Whitepaper: Scamology

OLOGY OF THE SCAM

It's March 5th, 2021 and Good Morning America is playing. In it, Anna Sororkin sits with a confidence you don’t expect from someone who has just spent four years on Rikers Island, some in solitary confinement. When asked by a reporter, “many see you as the ultimate scammer. Are you?” Anna replies, “No. Absolutely not.”

Well, if you were the ultimate scammer... isn’t that exactly what you would say?

I genuinely believe most of us are honest people. I also genuinely believe some are not. For those who fall into that second category, one can either be gifted at disingenuity, the deliberate faking of credibility, or rather bad at it. In other words, scamming is a craft.

Sorokin, who renamed herself "Anna Delvey," is notably skilled at it. First, she posed as a German heiress, claiming to have a more than $60 million bank account overseas. But that’s really only half of
it. She also faked her way into a high-end life among New York's elite, complete with private flights, boutique hotels and designer goods. When she didn’t have money to pay for said goods, she would make rich friends, hang with them for a while, then when it came time to pay the bill she would have trouble transferring money.
“I’ll get you back once I just...figure this out,” I imagine her saying over her phone while the “friend” happily swipes their card. “No problem, just Venmo me.” Nobody she finagled said they saw the red flags at the time, which I still don’t understand. Eventually, she was busted for falsifying bank documents.

So how did she do that? Most of us could pick up on that scam, right? So what did she do to make it successful? What makes scammers like Delvey so good at being scammers?

And most of all, how can we spot when our trust or the trust of someone we love is being taken advantage of?

While there is no dedicated field that dissects the craft of scamming to date, we can pull from the psychological, the historical, the anatomical, the linguistic, mystic, and artistic worlds to learn more about Scams. Call it Scamology.

HERE ARE A FEW THINGS TO LOOK OUT FOR:

1. NAME DROPING

You have come across this, no doubt. It’s something that Anna was particularly good at. While not explicit research on name dropping, in a paper published in the journal Organizational Behavior and Human Decision Processes, researchers explored how trust gets non-consciously stimulated. Turns out, people are more likely to trust you if you even VERY loosely associate yourself with someone they trust. Subjects, after seeing subliminal presentations of people they trusted, trusted anonymous strangers with their money 50% more than people who saw similar presentations of names they didn't like. Conveying status cues can be another way of doing this.

2. SCIENTIFICNESS

In a paper in the Journal of Public Understanding of Science, titled “Blinded with Science,” authors Aner Tal and Brian Wansink show that trivial pieces of data like nonsense scientific equations made subjects trust a piece of information more. Actual increase in comprehension had a much less drastic effect on a subjects trust of the information. The data doesn't even have to be nonsense. The framing of data can be a tool to massage the truth. Ted Cruz for example, repeatedly touts the claim that ocean surface temperatures had fattened from 1998 to 2015. The thing is, 1998 was a really hot year, so drawing that frame makes the curve appear flat. Expand that frame one year forward or back, the trend in global surface temp goes upwards again.

3. USE COMMON SENSE

George C. Parker, a 20th century New York City conman, would wait by the ports for tourists and newcomers – his particular skill was being able to spot those truly susceptible to scammery. When he identified a subject, he would approach then make an absurd offer: the total sale of the Brooklyn Bridge for cash. As Luc Sante, author of the book “Low Life: Lures and Snares of Old New York” wrote, “The oddity of the thing today is not that there might have been con artists ready to sell the bridge, but that there would have been suckers both gullible enough and sufficiently well-heeled to fall for it.”

4. GREAT PLANS ARE HARD TO SPOT

Then there are the grifters who prey on the powerful – and if you are going after the powerful, it’s best
to have a plan.

The following scam ranks as the smartest plan I’ve ever heard of. Imagine, walking into a casino, taking $100,000 out on a line of credit, then immediately cashing the chips, and leaving town. Okay, it wasn’t that simple, but that’s essentially what the Roselli brothers did in the late 90’s, early 2000’s. They would steal the identities of people with high credit and establish a line of credit at casinos all over the world. Then, to avoid getting caught, they would go into a casino, each get $50,000, and employ a strategy called matched betting. It can get really complicated, but what it means is that one brother would hedge on the other brother so one brother would always get chips and one would always lose chips, but no matter what, they always had the same number of chips between the two of them. They ran this operation every single weekend for five years. They still have not been found by the authorities.

5. FORGERY

Active in the Florentine art circles at the beginning of the Renaissance, classical sculptures were having their moment. Rather than buying from living artists, collectors wanted something to be rediscovered. Funny how that works out. Struggling to support himself, a young Michaelangelo got involved in an art forgery, selling fake antiquity he had sculpted and then aged artificially. When a Cardinal who had bought the work found out he had been duped, he found then invited the young artist to Rome having noticed the artistry behind the forgery.

6. AFFECTED VOICE

Think of someone you know with a commanding voice. What does the presence of their voice feel like – sound like? Is it brighter or darker, higher or lower, louder or softer. Researchers at Princeton asked 320 subjects to listen to 64 different people say the word “hello” and rate them based on one of 10 personality traits. Turns out, the participants generally agreed on which voices were trustworthy and which were not—even though the voices played for less than a second. That means, whether we are right or wrong, we all agree on who sounds more trustworthy, simply by the timbre of their voice. Perhaps this is why many famous scammers have altered their voice in some way – think Elizabeth Holmes, the fraudulent tech startup mogul with an allegedly adopted baritone voice.

Then there is phishing, vishing, and smishing – email scams, phone scams, and sms scams, respectively. Humans really are expert communicators in all forms, and by proxy most of us are sophisticated scam dodgers. If you want to know whether you can or cannot trust a source, check out Fernanda’s Flowchart.

7. WHEN IT'S TOO GOOD TO BE TRUE

While he didn’t invent the pyramid scheme, Charles Ponzi was such a prolific scammer that he got the scheme named after him anyway. Kind of like how we call a tissue a kleenex. The story of Ponzi is a Russian doll of scammery – a scheme inside a swindle. See, there were these things called IRCs – basically, you can buy an IRC for the cost of stamps in one country then exchange it for stamps in another country. If these two stamp prices are different, you have an opportunity for profit. This is called arbitrage and it was (and still is somehow) legal. Definitely feels like a scam, though. He claimed a 400% profit margin, at a time when banks only had 5% interest. And he got his clients paid – first small ones, then bigger and bigger investments. It appeared to be working.

What the investors didn’t know was that Ponzi would have needed a ship roughly the size of the titanic to constantly be transporting all the postal coupons he would need for this operation. It was all really just a pyramid scheme. The basic premise of this kind of scheme is summed up in this biblical hypothetical: rob Peter to pay Paul. Essentially, incur new debts to pay off the old ones. Basically, Ponzi was taking the newer investor’s money and using it to pay off the older investors.

The lesson behind this – and all Ponzi schemes – is to question when things are too good to be true. That can be hard, though – as Cryptocurrency analyst Willy Woo says "The thing is, it looks like a Ponzi until it takes over as the new normal and changes the world."

It goes without saying that the most artfully crafted and dangerous scams are the ones that are hard to see. As a student of scamology, it's important you question everything you are capable of.