Why fraud feasors do not need to use OPSEC to protect themselves from individual victims

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Why fraud feasors do not need to use OPSEC to protect themselves from individual victims

Fraud is big business. We don’t mean small fraud; we mean BIG fraud, where hundreds of millions of dollars disappear.

In most cases it takes a large amount of effort to find out where the money went, because fraudsters go to a lot of effort to hide the money. It is not impossible to find the stolen money, but it takes special experience and skills in some very strange courts and places to effect a recovery in a major international fraud. There is only a small handful of attorneys equipped to deal with big international fraud, and only a small handful of international investigative firms equipped to locate the hidden assets.

But while criminals take a lot of care to hide their loot, they expend little effort covering up the actual fraud. You might also expect fraudsters to be skilled practitioners of OPSEC, shielding critical information that might reveal that they are crooks. But they really don’t. Why not? Because it simply isn’t necessary!

We know a man who decided, with the advent of computer dating, there was a need for quick and inexpensive background checks on prospective dates. He soon discovered that while there was a need, there was very little demand. His wife explained that people wanted to meet Prince (or Princess) Charming, and that a background check would spoil the illusion and kill the romance.

The same thing holds true with major fraud, where the process is not all that different from dating. When Martin R. Frankel stole $350 million dollars (ÆGIS July 1999) from a variety of sophisticated investors, including the Church (Fraudsters, including high yield investment promoters commonly prey upon religious people. They do not seek out people of a specific religion or denomination, just people of faith.), it was not his clever use of OPSEC that prevented investors from seeing obviously disqualifying red flags. It was, rather, the fact that the investors were looking for Prince Charming, even in a high yield investment program.

A simple way to avoid getting burned by high yield investment programs and other participatory frauds is to ask specific questions and look for specific answers, not answers that change the question, or answers that slip quickly into vague generalizations. Any time the investment professional tells you that how the yields are generated is a secret, or that the yields are somewhere near astounding, you have been given a clue, even a warning. But if investors, like prospective dating partners, are looking for a particular outcome (in this case inordinately high returns), red flags are invisible, or rationalized away.

While a quick call to us to exercise some appropriate level of due diligence can prevent the embarrassing loss of millions of dollars – sometimes by very sophisticated investors – it will also spoil the illusion and kill the romance. Which is why there is generally no need for fraudsters to make the effort made to hide their fatal flaw.

While a fraudster may not need to practice OPSEC, you do. If you think like your adversary – which requires you to recognize that you might have an adversary – you greatly reduce your likelihood of being victimized.

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