Today I picked up a Sacramento Bee and as I was going through it, a headline on the front page of the Metro section caught my eye: “Fraud suspect pleaded poverty: Con Man accused of money schemes after his bankruptcy filing”. Reading through the article, I learned of a con man who was recently arrested, and had earlier a prison term for a mail fraud case that netted him over $400,000.

Reading the name of the accused, I was struck by a feeling of deja vu, remembering a potential buyer I had previewed property for one time. This “buyer” had called me inquiring into both million dollar plus homes and large residential acreage for creating subdivisions.

As I worked with him over the next several days, a number of things weren’t quite adding up. First, this alleged multi-multi-millionaire was renting a $430,000 house from his sister. Secondly, he told me he would be buying the properties in question through his corporations, and when I asked him the names of these companies, the Secretary of State’s could not confirm any corporations under these names. (Later, the story changed to, “Oh, I haven’t set them up, yet.”) Finally, he told me a story about how he was unhappy with his last real estate agent who had insisted that he get prequalified, and how he was private about his finances and didn’t want to prove his ability to close until he’d identified a property, for fear of letting the seller know how rich he was.

In light of all I was discovering and what wasn’t ringing true about him, I finally made the decision not to work with him, and told him so.

So as I said, today when I read the Bee article, I thought the name reminded me of the prospect I’d fired several months ago. Sure enough, when I went home to check my client records, it turned out that the name of the captured con man and the name of my “prospect” were one and the same (including the middle name).

A good friend of mine told me once that con men have trouble with people who are honest, because honest people will ask the con man (either silently or out loud): “OK, well if this deal is so great, why don’t you take it?” In my case, what started me feeling suspicious was the idea that someone with tens of millions of dollars to spend would have to rely on a Realtor® he found on the Internet to find properties. It seemed pretty obvious to me that such a person would already have relationships in place with folks in my business, and a staff to work on such things. The other items that didn’t ring true all seemed to reinforce this idea as we went along. Whether that means I’m basically honest as my friend suggested or just basically suspicious, I don’t know.

In any event, the best defense against con artists that I know of are the following principles:

• If it sounds too good to be true, it probably is. When you hear something thats’ too good to be true, the hair on the back of your neck should be standing up already. If it isn’t, rely on the second principle.
• Never, ever, pay money up front for something that sounds too good to be true, until you’ve researched the living daylights out of the person you’re giving money to.
• When in doubt, consult with friends, colleagues, and others that you can trust — people you knew before you met the person offering you that deal of a lifetime.
• If you still have doubts, you’re probably best to err on the side of walking away.

blog comments powered by Disqus