While standing in line at the market, an older man was bumped by an attractive middle-aged woman, who apologized and insisted on making amends by running several errands for him. Soon she gained his confidence, then his entire savings, plus his house. It’s easy to see why this type of crime is called a sweetheart scam.
Older adults fall prey to such schemes in higher ratios. They are more trusting, principled, and, let’s face it, more gullible. Seniors make up about 13 percent of the population but fall victim to more than half of the telemarketing schemes dreamed up by clever con artists.
Some reverse mortgage and estate trusts squeak under the legal wire while enticing seniors to pay more for unneeded contract features.
Then there are the Ponzi schemes. Charles Ponzi taught Bostonians a lesson 90 years ago. He claimed he’d discovered a way of acquiring international postal reply coupons in countries with anemic economies. By cashing them in here, he could make a profit of 10 percent or more. Like Tom Sawyer lining up kids to whitewash a fence, he created an image of a wealthy man.
Investors earned a 50 percent return in 90 days by investing in Ponzi’s new Security Exchange Company. As the cash flowed in, he lowered the payback period to 45 days. His sales agents received a 10 percent commission for investments they obtained, and they enlisted their own sub-agents who received 5 percent.
A Boston Globe story added to the stampede. More than 40,000 people invested about $15 million. Ponzi bought a mansion, two fine cars, and for his wife, Rose, fine jewelry. He also bought a bank. Postal investigators and the local gendarmes began investigating the dapper 5-foot, 2-inch tycoon. It turned out he’d purchased a grand total of $61 worth of postal reply coupons, and was merely paying off this month’s investors with money received 45 days earlier.
The Boston Globe did a critical follow-up story. Eventually his stamp scheme came unglued. A judge sentenced him to 11 years in prison. He was deported after his release, but by then his name had become synonymous with a grand scam.
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