Gordon G. Leek - Trust Me: Frauds, Schemes, and Scams and How to Avoid Them

TR u ST ME

TR u ST ME

FRA u DS, SCHEMES,
AND SCAMS AND
HOW TO AVOID THEM

GORDON G. LEEK

DUNDURN PRESS
TORONTO

Copyright 2010 Gordon G. Leek

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise (except for brief passages for purposes of review) without the prior permission of Dundurn Press. Permission to photocopy should be requested from Access Copyright.

Project Editor: Michael Carroll
Editor: Jennifer McKnight
Design: Courtney Horner
Printer: Webcom

Library and Archives Canada Cataloguing in Publication

Leek, Gordon G.
Trust me : frauds, schemes, and scams and how to
avoid them / by Gordon G. Leek.

Includes bibliographical references.
ISBN 978-1-55488-705-7

1. Fraud--Prevention. 2. Swindlers and
swindling--Prevention. I. Title.

HV6691.L36 2010 364.16'3 C2009-907533-4

1 2 3 4 5 14 13 12 11 10

We acknowledge the support of the Canada Council for the Arts and the Ontario Arts Council for our publishing program. We also acknowledge the financial support of the Government of Canada through the Canada BookFund and The Association for the Export of Canadian Books, and the Government of Ontario through the Ontario Book Publishers Tax Credit program, and the Ontario Media Development Corporation.

Care has been taken to trace the ownership of copyright material used in this book. The author and the publisher welcome any information enabling them to rectify any references or credits in subsequent editions.

J. Kirk Howard, President

Printed and bound in Canada.
www.dundurn.com

This book is dedicated to my wife Debbie and my sons Garrett and Jason,
for their support throughout my policing career

CONTENTS

Trevor was a successful small business man in the financial planning and insurance industries. Through hard work and developing his client base, Trevor established a large network of associates and clients. One of these associates was Michael Fischer. Michael approached Trevor with a business proposition that would also benefit Trevors clients.

Michael had developed contacts in the aircraft industry where he was able to purchase blocks of seats from different airlines at considerably lower than regular book prices. These tickets could then be resold at a profit to companies for business flights or as part of a vacation package. If Trevor would be able to get some investors together they could all take advantage of this opportunity.

Michael provided Trevor with the paperwork and the books that detailed how the block-buying worked and what the profit margins would be. Convinced, Trevor contacted ten of his clients and convinced them to invest $25,000 each. Unbeknownst to Trevor, he had unwittingly bought into a Ponzi scheme that Michael Fischer had set up. The result was Trevor and his fellow investors lost over $250,000 to this scheme.

When Trevor told me about how he lost his money he was understandably upset. However, he was not just upset about being scammed, but he was also upset on how he was treated by the police. No one appeared to understand that he was a victim. Trevor was told by the investigators he met that this was simply a bad business deal and it was therefore not a police matter.

Trevor then came to me to ask for my opinion. Although not part of the Commercial Crime Unit at the time, at Trevors request I completed an initial investigation and report that detailed the fraud committed. Armed with this, and evidence obtained through a private investigator that Trevor hired, Trevor went back to the police, who then pursued the case.

After twenty-five years as a police officer, and before I was assigned to the Commercial Crime Unit, I often wondered how people could get caught up in these various schemes. To me, at least, they appeared to be blatant lies with nothing to back them up. Why would someone fall for this? Are these people just greedy or simply that stupid? I knew Trevor wasnt either of these things.

As a member of the Commercial Crime Unit and serving with the Alberta Partnership Against Cross-Border Fraud investigating international mass-marketing fraud cases, I had the opportunity to interview hundreds of victims of fraud. I began to realize that there is a reason why they were targeted. Most fraud victims are trusting people that would not be able to comprehend someone deliberately deceiving them. They just happened upon an opportunity presented to them that had the potential of making themselves some money. In other cases, it was a chance to help someone, whether an acquaintance, a charity, or a family member.

I also discovered that with more complex fraud schemes, nearly all of the victims had heard about the various schemes through the newspaper, television, or movies, but none of them really understood how the ruse actually worked, or how they could be or actually were drawn into the ploy.

Trust Me: Frauds, Schemes, and Scams and How to Avoid Them was written to help victims and potential victims recognize and understand how a fraud scheme works. It also explains how fraudsters select their victims and induce them to participate in their scheme and turn over thousands of dollars and life savings.

It is a sad fact of life that police departments do not have the manpower or resources to investigate most fraud cases in a timely manner, or even investigate at all if the dollar value is under a certain amount, regardless of the impact to the victim. By using case studies that illustrate these schemes, it is hoped that the reader will gain a better understanding of how a fraud scheme works, and in turn be prepared to avoid becoming a victim themselves.

As for the case involving Trevor and Michael Fischer, following a two-year investigation Fischer was sentenced to three years in jail. He has served his sentence and is currently avoiding a criminal organization that he also scammed. Trevor repaid his investors in an attempt to restore his business reputation. He was never able to recover any of the money that he and his clients gave to Fischer.

Note from the author: All references to the places and people featured in the case studies have been changed to protect the guilty and the innocent.

This is the first project of this kind that I have undertaken. It has been an interesting learning experience for me, and one that I could not have completed without the help of friends and family, for which I am truly thankful. To Johanna and Anne of Bates Literary Agency, thank you for your guidance and patience in bringing this project together. To members of the Alberta Partnership Against Cross-Border Fraud, the Calgary Police Service Commerical Crime Unit/Fraud Detail, and those fraud investigators who know that the pen can indeed be mightier than the sword. To my friends, Phil, Mark, Sharon, and Sandy, thanks for your support and comments while writing and developing this book. To my sister and brother-in-law, Jan and Bob, your insight and experience that you shared with the initial edits and drafts were great. And to my family, Debbie, Garrett, and Jason, thank you for just being there.