Master of Deception

Police veteran Dennis Marlock has written the book (several of them, actually) on scams, cons, frauds -- all shapes and sizes of street-level deception. Which makes him an expert witness to what's gone wrong in the executive suites of corporate America. Does everyone lie? Aren't we too smart to get conned? Some honest talk about dishonest business.

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 cliché, "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. Contact Dennis Marlock by email (fraudtech@justice.com).

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