The Nuns Who Gambled And Stole Half A Million From A Catholic School, And More Of The Week's Best Scam Stories
CONS AND PROS

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It seems like we're living in a society that's full of scams, hoaxes and questionable practices committed by individuals or corporations these days. Some scams are purely horrible, some are more incredible than egregious, and some are just really, really weird.

Welcome to Cons And Pros, a weekly roundup of the most outrageous scam stories we have come across this week.

Thou Shall Not Steal

The imagery of gambling nuns is already a peculiar one enough on its own, but add to that imagery two nuns who stole money from the school they worked at to fund their gambling habits and you get one helluva weird scam.

According to GQ's Sean Flynn, Sister Mary Margaret and Sister Lana Chung allegedly misappropriated the school funds of St. James Catholic School in Torrance, California to support their penchant for gambling. The amount of money they stole — measured to be around $500,000 — seems especially egregious considering how Sister Mary Margaret, who ran St. James, often claimed that the school had no money and was operating on a shoestring budget.

"Our education was affected," a girl who graduated from St. James in 2015 said at the meeting. "We sat there day after day in class being berated verbally on what to do, what to say, what to wear, and how to act by Sister Mary Margaret and Sister Lana, who were telling us we did everything wrong," she said. "Yet they were over here committing federal crimes and stealing our parents' hard-earned money for their personal benefit.

"I was called a liar," she said, "by a woman who's the biggest liar I've ever known."

[GQ]

'Operation Meltdown'

It's not every day that we get a scam that involves ice cream trucks, but this week we were treated with the news that around 50 ice cream trucks in New York City were seized for participating in a traffic fine-dodging scam.

Instead of paying up the fines that these trucks had racked up over the years — which has amounted to over 22,000 violations and a staggering $4.5 million in fines — the owners would transfer ownership of the trucks to fake companies to avoid paying.

"It's not only the money, it's the deterrence factor," New York City Sheriff Joseph Fucito said. "Summonses act as a deterrence. If there's no deterrence, then there's no reason to follow any of the traffic laws."

The owners avoided paying fines by transferring ownership of the trucks between dozens of fake companies. They were caught when the Department of Finance tried to collect those debts and learned the companies didn't exist.

[CBS New York]

Putting The Artist In 'Con Artist'

From the 1930s to the early 1950s, Peter Christian Barrie had a remarkable trick that ensured he and his backers would win on the racetrack: he would enter a fast horse in a race disguised as a slow horse. 

And how did he pull off such a disguise? With great artistry and lots and lots of bleach and dye.

The art of the con is in making the track stewards and the bettors believe the winner really was the slow horse having an inexplicably good day. That's where Barrie came in. He was a horse painter, perhaps the best in the world. His tools were simple: bleach, ammonia, bandages, silver nitrate, and henna in shades from blood to chocolate. He could turn a bay with a white star on its face into a dappled gray, and he could do it so convincingly that the gray's last trainer would swear it was his horse.

[Narratively]

The Grindr Grifter Who Stole His Dates' Identities

The story of Daniel Spence, a conman who bilked his friends and romantic partners of hundreds of thousands of dollars, is a perplexing one. His methods of financial exploitation were numerous: he would convince his victims to invest in a fake trust fund for asbestos victims, steal their social security numbers and credit cards or use their identity to rack up more debt, and in one case, even steal a $6,000 diamond ring while staying at a friend's house.

One of the interesting wrinkles in Spence's story is that he almost acquired the Brooklyn-based Northside Media Group after becoming interested in the company through a Grindr date. Spence was eventually caught by the police before he had the chance to officially take over the company, but what a weird turn of events that would have been if he had not.

While his crimes have largely been uncovered, Spence's motive remains a mystery:

More than anything, like almost everyone else I spoke with as I reported this story, they couldn't figure out Spence's endgame. Had he been planning to use the Northside deal to obtain a bank loan, disappear and pop up in another state with his mother? Was he after Stedman's identity? Or was it all just a delusional ego trip—the fake asbestos ad guy reinventing himself as the fake badass magazine owner?

[Observer]

I Use My Learning Disorder Diagnosis To Cheat On Tests

A college student diagnosed with auditory and visual sensory processing disorder and ADHD recounts how she or he uses a special testing room to cheat on exams:

The privacy of that special room gave me a great opportunity to start cheating. When I take a test, I have to check my bag and leave my phone on a rack in the hallway before going into the room with a computer that has no internet access. But what I do is print out a study guide and notes and stick everything under my shirt or under my coat or a denim jacket with internal pockets. I've snuck in 30 pages of notes and even a full textbook this way.

[Vice]

The Things We Do For Truffles

In his new book "The Truffle Underground," Ryan Jacobs documents the troubling lengths people go to in order to thrive in the truffle market, a market estimated to be worth around $330 million in Europe alone. To capitalize on the high value of truffles, there are people who steal and people who try to pass off lesser-valued truffles as highly sought-after species. There are also people who have killed for truffles.

Remo Damosso, a veterinarian with a practice near Alba, estimated he sees three or four poisoned dogs per week during the truffle-hunting season from September to December, killed by everything from rat poison to shards of glass. Truffle-hunting dogs are also regularly stolen.

[New York Post]

And when it comes to fraud, even some of the biggest truffle companies in the world are suspect:

In 1998, one of the world's largest truffle companies, Urbani Tartufi, got caught mislabeling their produce when Italian officials discovered 47 tons of Chinese truffles in the company's warehouse.

They had been purchased for $20 per kilo and looked nearly identical to European black winter truffles, which, at the time, were worth about $400 per kilo. If the company were to successfully sell all 47 tons of Chinese truffles they would have made roughly $18 million in fraudulent profit.

[New York Post]

<p>Pang-Chieh Ho is an associate editor at Digg.</p>

MY BIG FAT SCAM WEDDING

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Update: Further evidence and screenshots has proven that this story was likely a marketing stunt. Read more here for BuzzFeed's reporting on this.

Previously: Look, stuff happens; the best laid-out plans of selfish brides often go awry, etc. But the ethical thing to do if you need to cancel a crowd-funded wedding would probably either be to return people's money, or to ask if it's alright to save it for a redo.

One of many things NOT to do: keep the money, use it for a vacation (it's not a honeymoon if you didn't get married) and other undetermined purposes, and then ask your generous ex-guests to give you gifts through your registry. A series of Facebook screenshots posted to Reddit (as always, take things with a grain of salt), tells the story:


Naturally, guests — the people who thought they were contributing to a wedding fund, only to find that they were instead funding the lifestyle of a woman not having a wedding anytime soon — were pissed. And, unsurprisingly, the bride displayed a phenomenal lack of self-awareness:


Not to split hairs, but "rescheduling" a wedding without actually setting a new date is effectively a cancellation. Lady, give 'em their money back.


[Via Reddit]

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Scammer Deepfakes CEO's Voice To Trick Subordinate Into Transferring $243,000, And More Of The Week's Best Scam Stories
CONS AND PROS

· Updated:

​It seems like we're living in a society that's full of scams, hoaxes and questionable practices committed by individuals or corporations these days. Some scams are purely horrible, some are more incredible than egregious, and some are just really, really weird.

Welcome to Cons And Pros, a weekly roundup of the most outrageous scam stories we have come across this week.

The Original Ponzi Scheme

While we're all familiar with the phrase "Ponzi scheme," a scheme that promises high rates of return to its investors and pays profits to earlier investors with money from more recent investors, not many of us are aware of the story of Charles Ponzi, the man whom this particular type of scam is named after.

Michael Durbin pulls back the curtain on the life of Ponzi with his article on Damn Interesting and details how the first Ponzi scheme from Charles Ponzi began. Initially, what Ponzi was trying to pull off was a form of arbitrage involving the International Reply Coupon, a coupon meant to simplify the process of international mail. Ponzi, however, soon met a roadblock when he ran out of funding.

At the end of February 1920, Ponzi owed $2,655 to Giberti's initial investors—their $1,770 capital plus $885 interest. Ponzi had no arbitrage profits with which to pay them. But he had money from more recent investors, so he simply used that, dipping into funds from Peter, as it were, to pay Paul. He claimed the gains were legitimate, that an associate named Lionello Sarti had gone to Italy and returned with large quantities of coupons, along with the fortunate news there were plenty more to be had. It's very likely Sarti never existed—nobody other than Ponzi would ever report meeting the man. Ponzi's satisfied investors didn't care as long as they were getting paid.

Damn Interesting

[Damn Interesting]

From CEO To Fake CEO

As deepfakes continue to seep uncomfortably into our lives, here's another example of why we have to be more wary of this AI technology:

The CEO of an energy firm based in the UK thought he was following his boss's urgent orders in March when he transferred funds to a third-party. But the request actually came from the AI-assisted voice of a fraudster.

The Wall Street Journal reports that the mark believed he was speaking to the CEO of his businesses' parent company based in Germany. The German-accented caller told him to send €220,000 ($243,000 USD) to a Hungarian supplier within the hour. The firm's insurance company, Euler Hermes Group SA, shared information about the crime with WSJ but would not reveal the name of the targeted businesses.

[Gizmodo]

All Beware The Con Queen Of Hollywood

And speaking of using a fake voice to dupe marks, who can forget the infamous Con Queen of Hollywood, an imposter who has posed as some of the most powerful women in Hollywood to scam freelancers in the industry and whom recent investigations have revealed to likely be a man?

While the Con Queen remains at large, Julie Miller's Vanity Fair article offers insight into the reasons why the Queen has been so hard to catch:

Kotsianas, who has spoken to over 100 victims, says the reason it's taken so long for authorities to zero in on this con artist is not so much because he's hard to find. "It's a very complicated case jurisdiction-wise," she said. "And it's the type of case that can fall between the cracks of law enforcement, in that even though it's really high-profile names being impersonated, the dollar amounts of the individual victims is really not that large in terms of what the FBI typically wades into."

[Vanity Fair]

The Walmart In No-Man's Land

While not necessarily a scam, Quartz's reporting of Walmart's tax dodge scheme, which involves the company inventing a "fictitious" Chinese entity to avoid paying $2.6 billion in taxes certainly counts as a dodgy corporate practice.

Walmart's arrangement, internally named "Project Flex," revolved around the company's payments to its Chinese subsidiary in Shenzhen, from which it sources many of the billions of dollars of Chinese goods it imports every year, the former executive wrote in a presentation explaining it. To avoid paying tax in either the US or China, Walmart created a "tax nowhere" entity that neither country would claim jurisdiction over, according to the former executive.

[Quartz]

And if the IRS is able to reclaim the $2.6 billion Walmart owes, it will be the second-largest tax repayment in US history (the honor of the first goes to GlaxoSmithKline's $3.4 billion settlement with the IRS in 2006).

Pang-Chieh Ho is an Editor at Digg.

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