There's a saying among swindlers that it's not the scam that counts, it's the sell. Judging from the number of arcane and often outlandish schemes that have been employed to separate otherwise prudent people from their money, the saying would seem to reflect reality. The evidence is that if people can be made believers, they can be sold practically anything. Consider several of the ways in which hustlers of phony investments have won the confidence of persons whom they planned to victimize.

The Old-Fashioned Ponzi Scheme

It's become one of the oldest and most often employed investment schemes because it's proven to be one of the most lucrative. While there are innumerable variations, here is how a person we will call Frank C. practiced it. At the outset, Frank approached a relatively small number of influential persons in the community and offered them the opportunity to invest--with a guaranteed high return--in a computer-generated program of arbitrage in foreign currency fluctuations. To be sure, it sounded high tech and sophisticated but Frank had his eye on sophisticated and well-heeled victims.

Within a short period of time, he approached and sold the scheme to still other investors--then promptly used a portion of the money invested by these persons to pay large profits to the original group of investors. As word spread of Frank's genius for making money and paying profits, even more would-be investors anxiously put up even larger sums of money. Some of it was used to recycle the fictitious profit payments and, like a pebble in the water, the word of fast and fabulous rewards produced an ever-widening circle of eager investors. And more money poured in.

The Infallible Forecaster

Jim L. (among his many aliases) had a full-time job in the daytime, but with assets that consisted only of a phone, patience and an easy way of talking he managed to parlay a nighttime sideline into an ill-gotten fortune. The routine went like this.

Jim would phone someone we'll call Mrs. Smith and quickly assure her that, "No," he didn't want her to invest a single cent. "Never invest with someone you don't know," he preached. But he said he would like to demonstrate his firm's "research skill" by sharing with her the forecast that so-and-so a commodity was about to experience a significant price increase. Sure enough, the price soon went up.

A second phone call didn't solicit an investment either. Jim simply wanted to share with Mrs. Smith a prediction that the price of so-and-so a commodity was about to go down. "Our forecasts will help you decide whether ours is the kind of firm you might someday want to invest with," he added. As predicted, the price of the commodity subsequently declined.