it sounds too good to be true run away fast.

Photos: Courtesy of Ron Irwin

 

 

Enjoy more from Ron Irwin at the ronirwin website

 

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