Dollars

SCAMS FRAUDS CONS


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If you have been the victim of bad decisions made by gumtree [owned by ebay] operatives who are ill trained & ill equipped to handle the needs of gumtrees clients & advertisers we need you to post your comments on a new site that we are putting together called www.intelagencies.com in which a forum for complaints against providers will allow you to post your comments so people are well versed in the voicing of wrongs done to them by some service providers. Our web masters are working on the www.forumselect.net site now via our private investigations portal of

www.intelagencies.com

WATCH THIS SPACE Be-vigilant- yellow-eyeballs move

Henry Sapiecha

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If you have been the victim of bad decisions made by gumtree [owned by ebay] operatives who are ill trained & ill equipped to handle the needs of gumtrees clients & advertisers we need you to post your comments on a new site that we are putting together called www.intelagencies.com in which a forum for complaints against providers will allow you to post your comments so people are well versed in the voicing of wrongs done to them by some service providers. Our web masters are working on the www.forumselect.net site now via our private investigations portal of

www.intelagencies.com

WATCH THIS SPACE Be-vigilant- yellow-eyeballs move

Henry Sapiecha

CBA FINANCIAL PLANNERS WOES BUT THEY PARTIED HARD IN NZ NEVERTHELESS

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Amid the fracas of the global financial crisis, 100 of Commonwealth Bank’s top financial planners flew to Auckland for an annual three-day bash in honour of the bank’s biggest earners, the so-called ”diamond alliance”. Donning big hair and jewellery, they bopped and drank the night away at a 1980s solid-gold-inspired fancy dress party.

It was Tuesday, October 28, 2008, and financial markets were looking ragged. Lehman Brothers had collapsed the month before and tensions were high as the elite of CBA’s financial planners gathered to pick up awards and trophies for a job well done at Auckland’s five-star Sky City Grand Hotel.

Yet, charging their champagne glasses as awards were handed out to the top 12 planners, including Don Nguyen, a pall hung over the evening as they tried to forget CBA’s bombshell news the previous day that it had frozen seven CBA-owned Colonial First State mortgage funds valued at $3.3 billion.

Spearmint RhinoSpearmint Rhino Photo: Joe Armao

After spending the day sailing around the harbour in Americas Cup boats while their mobile phones ran hot from panicked investors trying to get answers, Nguyen and his fellow planners tried to focus on the night’s events.

One victim, Jan Braund, a retiree, received a call from Nguyen earlier in the day advising her to ”switch all monies out of existing instruments into the bank’s wholesale cash fund”.

Nguyen rang other clients including an 85-year-old man who had put most of his savings in the fund. It was for a medical emergency. His wife was housebound but was described in the financial needs analysis document as in ”good health”.

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Nguyen’s advice to them was to put in a redemption request straight away. The advice was too late. The funds had been frozen. And with this, his chance to churn them into several new portfolios with new upfront fees for the bank and trailing commissions for planners like himself was gone.

Advisers were given lists of clients on the day who had been affected and told to hose down their fears. Nguyen hit the phone hard.

The freezing of the funds was a disaster for many of the 61,000 investors. More than four years later, some are still waiting to get their final capital allocation back.

<i>Illustration: Simon Bosch</i>
Illustration: Simon Bosch

CBA said some investors received earlier payments as a result of hardship applications.

In the months before October 2008, numerous bank customers had been persuaded to switch from the safety of term deposits to these funds with higher rates, which gave the financial planner and the bank a nice trailing commission that they didn’t get from a humble term deposit sold by a teller over the counter at some suburban branch across Australia.

It was part of a last ditch effort by planners to reach their sales targets and boost their funds under management so that they could earn their June 30, 2008, bonus – and qualify for the international three-day conference.

This week, as more details have emerged of the conduct of CBA’s planning division between 2005 and 2010 and the corporate regulator’s tardy investigation, there is now a Senate inquiry into the regulator and, ominously, ”other matters”.

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There are serious questions on how the Australian Securities and Investments Commission handled the tip-off from a group of bank insiders in October 2008 into allegedly corrupt conduct. The whistleblowers urged that there was some urgency in securing the files of Nguyen as they were being ”cleaned up” and that the issue had much broader implications than one dodgy planner. ASIC finally investigated in March 2010.

CBA has since compensated 1127 clients of Nguyen and other planners who gave ”inappropriate advice”, paying out $49.4 million.

Nguyen controlled up to $300 million of client money and the bank has paid out 200 of his clients a total of $23 million. All up ASIC has banned seven CBA planners, who are believed to have represented thousands of clients and managed hundreds of millions of dollars of their money.

CBA has also undertaken to overhaul its systems, including improving compliance standards.

A spokeswoman for CBA said the bank had worked hard over the past three years improving the business. ”Today, our financial planning business is built on a rigorous compliance and risk-management framework which includes prompt investigation of issues, the most comprehensive staff training program in the industry, changes in remuneration, more rigorous systems and processes, better document management and enforcement of higher standards by new management.”

Several of the managers involved have moved on, and now hold senior jobs at other institutions with similar sales-based type cultures. Some have threatened legal action.

The pending Senate inquiry is believed to have put the other banks into damage control as they look at the activities of their own financial planning arms before the financial crisis. CBA said: ”It is unfortunate that a sales-based culture was not uncommon across the industry at that time.”

It has prompted some class-action law firms to investigate whether the CBA scandal is the tip of an industry-wide iceberg.

Senator John Williams said if the Coalition took government in September the inquiry would complement the financial services inquiry, nicknamed the son of Wallis inquiry after the Wallis banking inquiry of the late 1990s. ”We are looking at the regulation of ASIC and how it performs its duties and this will complement Joe Hockey’s inquiry,” he said.

Meanwhile, the industry is readying itself for a new regulatory regime on July 1, under the Future of Financial Advice, which is designed to clean up the industry and make fees more transparent. CBA believes FOFA will ”ensure that advice customers receive from financial advisers is in their best interests”.

But not everyone is confident that it will result in dramatic change. Whistleblower Jeff Morris, who worked as a financial planner at CBA before leaving in February this year, believes FOFA is a step in the right direction but it doesn’t go far enough. ”The elephant in the room is vertical integration. FOFA does nothing to address this. By encouraging consolidation in the industry it has probably added to the problem.”

Justin Brand, from non-aligned financial advisory Arc Financial Consulting, says the vertically integrated model is inherently conflicted. ”What you have is product manufacturers controlling advice channels, setting product targets and ultimately creating a group product ‘sales is everything’ culture, as recently exposed,” he said.

It was the ”sales at all costs” culture insiders and former staff close to the situation believe was the cause of the problem at CBA. They warn that FOFA will deal with hidden fees and disclosure but it won’t change the quest to drive sales.

Geoff Derrick, national assistant secretary at the Finance Sector Union, said FOFA was a step forward but continuing dependence on commission-based remuneration and sales targets meant banking culture remains ”a numbers game”.

”The problem is that some people in the industry have lost their moral compass. What we are particularly worried about is the conflict between what is in the best interests of the banks’ bottom lines and what is in the best interests of customers.”

A Fairfax Media investigation can reveal that the culture inside the planning division before the financial crisis was like a boiler room – such as was made famous in Ben Affleck’s movie, Boiler Room – a place that thrives on high-pressure sales tactics and strategy to sell financial products.

Since the Fairfax Media investigation began, dozens of former and current CBA staff have come forward to provide detailed information on what happened at the bank at that time and give an insight into the way the bank interacted with the corporate regulator. Insiders have detailed how planners were indoctrinated to focus on sales and fees at any cost. ”This was not financial planning, this was head-counting commission car selling,” one former CBA planner said.

Several former CBA staff said the excesses of the boiler-room culture were best demonstrated in April 2008 when sales were dropping through the floor and managers started to panic that their annual bonuses were shot. Two key managers, who have since moved to other financial outfits, decided that the solution was to tap into CBA’s huge deposit book (the largest in the country) and switch it into mortgage funds, which would hit the funds under management figures before June 30 and, bingo, problem solved.

Over the course of April and May 2008 they held meetings in state offices, handing out local branch deposit data that detailed client names and bank accounts with amounts over $50,000. ”They blatantly asked planners to contact as many of these clients and ‘churn’ the 100 per cent secure funds into the Colonial First State Income Fund. This was so everyone – including the managers – would hit their full-year targets and qualify for a hefty bonus … it was big money at stake,” a senior planner said.

When some got their bonuses, planners and managers celebrated at Otto’s in Sydney’s harbourside Woolloomooloo before finishing up in a seedy strip joint in Kings Cross. When the same managers visited the Melbourne planners, the night ended at Spearmint Rhino, a strip joint in Melbourne’s King Street.

Many former planners recall being actively hounded to generate excess sales and threatened with dismissal if they didn’t meet targets. For the planners who wrote the most business, the world was their oyster.

Insiders say the relentless focus on sales and commissions meant financial planners – and senior management – were often at loggerheads with the bank’s compliance staff, who were there to make sure standards were met.

Compliance was described as the ”business prevention unit”. ”The problem was that senior management had their KPIs [key performance indicators] listed as moving money to CFS [Colonial First State]. It was identified even in compliance meetings as a key indicator of success. Those KPIs were filtered down to middle management and then the advisers. What has that got to do with providing quality of advice?” one former compliance manager said.

External compliance controls had been removed in 2004, to be replaced with an internal unit that was tasked with ensuring that 700 CBA planners provided appropriate advice to clients, kept and maintained records and met regulatory guidelines.

When file reviews led to poor performance ratings, planners risked losing a large chunk of their bonuses, as well as threatening those of their superiors.

Documents reveal that sales targets of funds under management and fees were increased every year to the detriment of client interests.

An email sent in 2007 by a manager who still works today in a similar role at CBA outlines targets for planners. This included 12 referrals, eight first interviews a week, five statements of advice (SOA) a week, with the proviso that planners ”only to produce SOAs where a sale will result”, four sales a week and one ongoing service client per month, which is equivalent to 12 a year.

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A former planner said: ”Planners were expected to focus on bringing in new business, more funds under management, more upfront revenue, rather than providing service to existing clients. If they didn’t, they would be sacked.”

There were constant threats of being placed on ”performance management”. ”Not many came out the other end of that 13-week process of ritual humiliation,” a former planner says. ”So the constant pressure for sales, from a management hierarchy whose bonuses depended on it, placed the so-called financial planners in an invidious position: do the right thing and lose your job; or get on board the management bandwagon and stitch up the widows and orphans as required.”

A spreadsheet of actual sales against sales targets for the period February 2006 shows that out of 43 groups only four areas were below the income target of 100 per cent, with the majority 150 per cent and above.

The whistleblowers who reported Nguyen to ASIC on October 30 described the culture as ”nothing more than a sales channel”. They said: ”In the current difficult climate planners are now being threatened with the sack if they don’t meet their sales targets … The message is clear, ‘do what you have to do – or else’. This management culture explains why people like Don Nguyen are tolerated, even valued and protected. The client’s interests don’t really get a look in. This is an issue with much broader implications than one dodgy planner.”

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One former senior planner said each Monday would start with a sales meeting in the bank branch. ”There would be a video clip from CBA TV featuring some luminary babbling on about some aspect of the ‘sales and service’ culture. The ‘service’ part meant that we would ‘assist customers to meet their needs and objectives’; which really meant sell them as many CBA products as possible.”

The statements of advice to clients looked impressive to the uninitiated but most of the pages were standard ”boilerplate” text, a former planner said. ”Again, you only needed one signature at the end and unscrupulous planners would gloss over or just lie about the fees. Come audit time and they’d give you two weeks’ notice to get the specified files into shape. I believe that this is when a lot of the harassed planners, lacking client signatures, would resort to forging them,” he said.

One planner recalls being present at an event where it was announced by a jubilant manager that Nguyen had persuaded a widow to pay him a fee on a $1 million investment. He was referring to Nathalie Kulakowski, an 88-year-old, who signed a document, which Nguyen later filled in saying ”generation of more income was not important to her”. It also said her timeline for investments was seven years with access to funds after five years, when she was 93. She maintained that Nguyen did not tell her $30,421 of her investment would be paid to CFP, including $16,732 in commission to Nguyen.

Nguyen’s treatment of the client would eventually be cited as a cornerstone case when he was banned by ASIC for seven years in 2011.

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In a 10-month period in 2007, Nguyen brought in $39 million in

new business, more than 3½ times his sales target. Despite repeated warnings from 2006 about the quality of Nguyen’s work, including the rorting of fees, cash backhanders and warnings by compliance that he was a ”serious business risk”, Nguyen was promoted to senior planner in October 2008.

But even as CBA began to face lawsuits from victims over his misleading and deceptive financial advice, Nguyen continued to work with a minimum of compliance oversight. In fact, senior staff debated ways to ”position” past negative reports about his conduct in a response to inquiries by ASIC.

As late as March 2009, the bank’s decision to assess Nguyen using centralised file reviews saw him receive a ”negligible risk” rating. Within four months, he would quit the bank.

But just how routinely oversight and compliance rules had been violated became stunningly apparent when internal investigations into Nguyen began in earnest in the lead-up to his ”resignation” in July 2009.

An inspection conducted on May 29, 2009, found 17 client files were missing, one of which had already been declared ”lost” by Nguyen after a spot check the previous year, according to internal bank documents.

While CBA would eventually wash its hands of Nguyen, it didn’t happen quickly enough – and Nguyen wasn’t alone.

Queensland-based planner Ricky Gillespie would be banned from the industry for life in late 2012 after being caught forging client signatures.

Documents obtained by Fairfax Media reveal that the bank knew of at least 14 instances of forgery as early as October 2008 – around the time of the annual conference – but it would take until June 2009 before Gillespie ”resigned”.

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A CBA compliance report on Gillespie dated October 16, 2008, advised of ”issues of suspected irregularities” in the signatures of four of his clients. Within a month another 10 signatures had been identified as possibly fraudulent. In one case, the forged signature was used to obtain a one-off commission of $3200 and create a continuing fee of 0.83 per cent of the value of an investment portfolio.

One document, dated November 20, 2008, says: ”Rick Gillespie, financial planner, PBS Queensland has forged signatures of 14 clients. The initial allegation has a fraud element as it appears the adviser forged the signature of his client on a FSG [financial services guide] receipt and a TWA [transaction without advice] to obtain a one-off fee of $3200 plus ongoing fee of 0.83 per cent.”

The conduct of Nguyen, Gillespie and others destroyed the retirement plans of thousands of hard-working Australians, some whom were forced to rely on Centrelink when their nest eggs were depleted by bad investments they never agreed to.

They include Mervyn and Robyn Blanch, who saw their life savings plunge from $260,000 to $92,000. A retired reverend also suffered after investing $147,163 in 2006 with Nguyen and seeing it drop to $65,772 by February 2009.

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Initially the bank refused to compensate him but in late 2010 he was offered $37,000 without admission of liability. He was offered a further $14,000 in February 2013.

Another victim was an 87-year-old man, hard of hearing and partially blind. His son, who is fighting to get compensation, said his father had saved his whole life with Commonwealth Bank and only ever put his money into term deposits. ”One day he had a visit to his house from a planner who put him into different products. Dad was in his last days and passed away three years later. Why on earth would he put his money into riskier investments?” he said. ”He lost a lot of his money and we [my brothers and sisters] supported him until his death as his money got locked into the deals during the GFC,” he said.

An incensed bank client, Leo Southwell, who invested in the Colonial First State Mortgage Income Fund, said while investors received no income, planners continued to receive trailing commissions of 0.44 per cent. ”There is an old saying that there are two types in this world, wolves and sheep. Well, we’ve been fleeced and now they are coming for some mutton.”

CBA wasn’t the only financial institution offering these funds, with about $24 billion of funds locked up during the GFC

The Senate inquiry will be wide ranging, covering the effectiveness of ASIC and, according to Senator Doug Cameron, will include CBA and its financial planning arm. The inquiry is seeking information from the public.

For the many victims who had to wait years to get compensation, they are pleased to be able to have a voice. Merilyn Swan, the daughter of the Blanchs, who were forced onto Centrelink because of ”inappropriate advice”, welcomes the inquiry. ”Nguyen is the primary cancer, from which the malignancy spread. They all need to be held accountable, including Nguyen, and be made responsible for the misery they inflicted on their investors and face some serious repercussions for their activities. There needs to be some sort of justice extracted from this sorry episode,” she said.

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Henry Sapiecha
gold dollar sign line

Fraud takes numerous forms, from lottery wins to emails from friends.

SCAMS are the hardest security threat to protect against because they rely on exploiting naivety more so  than technical flaws.

Always be suspicious of emails, faxes, text messages, instant messages and even phone calls from people you don’t know. Anything that sounds too good to be true probably is.

You didn’t really win a huge prize in a foreign lottery, get a massive unexpected tax return or inherit millions of dollars from a long-lost relative. A Nigerian businessman doesn’t need your help to smuggle money or gold.

Your potential online Russian bride doesn’t need money for her mother’s operation. Your bank will never send you an email asking you to change your password or confirm your account.

”Common sense can’t be your only defence online – but it certainly helps,” Trend Micro’s David Peterson says.

”Despite being around since the 1980s, the old Nigerian scam alone still sees Australians conned out of over $4 million every year.”

Telephone scams are also becoming more complicated, warns Nigel Hedges, of Kaspersky Lab Australia & New Zealand.

”Such calls claim to be from Microsoft or an information security company and claim they’ve identified malware on your computer. Some people are fooled into granting remote access to their computer via the internet and are charged to have non-existent malware removed.”

Also watch for spam emails taking advantage of current events to trick you into clicking on links. Some scams are designed to trick you into handing over money. Others attempt to install software on your computer to steal passwords and other sensitive information, such as banking details, security expert Lloyd Borrett warns.

”Every time there is a major, high-profile disaster somewhere on the planet, within hours we see the bad guys setting up fake charitable donation websites or services to help you to locate family members,” Borrett says. ”Security companies have the software solutions in place to protect people from technology-based attacks. But it’s really up to each and every one of us to be alert and aware of these sorts of social-engineering scams.”

You even need to be suspicious of messages from people you do know, Borrett says. If a friend sends you a Facebook message asking for money because they’re stuck overseas, it means their account has been hacked. Scammers are also prevalent in the virtual worlds of online gaming.

Be wary of in-game messages promising free gifts if you register at a bogus website.

Then there are messages from fake administrators, threatening account suspension if you don’t log into a bogus website & divulge your account details.

Along with these are ”duping” scams – players who claim they’ve found a bug that lets them duplicate precious items.

So you hand them your hard-earned magic sword, never to see it again.

The rise of social networks such as Facebook as gaming platforms has delivered a new community of people ripe to be scammed. FarmVille might seem safer than Azeroth but scammers still lurk in the dark shadows.

Sourced & published by Henry Sapiecha

CHINESE PRETTY BABY RORTS RED CROSS CHINA DONATIONS

She calls the white Maserati she drives the “little horse”, and her orange Lamborghini the “little bull”.

Guo Meimei, 20 – who goes by the name “Guo Meimei Baby” – may be just another young woman flaunting her wealth through photographs posted on Weibo, the Chinese version of Twitter, but her link to the Red Cross of China has sparked a national debate around how donations to charities are used.

The Red Cross of China is one of the country’s largest charities and has strong ties to the communist government. And evidence of Ms Guo’s extravagant lifestyle has made the Chinese suspicious in a country where the divide between rich and poor is growing and corruption is rife.

Guo Meimei Baby ... accused of taking money that was meant for charity.Guo Meimei Baby … accused of taking money that was meant for charity. Photo: AFP 

In her microblog, Ms Guo, whose name “Mei” means “pretty”, has posted photos of herself with the sports cars, a pile of luxury Hermes handbags, sipping drinks in business class on a flight and showing off her luxury villa.

She identified herself as “commercial general manager” at the Red Cross, a position verified by Sina – the company that runs Weibo.

Suspicious Chinese netizens are asking how a young woman such as Ms Guo came into such wealth. Did she or her boyfriend embezzle money from the Red Cross to line their own pockets?

In business class ... Guo Meimei Baby.In business class … Guo Meimei Baby. Photo: AFP 

Their suspicions were fuelled by a photo that surfaced on the internet in April, which revealed the Shanghai branch of the Red Cross spent 9859 yuan ($1420) on a meal.

China’s state auditor also announced in recent weeks that it found five discrepancies in its review of the Red Cross’s 2010 budget, prompting a denial of corrupt practices from the organisation, which has often been in the forefront of official fund-raising drives following natural disasters.

Ms Guo later backtracked on her Red Cross job title as China’s online activists swung into action and dug up information about her past and her relationships.

One of her cars ... Guo Meimei Baby.One of her cars … Guo Meimei Baby. Photo: AFP 

But the damage had been done and rumours about Ms Guo and the Red Cross continued to grow.

When she tried to leave the country – purportedly to Australia – to get away from the spotlight, the Australian embassy in Beijing was inundated with calls and emails from people expressing fears that she was going to run away with “their donation money”, the Shanghai Daily reported.

The netizens had alleged Ms Guo was the girlfriend or mistress of a senior official, 42-year-old Wang Jun, who organised charity campaigns for the Red Cross.

Living the high life ... Guo Meimei Baby poses on a horse.Living the high life … Guo Meimei Baby poses on a horse. Photo: AFP 

On Weibo alone, more than 600,000 posts a day were written about Ms Guo, London’s Daily Telegraph reported. It claims more than 140 million users.

Mr Wang was forced to resign from his job as a result of the furore, while the Red Cross vehemently denied any links to Ms Guo.

Ms Guo played down her links with the mega-charity in a special report into the controversy on national broadcaster CCTV.

“The wording ‘Red Cross Society’ is too sensitive,” Malaysia’s The Star newspaper reported her as saying.

“Everybody was saying that I used the organisation to make big bucks.”

The English-language China Daily – another state-run paper – weighed in on the debate.

“The RCSC [Red Cross Society of China], as a non-profit charity organisation, has the obligation to keep all its activities transparent and let the public know how it manages its donations and where it has spent them.

“Yet, its lack of transparency in the use of charity donations has long been a matter of concern to the public.”

The People’s Daily – the mouthpiece of China’s Communist Party – also acknowledged the growing influence of social networking tools on Chinese society and politics in an article titled: How microblogging power shakes reality in China.

“Microblogging was introduced in China in 2009 and has quickly developed into a major channel of public opinions within less than three years. Many hot incidents were first exposed through microblog posts.

“From the forum to microblogging, the people’s enthusiasm and ability to participate in public affairs has greatly risen along with the [i]nternet, which is developing at an unbelievable speed.”

English-language social media sites Facebook and Twitter – which attract millions of users worldwide and through which aspects of the Arab Spring revolutions in the Middle East and North Africa were organised – are banned in China.

Yet local sites Tencent (China’s largest internet service portal), Weibo, Baidu (a search engine) and Renren (sometimes dubbed the Chinese Facebook) have grown in popularity in recent years, and are among the world’s most visited online networking sites.

The ultimate victim of the widespread outrage may be China’s philanthropy drive.

Last year, Chinese citizens donated 70 billion yuan ($10 billion) to charities compared with 54 billion yuan in 2009, Agence France-Presse reported, quoted the official Xinhua news agency.

The country is still new to philanthropy and the China Development Brief, a prominent publication, said local charities’ “lack of transparency and mechanisms to track donations” remained major stumbling blocks, AFP said.

The China Daily said as a result of the uproar over Ms Guo, 90 per cent of people who took part in an online poll the newspaper conducted indicated they would not donate to the Red Cross of China any more.

The Financial Times noted: “There is also a deeper problem in the lack of trust in a society whose wealthiest members often get rich through government connections.

“The idea that people would, out of the goodness of their hearts, give money away is scoffed at.”

Sourced & published by Henry Sapiecha

The 5 cheekiest Con Artists

of All Time

By: Kristi Harrison

February 13, 2008 567,830 views

Let’s give the devils their due. Yeah, they’ve screwed over thousands of innocent people. But some of them had balls the size of hot air balloons and for that, we must salute them.

#5.
Charles Ponzi

Charles ‘The Ponz’ Ponzi is, quite simply, one of the greatest swindlers in American history. The originator and copyright holder of the piece de resistance of his career, the “Ponzi Scheme,” Ponzi also boasted old-timey movie star looks and a smirk that could charm the pants off of the Pope.

Much like Vito Corleone, Ponzi came to America as an impoverished Italian immigrant. Also like Vito Corleone, Ponzi decided early in the game that his many talents should not be squandered working in a opium pipe-making factory, or wherever they sent the Italians to work back then. Keep in mind that the man had already served time in Canada, hiding it from his family by telling them he had gotten a job there. Once he was out and in the states, he created his own little plan for living the good life.

The deal was, back then you could get these coupons that could be redeemed for stamps in other countries. Ponzi noticed that back in Italy these coupons cost way less than the stamps in America. So, he figured it was still 1918 and there were a lot of retarded people around, and that he could buy like a billion of those coupons in Italy and then redeem them for the stamps here. He made 400 percent profit on each transaction, and didn’t produce a damned thing.

Ponzi thought, well, shit, why isn’t everybody doing this? So this smooth operator convinced thousands of people to invest in his totally legit business, the Securities Exchange Company, and by 1920 was making $250,000 a day.

Audacity Factor:
Remember those coupons Ponzi was supposed to be buying with all this investor money? Yeah, he wasn’t. There wasn’t even a thousandth as many of the coupons in existence as the investors had given him the money to buy. He was basically just taking the investor’s money, piling it up and swimming around in it like Scrooge McDuck. It was estimated that millions of dollars had passed through his hands and he had nothing to show for them but his awesome mustache.

Still, when an angry crowd of investors gathered outside his office, he walked right out there, smiled, gave them some money and offered coffee. That’s the kind of guy he was.

He was eventually sentenced to prison, at which point he jumped bail, moved to Florida and went right back to scamming. When the cops came for him, he changed his appearance, stowed away on a boat and tried to leave the country. Finally, he got caught and went to jail.

The thing is, before that whole mess, Ponzi had come up with another idea. Back in 1918 he had tried to publish this book of business listings, where the businesses would pay to get listed and then people would use the listing to decide where to shop. Everyone told him the idea was retarded and he dropped it, plunging into a life of fraud instead. Later, somebody else would get rich on a thing called “The Yellow Pages.”

#4.
Benny Hinn

For you poor unfortunates uneducated in the ways of evangelical fundamentalism, Benny Hinn may be off your radar. Which is too bad. Because Benny Hinn is king of the Muppet-Showesque monstrosities known as faith healers. He’s so good, that he makes you forget about their supposed real king, What’s His Name of Nazareth. “So what?,” you may ask. “So he’s a faith-healing evangelical–I’ve got dozens of those under my bed. What’s the big deal?”

Mr. Hinn has built his ministry on a few tenets. One is his gift of prophecy. Here are just a few of his better known predictions:

God will kill all the homosexuals by fire;
Castro will die in the 1990s;
An earthquake would destroy the American east coast, also in the 1990s;
JESUS CHRIST HIMSELF was going to make a personal appearance at Hinn’s African crusade.

Needless to say, Jesus had a great deal going on that day and couldn’t make it. Followers have still donated millions to Hinn, who lives in a $10 million house and drives a Mercedes SUV. Apparently there’s, like, some kind of law against asking people to donate money to God and then buying bling with it instead, because the Senate Committee on Finance launched an investigation late last year. If they have hearings it’ll be interesting to see if Jesus makes an appearance.

It takes a special kind of guy to make this list. False prophesies and wicked combovers just aren’t going to cut it. But Hinn is no ordinary minion of Satan. Observe:

As you can see, Hinn performs his miracles by slapping old people to the ground, and then apparently doing a Jedi force-push against those who come to their aid. Fat people, tiny deaf orphan children, epileptic mulleted types, anyone is fair game for the wrath of Hinn, who then swaggers around those passed out fools like Ali demanding a rematch.

Audacity Factor:
In 2006 this pimp sent out this letter to his followers:

… we have recently taken delivery on our Gulfstream G4SP plane, which we call Dove One. I have enclosed a beautiful photo-filled brochure to explain more about this incredible ministry tool that will increase the scope of our abilities to preach the Gospel around the globe. Now we must pay the remainder of the down payment, and I am asking the Lord Jesus to speak to 6,000 of my precious partners to sow a seed of $1,000 in the next ninety days. And I am praying, even as I write this letter, that you will be one of them!

Walking may have been good enough for Jesus Christ, but it’s not good enough for Benny Hinn. Somebody, please, buy this man a Dove One. Better yet, go ahead and purchase him a yacht, a subway line, the Orient Express, some rickshaws and a few of those elephants domesticated for human transportation. ANYTHING to get his egregious face-slapping ministry to the people.

Hell, maybe he’s not a con man after all. Watch that video, the man’s worth every penny.

#3.
The Fox Sisters

Don’t let the sexy name fool you. Kate, Margaret and Leah Fox were leading proponents of the Spiritualist Movement of the 19th Century, their primary qualification for that job being that they were completely full of shit.

The younger two, Kate and Margaret, were only 10 and 12 when they convinced their idiot parents they could talk with a household ghost through a system of knocks and raps. The girls would snap their fingers and the ghosts would respond, much to the amazement of all the dumbasses who populated the world in the 19th century.

By the time big sister Leah got in the act, the three tricky Foxs had earned an international reputation as ghost-talkers and were making epic amounts of bucks with their other-worldly seances. Unfortunately, the sisters also gained a thirst for the hooch in their old age and were eventually exposed as fraudulent drunks who were using their toes to simulate the sounds from the great beyond, a trick that, in retrospect, doesn’t seem it should have fooled the family dog.

Audacity Factor:
Knuckle cracking? Really? Anyone who makes their living by popping appendages and is not a prostitute, side-show freak or chiropractor, deserves some mad props. And they didn’t just say, “Hey y’all? You hear that? I bet the house is settling or something.” No. These girls went through the trouble of creating a systematic knuckle cracking language to communicate with their pretend spirits … and kept it up for almost 40 freaking years. A scientist (William Crookes) studied the sisters and declared them to be the real deal.

Well, we at Cracked have studied the people in the 19th century and declared them all to be mildly retarded.

One of the sisters eventually came clean when a reporter offered them $1,500 in beer money to spill the secret. The money was quickly pissed away and all three of the sisters died in poverty and were buried in pauper’s graves. Even Charles Dickens couldn’t have imagined a better ending for the Fox Sisters.

#2.
Gregor MacGregor

Gregor MacGregor made his fortune and reputation in the early 1800s when he convinced hundreds of investors that he was the prince of the fictional country of Poyois. Not only did Gregor MacGregor gain the trust and hard-earned pounds of his eager would-be colonists, he also created a guidebook detailing the geography and abundant natural resources of his island off the coast of Honduras.

By the time his 250 investors had sailed to the vacant patch of water where their island should have been, MacGregor was already rounding up his next group of colonists, this time from France. Undeterred by the eventual deaths of 200 of his first settlers, MacGregor went through the trouble of drafting a Poyois constitution naming himself as head of the republic. Even after his trial and conviction for fraud, this magnificent man continued selling non-existent land and stock to European nobility.

Audacity Factor:
The real downfall of Jim Jones and Koresh and those Heaven’s Gate fools was that they believed what they were peddling. Not Prince Gregor MacRadical. After the few survivors made it back from their boat trip to nowhere, most still couldn’t believe MacGregor had lied to them, standing up for him in the papers and basically blaming the island for not being there. They simply could not comprehend that any one man could have balls that huge. They were wrong.

#1.
Frank Abagnale

By the age today’s emo kids are tripping over their first curbs on account of the hair in their eyes and the loss of circulation from their too-tight pants, Mr. Abagnale had collected over $40,000 from various banks across New York City. By the time some of you were hoping to unlatch your first bra, and for most of you, much much sooner, the man had faked his way as a university professor, lawyer, pilot and doctor. Pretty much all the occupations Cracked writers and readers are barred from entering.

By the time you and I were sleeping through our summers at home from college, whining about how boring our hometowns were and “Why can’t you stay off my case, I’M ON VACATION,” Frank Abagnale had already been caught by French police, served jail time in France and Sweden, was extradited to the United States, escaped from a moving damned airplane and nearly orchestrated a perfect getaway.

That’s the sort of thing that inspires Hollywood to make movies about you, starring Leo DiCaprio and Tom Hanks.

Audacity Factor:
Once Abagnale was imprisoned, he convinced his guards that he was actually an undercover prison inspector and that he needed the privilege of having an unsupervised meeting with his FBI agent contact. Yeah, they bought it.

After finally serving five years in prison, Abagnale was released if he cooperated with the government in detecting fraud. Not one to miss a golden opportunity, he turned his specialized knowledge into a legitimate money-making machine, opening a wildly successful fraud consultation business.

This one has a happy ending, as once his businesses took off, he used his honestly-earned millions to repay those he defrauded over the years. Of course, there’s always the chance that this whole phase of his life is also a scam somehow, one so convoluted that the world won’t figure it out until Abagnale is leaving orbit in a spaceship full of all of the world’s gold.

Sourced & published by Henry Sapiecha