Wednesday, April 5, 2017


"The Mindset and Methodology of Small-Value Fraud"

April 5, 2017


Fraud is an extremely broad category of crime, ranging from quick street con to highly sophisticated international theft.  At both ends of the spectrum, con artists can make identification, capture and punishment a lengthy, miserable, and often quixotic experience for investigators.

Today I will offer you some brief insight into my experiences with low-level fraud, suggest some working theory on this crime subset, and hopefully help you insulate against cons who are targeting you as we speak.  There are already many resources in this field of study, and I am certainly not the sole expert.  These are essentially my working notes on the subject, offered up to educate consumers on making better business decisions.  This is not a clickbait-driven listicle;  This has been crafted out of years of real-world cases and has helped put some very bad people in prison¹.

The Confidence Cycle

Con artist work is generally placed into 2 groups, the short con and the long con.  I see this as a sweeping generalization.  Often times the short con is a buildup to larger thefts, creating a hybrid of the two.

I have created a concisely arranged fraud overview into 4 phases: Intro, Target, Virus, and Escape.  Note that these are cyclical, fluid, and often repeat at certain junctures to prolong the con/victim relationship.

1) Intro.

Gifts and Perks.  In the intro phase of a confidence cycle, you'll bump into this person during your daily routine, or through a referral.   They may give you a small gift or perk, like a gift card to iTunes or Best Buy, for example.  This is not by chance, and is often paired with an interesting story to quickly establish trust.

Rapport and Credibility.  This person will listen very intently to you, and may even take notes or record your chat before making an approach.  They are easy to talk to, and will chat with you about anything. They may read books on your conversation topics, and will study any available digital info on you (social media, news articles, etc).  As the relationship progresses, their credibility will remain intact, as they are able to access deeper details of your personal life, interests, and network to determine where the most gain will occur.  The contact will often occur somewhere public, and may be a venue that with at least one of these basic characteristics:

  • Free WiFi.  
  • Showers/Hygiene facilities.  
  • Busy/crowded space (i.e. a restaurant with high turnover).
  • Higher income area.
  • Retail space that logically allows them access for several hours (i.e. Starbucks).
  • Free food.

In more sophisticated scams, the con will offer forged proof-of funds documents.  This steers towards White Collar Fraud and will be addressed in future articles on the subject.

2) Target.

The Ask.  After an initial relationship has been developed,  the con will make their "ask" pretty quick.  This is not the goal, but a way to probe your left and right lateral limits (overall level of interest, income, and/or capacity for greed).  In short, this is their chance to pick apart your impulsive behavior patterns in order to better exploit them in the near future.

Each con/victim relationship has unique principles of duality.  Although the con can interweave with your entire network of friends & family, they essentially view each relationship as a unique snowflake, and therefore you will be isolated from other victims.

The initial ask varies by con. It may be a small sum of money to meet an existing need, or a short-term place to stay, backed by an attention-grabbing story ("I need 200 dollars to help save my dying sister").  It may also be more streamlined- a business deal or strategy that seems too good to pass down.  You're in sports?  They know pro athletes.  You're in Hollywood?  They know producers.  You've been to Nepal?  They've summited the North Face of Everest ².

3) Virus.

Patient Zero.  This portion of a scam's life cycle turns a small theft into a virtual hydra of criminal activity.  The victim network will be expanded rapidly, in both personal networks and venues (depending on which have not been fully compromised).  They infect your close personal network of friends and family, running similar scams while simultaneously driving a wedge between everyone you know. This isolation is an essential component of the scam.  Venues are infected as well.  Coffee shops become linked to fast food restaurants, which now link to fitness centers, which link to sushi bars.  Their access and reach now can affect an entire strip mall, town, and potentially an entire city.

4) Escape.

While a near infinite range of permutations exist in which scams can develop, the exit options are significantly more predictable.

The Payment Plan.  You may receive small repayments on your stolen money, or in some extremely rare instances, get it all back.  The former is more common than the latter, and is typically indicative of other concurrent scams.  You may get a personal check that ends up bouncing, and may not even have the criminal's real name.  You may get an envelope of cash tucked under your mailbox, with a note or text message offering a vague explanation of why they couldn't give it in person.  You may get a rejected Paypal payment from a strange email address.

Imaginary Friends.   Make no mistake about it, these types of criminals have very few real friends or colleagues.  Basically everyone they keep close, even family members, serve as viable options when crafting new aliases, associates, or employee names.   You might experience a gap in contact with the con, but now a new person (if real, known as a shill), has contacted you in their place.  I have personally seen texts from a male con to a victim, from the same number, pretending to be a female secretary.

Threats, Leverage, Blackmail.  Con artists of this caliber possess exceptionally high emotional intelligence, and at this point know exactly what buttons to push to keep you under their thumb.  Perhaps they send you a lewd photo or text message.  Maybe they make a thinly veiled threat, or vaguely allude to an unfavorable scenario that ultimately ensures you stay quiet.

Legal Action.  Although the most legitimate form of recourse would be to offer them their day in court, this isn't always velvet-lined with poetic justice.  Low-value con-artists typically make handshake deals, and slip away due to lack of contracts.  High-value con-artists aim for the opposite, steering the case into civil court and buying their way out.  In either case, the most important point to remember is to stay vocal about it.  Swallow your pride, call your local sheriff, news team, and lawyer and get moving before the con artist vanishes and sets up shop in a new city.


Successful, low-grade con artists can destroy lives in the snap of a finger.  While typically nonviolent, their crimes can ruin families and businesses with absolutely no compunction for their deeds.   Their pathological, sociopathic behavior was defined simply by a victim I once interviewed:
"It's like a diver.  They dive too deep, they start forgetting which way is up".

For this reason I have committed a significant amount of time, energy and resources in learning their methods.  Southern California is rife with fraud, and I have declared open season on con artists.  If you feel you are the victim of a scam, contact us.




¹ Article mentioning Xavier "X" Mitchell, a career criminal who spent nearly 15-20 years conducting high-value wire fraud scams in Hollywood, on household names like Jon Favreau and Penny Marshall.  He was arrested twice in January 2016, on at least 5 different felony counts, in both a pre-dawn raid on his home and again in broad daylight at a Starbucks in Burbank, CA.

² An actual Linkedin contact request I received 12 hours before writing this article.  The "rich Nigerian princes" have morphed into slightly less comical avatars, such as this one, a female British banker claiming to have climbed Mount Everest in an attempt to breach my network and eventually hustle my dad.  She targeted my family, so allow me to publicly return the favor. 

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