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1“Those private yachts, custom homes, and pieces of expensive jewelry that I flash around are all just a facade.”

2“That 5,000-square-foot beach house was bought with your hard-earned money.”

3“I pulled off a multimillion-dollar investment fraud a few years back and even served three years in prison for it.”

4“I hired some guy in China to bury all the bad stuff about me on the Internet so people like you couldn’t find it.”

5“I have to guarantee insanely exorbitant returns; otherwise, why would anyone invest with me?”

6“I made up that degree from Cambridge University, knowing full well that you would not be able to verify it.”

7“I like to surround myself with celebrities and people of high moral character, so other people (like you) think I have an ounce of respectability in me.” 

8“Our ‘independent’ accounting firm is really run by our CFO, who happens to be my brother-in-law.”

9“One of my ‘tricks’ is telling you things that you will never be able to verify, like my tale about that time I saved 17 schoolchildren from a burning building while I was backpacking through the rainforest in Africa.”

10“That work history on my resume? I just made all that up so you would think I really knew what I was doing.”

11“It’s amazing the kinds of documents you can forge with a little know-how and a few Photoshop skills.”

12“I’ve been fired twice from respectable financial advisory firms for bilking clients.”

13“I’ve been sued more times than I can remember…nobody has collected a dime. God bless our court system!”

14“I’m not licensed as a securities broker or registered as a financial advisor…but I do have a driver’s license!” 

15“My license plate reads: ‘Makin $$.’”

16“That well-dressed woman half my age you thought was my girlfriend? She’s actually an out-of-work actress I paid $150 to be my sidekick for the night.”

17“You know those ‘satisfied clients’ I have plastered all over my website? They’re just figments of my imagination.”

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In July, we received a call from Ruby, a middle-aged professional in Singapore who’d been in an online relationship with an American man for several months. As their relationship grew, so did her suspicions. Over the next 20 minutes, she told me a dizzying story about Rick Charles Moore, an American oil executive who had been detained in Norway for reasons unclear and needed financial support.

I know, this sounds like a typical romance scam, right?

But there were some interesting twists.

Someone on LinkedIn Viewed Your Profile

In December 2019, Rick Charles Moore invited Ruby to connect on LinkedIn. It was one of those innocuous requests that you get all the time if you’re a LinkedIn member. Although Ruby didn’t share any connections with Rick, his profile seemed legitimate enough. He was based in Kansas, had a degree from the University of Oklahoma, and worked as a project manager at BP. Rick had spent his career in the oil industry, working on oil rigs in the American Midwest before venturing abroad. He had several hundred connections, was active on LinkedIn, sharing photos and quotes, and had several endorsements from fellow LinkedIn members for his engineering and project management skills. Rick’s photo was of a middle-aged man — not too handsome and not too perfect. Just the kind of picture that nobody would think twice about.

The chatter started normally enough — friendly, but professional. After a few weeks, it got more interesting. Soon, Ruby and Rick began chatting on WhatsApp for several hours a day.

And then Rick’s problems began to unfurl.

When Rick and Ruby started messaging, he’d been based on an oil rig off the coast of Norway for a one-year project that paid him more than $240,000 — money he just couldn’t pass up. Also, Rick explained, he needed an extreme change of scenery. His wife had died in a car accident a few years before, and he wanted to explore the world and distract himself from his grief.

By mid-February, Rick was stuck on the rig. Incoming messages described an escalating crisis: After a serious battering by a winter storm, the damaged rig had started disgorging oil into the North Sea and was in “non-compliance.” Rick thought an evacuation was unneccessary, but the company did not concur. The crew was airlifted to shore by helicopter while an emergency team repaired the rig.

After a few weeks on dry land, Rick went back to the rig and spent the last weeks of his contract tying up loose ends and packing his things. His commitment was up in early March, after which he was headed back to the U.S.

In late February, Rick asked Ruby to access his bank account. He was unable to get online access from the rig, he explained.

This made no sense to Ruby, and little sense to me when she was telling the story. Why couldn’t he access the account himself? He was messaging her via the internet, wasn’t he? And who asks someone he’s never laid eyes on to access his banking information?

Rick’s request made Ruby uneasy, but she couldn’t quite put her finger on why. At this point, he hadn’t asked her for anything. All he wanted was for Ruby to access his bank account. That seemed harmless enough. Still, she demurred, and he didn’t mention it again.

An Invitation Is Waiting for Your Response

In early March, Rick was transferred to Edinburgh, Scotland. He told Ruby by phone that he was heading home via London, but before he could leave the country, he had to go to the Environment Agency of UK for some type of clearance.

Which is when things got interesting.

Rick told Ruby that his bank accounts had been “suspended” for some unknown reason, and he needed to come up with the “clearance” fine of £4,500. He only had £1,000 on him and asked Ruby to send the money to the Environment Agency in London. All of this seemed quite suspicious to her, save for the fact that Rick told her to send the money directly to the Environment Agency in London.

Ruby never said outright that she was suspicious. But she also didn’t wire the money. Instead, she hopped a plane to London, arriving on the morning of March 10th, and immediately called Rick, who was supposed to pick her up at Heathrow. The phone rang and rang. Ruby headed to the hotel and waited. She heard not a word from Rick for the next 28 hours.

Finally, a WhatsApp message appeared from Rick. He had been detained after reporting to the Environment Agency and was now being transported to Bergen, on the west coast of Norway. The reasons for his detention and removal to Norway were not totally clear.

The story was getting ever more convoluted and less believable. But for an instant, Ruby entertained an impulse to board a train for the 13-hour ride to Bergen.

And then she came to her senses, booked the next flight to Singapore, and went home.

That’s where the story should have ended.

But it didn’t.

Congratulate Rick for Starting a New Position

A week after Ruby flew home, an email from Rick’s attorney landed in her inbox. To be honest, this is the part of the story where I got a little bit lost. At this point, I was so certain that Rick was a complete fraud, which may have caused my mind to wander. But in short, the attorney told her that Rick was stuck in Norway because he couldn’t pay his fine. His bank account was still suspended, and the law firm needed Ruby’s help to transfer money between Rick’s accounts so that Rick could pay the fine from his own account.

Ruby obliged, transferring sums of $30,000 per day in various transactions, none of which came out of her own account.

I still can’t really figure out the end game here. Money laundering? Was this a trust building exercise? Or was Ruby involved in something much deeper that she didn’t want to admit to?

Nevertheless, by the beginning of July, Ruby was getting fed up. Rick was still being detained in Norway, for reasons that remained murky. She hadn’t been in direct touch with him for weeks. And the Pennsylvania attorney had chastised her by email, claiming that something she did had forced the bank to close Rick’s account. Ruby was frustrated and confused; all she’d done was follow the lawyer’s instructions.

And then Rick’s attorney asked Ruby to send the money in Bitcoin.

That’s when she contacted us.

Start a Conversation with Your New Connection

Despite the strange twists of Rick’s story and the attorney’s fishy request to send money in Bitcoin, Ruby sounded hopeful on the phone with me; some part of her still wanted to believe. She told me she’d hoped to go to Norway in person instead of sending the Bitcoin. To her mind, she had been cautious, and had done a lot of things right. She asked tons of questions. She kept documents, official-looking ones. She asked for intimate details and made careful notes.

Ruby struck me as a sensible, educated person with a good nose for the not-quite-right. If someone like her could get scammed, I figured, almost anyone could. She had logged months of mundane, hours-long chatter. She found Rick’s backstory and “perfect” American accent to be imminently believable. And in all, she was out a few thousand dollars in miscellaneous transfer fees. Rick never really got much from her.

Seemed like a lot of work for very little payoff.

The sheer volume of information that Ruby had collected about Rick made her think that he was legitimate. She had Rick’s birthdate, home address in the United States, Social Security number, U.S. phone numbers, and photos. She knew his grandmother’s name, the nursing home where Rick’s mother lived, his height and blood type. She even knew about his wife Karen’s fatal car accident on the first Friday of February, 2016. To her, all these details came together to create a robust fact infrastructure that looked like a real person’s life. And even the red flags didn’t point in any specific direction: Where was the big ask? Why hadn’t he disappeared when she refused to wire funds?

At this point, Ruby suspected that she was being scammed, but she wanted to know a few things: Was Rick a real person? Did this law firm exist?

Notifications

I get calls like this all the time. Usually, they tell a story similar to Ruby’s — and then comes a request like, “All I need to know is if Rick’s blood type is really O+” or “If you can determine that Rick’s mother is really not in that nursing home, I will walk away.” As if the blood type or nursing home lie were some final wound that would sever the fraying thread of trust for good and offer a clean break. It’s usually some ridiculous, arbitrary, and nearly impossible detail they want me to verify or disprove.

But Ruby was reasonable. She had tons of information and needed a simple answer: Was her relationship with Rick real or a sham? Had her confidence been betrayed?

Given the sheer amount of information Ruby had on Rick, I thought this would be pretty easy  — which scared the hell out of me. Because I’ve seen this film enough to know that the easier the job seems at the outset, the more difficult it usually is.

I told Ruby that I would do a bit of digging on my end and get back to her with some recommendations.

I hung up the phone and couldn’t wait to dig in.

A Message About Your New Connection

Within 30 minutes, I’d done some preliminary research and set up a time to talk with Ruby again.

We spoke the next day.

Rick wasn’t real, I told her. Turns out that Rick’s web of lies wasn’t so easy to untangle.

There was no Rick Thomas Moore living at the address she had given me. It was a real house, but nobody by that name or surname ever lived at the address.

There was nobody by the name Rick Thomas Moore with the date of birth she gave me in the entire United States. And the Social Security number wasn’t real either.

The law firm was fake too. The domain name that the attorneys were using? It was set up the day before they emailed Ruby. And the attorney name she had didn’t exist either.

The final nail in the coffin were the photos of Rick. I put the photos she sent through some facial recognition tools, and what do you know? Rick was actually a Russian activist who had fled the country and was living in Spain. Every single one of the photos she sent me were on his Facebook profile.

Ruby took the news with equanimity. Her voice betrayed a mix of relief and disquiet: How could someone do this? And why? “There are many wicked people out there hurting others emotionally and financially,” she later wrote to me.

Ruby insisted on paying me, but I told her no. The only thing I wanted was for her to stop communicating with “Rick” and anyone affiliated with him.

She agreed to my terms.

Ruby also agreed to let me share her story, to help others who are navigating online relationships and wondering how much to trust, and how much to verify.

So here are some of my tips to protect yourself from master deceivers — or, at least, to mitigate the damage if you get caught up in a scam.

  • Scammers like to shower you with details that are tough to verify, like the fact that they ran a 4:10 mile in high school, or that they were the first person to ever eat a bowl of cereal in under 10 seconds. Random details like these “feel” true but prove nothing. Try getting data you can check out, like birthdates, copies of official documents, family names, etc.
  • Not only should you try to casually squeeze verifiable details out of the person, but you should write these details down — they have a funny way of changing over time. So things like: ✓ Date of birth. ✓ Social Security number. ✓ Addresses. ✓ Parents’ names. ✓ Siblings’ names. ✓Co-workers’ names.
  • Ruby was confident that Rick was an American because of his accent. But asking for a video call might have changed everything. Would the person on video have matched the photos he sent and the accent she knew from the phone calls? I seriously doubt it.
  • Don’t take photos someone sends you at face value. Typically, scammers keep a treasure trove of images they found online — it’s relatively easy to skim dozens or even hundreds of snapshots of someone from social media feeds or blogs. So first, I would suggest using one of the many tools to do reverse image searches, like Google Images, Bing Images or Yandex. Then, how about asking for a photo of your new friend at the location they claim to be messaging you from right now? Does the picture resemble your person? Does the background look like the west coast of Norway in February?
  • Talk to an independent third party and get their honest take. As Ruby told the story to me, she said out loud on a few occasions, “This sounds ridiculous.” Within a few minutes of talking to her, I was sure this was a scam, and I think talking to me helped her see that, too. I don’t think she’d ever told her story to anyone — in part, out of embarrassment. But when you hear yourself explain the whole story, it may sound crazy enough that it will help you change your mindset and admit the truth to yourself.
  • An argument I’ve heard again and again is: “But they never really asked for anything!” I’ve worked on dozens of these cases over the years. Sometimes the fraudster doesn’t want anything. Sometimes they are playing the long con, building it up for the big ask later on. Sometimes, it’s just about having some companionship, or the thrill of getting away with something. You really can’t imagine what motivates some people. All you can do is learn to protect yourself from getting hurt.
  • Remember that no one is immune, no matter their intelligence, education, or street-savvy. Anybody can get scammed, including billionaire investors, Nobel laureates, Harvard Law professors, and former U.S. Secretaries of State. Just knowing this can help inoculate you, to a degree, against the shame and denial that too often prevent people from taking timely action to defend themselves.
  • Self-awareness helps. What are your vulnerabilities, insecurities, or pressure points? Be brutally honest with yourself. Romance scammers are brilliant at exploiting desire: People want to feel lovable, attractive, generous, open-minded, compassionate, powerful, selfless or smart, so the scammer finds ways to fill that craving. But they can only fool you if you first lie to yourself.

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One of the most overlooked areas in a private equity transaction is a due diligence background investigation on the key players or principals part of the transaction.  The purpose of the due diligence background investigation is to evaluate the integrity of individuals – both personally and professionally – that you are going to be doing business with. Understanding the personal and professional history of those key players can be the difference between a successful transaction and a complete failure.

People are Assets

In some cases, the key assets that are being acquired as part of an acquisition are hard assets such as a product, factory, patent  or even an idea.  But in other cases, the most important assets are the people that are going to be on board, especially in service related businesses.  If the transaction involves the acquisition of key principals that are going to be the foundation to the future success of the company, among the key issues that need to be answered as part of the due diligence investigation process is the background and reputations of the parties whom you will be doing business with.

Key issues that could be uncovered:

  • Business Interests – Corporate executives engaging in self-dealing or previous business interests that have been the subject of controversy, bankruptcy or sanctions
  • Personal History – Multiple divorce filings with allegations of personal misconduct
  • Professional History – Falsified education credentials or misrepresentations of previous work history
  • Regulatory Issues – Undisclosed regulatory complaints or disciplinary actions taken by state or federal regulatory agency
  • Criminal/Civil Cases – Multiple convictions for driving under the influence of alcohol, allegations of soliciting a prostitute or litigious past
  • Financial Status – Hundreds of thousands of dollars in federal tax liens, credit issues to grievances filed with U.S. Tax Court
  • Assets – Multiple houses and boats which could show someone living beyond their means

In Depth: Anatomy of a Comprehensive Background Investigations [Infographic]

Who should a private equity firm conduct a due diligence background investigation on?

To best answer this question, some of the key questions that you need to ask yourself is: how much capital is at risk, how much reliance is being placed on the key principals of this transaction and the nature of the business (a paper mill and an oil exploration business have two totally different risk profiles). Ultimately, it’s a choice that the private equity firm must make, but at the very least, a due diligence background investigation should be conducted on the key principals as part of the transaction, specifically those individuals whom you have identified during the transaction as keys to the future success to the company.

Final Thought

Having the wrong management in charge can be the  difference between an immediately successful acquisition or a complete failure. The goal of the due diligence background investigation is to identify relevant issues in management’s background and track record to make a well informed business decision that could impact your investment decision.

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Here are some of our favorite fraud and investigation related books from 2010.

Have another site to add to this list? Tell us about it in the comments.

The Big Short

The Big Short by Michael Lewis

Michael Lewis’ The Big Short dives into the causes of the U.S. stock market crash of 2008, overpriced real estate and bad mortgages.  The book gives some never seen before insight into the “shadowy” world of hedge funds, short sellers and investment banks and the people that got it “right” betting on a mortgage crisis.

No One Would Listen

No One Would Listen by Harry Markopolos

Harry Markopolos, who for years tried to warn the SEC about Bernie Madoff’s $65 billion ponzi scheme, writes a detailed description of what his investigation uncovered years before Madoff’s ultimate arrest in December 2008.  The Bernie Madoff scandal is arguably one of the most important fraud cases in history and has led to numerous changes in regulatory and enforcement with the SEC.

Circle of Greed

Circle of Greed by Patrick Dillon and Carl M. Cannon

Circle of Greed chronicles the rise and fall of one of the most influential class action lawyers of all time, Bill Lerach, who was ultimately disbarred and put in prison.  The book digs into some of Lerach’s most infamous courtroom battles with corporate America and describes how he became one of the “most feared and loathed lawyers in America.”

Broker Trader Lawyer Spy

Broker, Trader Lawyer, Spy:  The Secret World of Corporate Espionage by Eamon Javers

Who could resist a book about corporate spying?  Eamon Javers provides some fascinating tales of corporate espionage and investigation.  Although the book sensationalizes some of the work of corporate investigators, it’s an interesting read and gives a bit of history of the private investigator and how investigators are used in the modern day.

Private Investigator Entry Level

Private Investigator Entry Level (02E): An Introduction to Conducting Private Investigations by Philip Becnel

This book was written as an instructional guide for the course of the same name, which is required of all private investigators in the Commonwealth of Virginia. However, it covers all of the basic investigative principles and techniques that apply to investigators working anywhere. There are chapters on ethics, research, interviewing, fraud investigations, evidence, law—and many other topics.

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Looking to keep up to date on fraud and investigation news and trends?  Below is our list of favorite news and blog sources (in no particular order). And if you haven’t learned how to use an RSS reader, it’s a great way to aggregate articles and blog posts.

Have another site to add to this list? Tell us about it in the comments.

Fraud Magazine

Fraud Magazine - ACFE

Fraud Magazine, published by the Association of Certified Fraud Examiners (the world’s largest anti-fraud organization), posts information on trends and issues related to fraud.

Pursuit Magazine

Pursuit Magazine

Pursuit Magazine is an online magazine that posts articles on issues related to private investigations, marketing for investigators and legislative issues.

Financial Fraud Law

Financial Fraud Law

Financial Fraud Law makes multiple posts daily relating to news and analysis on financial fraud, securities fraud, insider trading and Ponzi schemes.

Footnoted

Footnoted

Footnoted.com takes a look at the most overlooked (but probably most important) section of SEC filing to  unearth  information buried in the fine print.

PI Now

PINow

PI Now is an online directory of professional private investigators, but they also post news and original content relating to legislative news and issues effecting private investigators.

White Collar Crime Prof Blog

White Collar Crim Prof Blog

White Collar Crime Prof Blog posts information daily on white collar crime trends, issues and news.

Professor Fraud

Professor Fraud

Professor Fraud, who is actually William Kresse, Associate Professor at Saint Xavier University of Chicago, makes a weekly posts for ChicagoNow.com about fraud and corruption.

The White Collar Fraud Blog

White Collar Fraud

The White Collar Fraud Blog is written by Sam Antar, a convicted felon and former CFO of Crazzie Eddie, Inc.  Antar, a “reformed” convict, writes blunt and insightful posts about SEC accounting frauds.

FINalternatives Halls of Justice

FINalternatives

FINalternative’s Halls of Justice is a collection of articles relating to insider trades, short selling and hedge funds facing SEC probes or fraud charges.

PI’s Declassified

PIs Declassified

PI’s Declassified is an online weekly radio show hosted by Francie Koehler, a California based private investigator.  The radio show discusses some interesting topics including a recent show about privacy issues and online data providers.

PI Magazine

PI Magazine

Private Investigators read PI Magazine, the trade publication for private detectives, police detectives, SIU Investigators and anyone interested in learning how to become a PI.  Although you need to subscribe to PI Magazine to get any content, it’s highly recommended for any investigators in the business for its insightful articles and content.

PI Buzz

PIbuzz

PI Buzz is the “official” blog of PI Magazine which provides links to online databases and other sources.

Investor.Gov

Investor.gov

Investor.gov, which is run by the U.S. Securities and Exchange Commission, provides educational materials to investors to avoid fraud and ponzi schemes and updates on SEC enforcement actions.

Securities Docket

Securities Docket

Securities Docket posts information relating to FCPA compliance, insider trading, criminal probes and securities class action cases.

New York Times White Collar Watch

New York Times White Collar Watch

The New York Times White Collar Watch site tracks current White Collar fraud cases including the Goldman Sachs mortgage fraud case, recent insider trading cases and other white collar fraud prosecutions.

What else would you add?  What are you reading?

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SIPC (Securities Investor Protection Corporation) recently posted a warned about con artists who set-up i-sipc.com which fraudulently induced Bernard Madoff victims to join the site. This reminded us of how search engine marketing  techniques can be used for fraud to con people out of money or “bury” the facts and how people often trust what they find on the Internet

As a newly established private investigative firm, we have been engrossed in numerous tasks needed to start a new business including developing content for our website that has been optimized for search engines.

For those of you who are new to this, there are literally hundreds of websites that provide advice on how to best to provide information on your website so Internet searchers can easily find you or your company by using keywords, tags, headers, etc. Needless to say, there is an entire world of people who have an expertise in this process.

During the course of our investigations over the last few years, we have seen enough to know that fraudsters are using these same search engine marketing techniques to drive Internet searchers away from information on the web that may be damaging.

In fact, we know of at least one person who hired a search engine marketing firm to create content on the web so that when people searched his name, information about his past criminal history would be buried. By creating online links in social networks (i.e. LinkedIn, Twitter, Facebook, etc.), purchasing domains, publishing press releases, and publishing blogs, fraudsters can “bury” the derogatory news article, lawsuit or message board posting below the first few pages of search results – which most people don’t typically navigate past.

If search engine marketing results are getting in the way of your ability to find things, we recommend checking out out Via Search Consulting’s blog entry: 3 Ways to Stop Search Engine Optimization from Crippling Your Search.

The point of all of this is that the web has created an open forum for anyone to comment on just about anything, but by “googling” someone’s name, you are likely not getting the entire story and the information that you do view, may have been planted there. People have dedicated their lives to driving traffic to websites and in some situations, may be using these same tactics to drive people away from other websites.

The important thing to take out of this is to understand the source of the information because it may not always be what you think. Press releases, self-promotional websites and self-reported information is not always a “source” of fact-based information.

A good example whereby false marketing schemes can lead to disaster is the story of Nicholas Cosmo, who was indicted last year of a $350+ million ponzi scheme with his notorious hedge fund, Agape World. One of the pieces of marketing that was touted by Cosmo and his earliest investors was a May 2008 Entrepreneur Magazine article naming Agape Fund as number 73 in its HOT 100 fastest-growing businesses.

Evidently, people trusted this magazine, but the criteria for getting on this list was obviously quite minimal. If Entrepreneur Magazine had performed their due diligence, they may have realized that while he supposedly founded the company in 1999, he was actually in federal prison at the time for “misappropriating” $177,000 of his former client’s funds.

Some food for thought…Did you know that by some estimates, the surface web (a typical “Google” or Search Engine) accounts for less than 1% of what is actually on the web? Where is the rest of it, you ask? Well that is a whole other story!

 

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