You'll
never mistake him for the untouchable Eliot Ness or even for crusading New York
State Attorney General Eliot Spitzer. But Dennis Marlock is a pioneering crime
fighter, passionate about righting wrongs in his specialized field. A 31-year
veteran of the Milwaukee Police Department, Marlock has seen -- and busted --
nearly every sort of street-level scam the criminal mind can devise: the pigeon
drop, three-card monte, bank-examiner fraud. More than 15 years ago, impressed by
the skills of the con artists whom he was trying to arrest and frustrated by how
his fellow officers kept getting outsmarted, he founded Professionals Against
Confidence Crimes. He remains the group's chairman.
And he has
written the book on deception -- literally. In License to Steal (Paladin
Press, 1994 ) and, most recently, in How to Become a Professional Con Artist
( Paladin Press, 2001 ), Marlock takes his readers into the nimble minds and cold
hearts of the criminals that he has encountered. Our challenge to this master of
deception: Lead us through the nimble minds and cold hearts of executives who cook
the books by misallocating billions of dollars' worth of expenses, analysts who
"pump and dump" stocks, and CEOs who spend lavishly on their own behalf and then
portray themselves as champions of the shareholder.
Fast
Company traveled to Milwaukee for some much-needed honest talk about dishonest
business.
Many of our readers are asking themselves, "Why was I stupid enough to invest in
Enron or Tyco?" Well, why were they? The biggest
misconception about fraud is that the victims are stupid. The truth is, con
artists prefer intelligent people. First, smart people are more likely to have
money. Second, smart people are easier to fool precisely because they think
they're too smart to get scammed. We deal with victims who are doctors, lawyers,
judges -- even cops. The easiest people to deceive are those who think that they
are immune to deception.
But
what about the cliche, "If it sounds too good to be true, it probably is"? Actually, if it
sounds too good to be true, you're probably dealing with an amateur con artist. At
the heart of any good con -- whether it's bank-examiner fraud or some scheme on
Wall Street -- is plausibility. The fact that there are plenty of scams that you
would never fall victim to doesn't mean that they're bad scams. It just means that
they weren't designed for you. Good con artists invest a lot of time figuring out
which kinds of people are most vulnerable to which kinds of scams.
What's the mark of a great con man? He's arrogant. He's
cocky. He's brazen. And he loves his work. I remember when one guy who I'd been
after for a long time finally got convicted. He got six years in jail, and I was
there for the verdict. As they were leading him out in handcuffs, he said to me,
"Nice game! You win." Earlier, he had told me that if he got convicted, he'd be
back on the street the day he got out. "The money's too good," he said. "Plus,
it's what I enjoy doing."
So
is it too easy to compare Andrew Fastow from Enron or Dennis Kozlowski from Tyco
with that sort of character? A lot of the people
I deal with are every bit as clever as those executives. But there is a big
difference. Executives have a built-in excuse: "I'm doing what everyone else is
doing." Maybe they were the unlucky ones who got caught; maybe they feel as if the
government changed the rules on them. Few white-collar criminals hold themselves
personally accountable. Street-level con artists know that what they're doing is a
crime.
When you put it that way, the street-level huckster almost sounds more honorable
than the executive. I wouldn't say
that. A lot of the con artists I've arrested are unbelievably charming. I've
wanted to hug a few of them myself! But once the game is over, and they know it's
over, you see who they really are, and it's not pretty. They're vicious, they're
vindictive, they're hateful. Fraud investigators get incensed with how Hollywood
portrays these people. If you're a serial killer, you're Anthony Hopkins in
The Silence of the Lambs with a mask on your face. If you're a swindler,
you're Paul Newman or Robert Redford in The Sting.
By
the way, "con man" is a funny term. Where did it come from? It's more than 150
years old. On July 8, 1849, the New York Herald reported the arrest of a
swindler named William Thompson who would approach his mark by saying, "Sir, do I
have your confidence?" Then he'd perpetrate his scam. The newspaper headlined the
story "The Arrest of the Confidence Man." That's still the key element of these
kinds of crimes: gaining your confidence, even if it's just for a moment.
That word
"moment" is key. One of the biggest giveaways that you might be part of a con is a
sense of immediacy: You have to make this decision now. If a stock is a
good deal today, it will be a good deal tomorrow. When you're dealing with any
scheme that involves money, you should ask yourself two questions: Is it possible
that this person could be lying to me? And if they are, what do I stand to lose?
If the answers are "yes" and "a lot," take some time to investigate further.
Con
artists are great at spotting our vulnerabilities. What's
their biggest
vulnerability? What kills them is
that they can't tell other people how smart and slick they are. Eventually, they
have to talk about it. Interrogation is my specialty. I get more confessions from
con artists than from any other kind of criminal. It drives defense attorneys
nuts! They can't understand why these people confess and then ask for a lawyer.
But if con artists believe they have a sympathetic ear, someone who understands
them, then they love telling you their story. They want to compare notes with you.
They want to gloat. You know the old saying, "You can't con a con"? Well, I have
proven that wrong countless times.
Linda
Tischler ( ltischler@fastcompany.com ) is a Fast Company senior writer.
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