Famous fraudsters, con artists and scammers
The Merriam-Webster online dictionary defines "fraud" as the "intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right."
But those who have engaged in fraud successfully probably would say there's a great deal more to it than that. Capable con artists combine psychology and magic to identify the right mark, devise the best deception and, most important, gain their victim's confidence (that, after all, is the origin of the term).
Read ahead to see CNBC.com's list of famous fraudsters, con artists and scammers, many of whom remain legends.
By Daniel Bukszpan
Posted 1 Oct. 2013
CNBC follows the money trail in search of the most wanted white-collar fugitives."American Greed: The Fugitives" airs Thursdays at 10 p.m. ET.
Charles Ponzi came to the U.S. from Italy in 1903. In 1919, he established the Securities Exchange Co., which promised investors huge profits in just a few weeks. They were unaware that none of the funds were actually invested and that the profits came entirely from newly invested money. Thus, the Ponzi scheme was born.
Ponzi was charged with 86 counts of fraud in 1920 but pleaded guilty to only one. He died in 1949, but the swindle that bears his name lives on.
Victor Lustig was a hustler whose ruses included a 1925 plan to sell the Eiffel Tower. Presenting himself as an official of the Ministry of Posts and Telegraphs, he told French scrap metal dealers that the Paris landmark was to be dismantled. He took bids from the dealers and selected Andre Poisson as the "winner." When he discovered that he had won nothing, Poisson was too humiliated to even report the incident to authorities.
Lustig made his way to the U.S., where he was ultimately arrested on counterfeiting charges. He pleaded guilty and was sentenced to 20 years at Alcatraz.
In her 1992 book, "Fakes, Frauds & Other Malarkey," Kathryn Lindskoog attributes a list of 10 instructions for con men to Lustig. They include these gems: "Wait for the other person to reveal any political opinions, then agree with them," and "Never get drunk."
Marc Stuart Dreier
Marc Stuart Dreier's law firm had a client list that included such high-powered clients as Jay Leno and Jon Bon Jovi. If you've forgotten about Dreier, it's because news of Bernard Madoff's Ponzi scheme broke just five days after Dreier's.
The lawyer's scam came crashing down in 2009, when he was convicted of defrauding investors to the tune of $700 million. He was sentenced to 20 years in prison, saved from a harsher punishment when Federal District Court Judge Jed Rakoff compared his crime to that of Madoff, who got 150 years.
"Mr. Dreier is not going to get much sympathy from this court," Rakoff said. "But he is not Mr. Madoff from any analysis."
Jay Mitchell Huntsman was an orphan who grew up in a commune, and went to Palo Alto High School in 1986 and joined the track team. One problem: Jay Mitchell Huntsman had died in 1969 at just two days old. His identity was stolen by James Hogue, a 26-year-old multiple felon who was 10 years older than he claimed.
He enrolled in Princeton University in 1988 under the name Alexi Indris Santana, whose fictional pastimes included running barefoot in the Nevada desert. A former Palo Alto High School classmate spotted him and alerted school officials, and Hogue eventually pleaded guilty to theft by deception for collecting a $22,000 scholarship from Princeton.
In 2007, Hogue pleaded guilty to a felony theft charge in Telluride, Colo., in exchange for a relatively light sentence of 10 years.
George C. Parker
George C. Parker's exploits made him a fixture of mainstream culture and gave rise to the saying, "If you believe that, I have a bridge to sell you."
According to The New York Times, his expert document forgeries allowed him to persuade gullible tourists to buy city landmarks, including Grant's Tomb, the Statue of Liberty—and the Brooklyn Bridge. Parker "sold" the bridge twice a week for several years, according to The Independent of the U.K.
It all eventually caught up with him, though. He received a life sentence in 1928 and died at Sing Sing prison in upstate New York after eight years of incarceration.
Irene Silverman was an elderly woman who rented out apartments in her Manhattan townhouse. In 1998, Kenneth Kimes, a grifter who operated with his mother, Sante Kimes, became one of her lodgers. According to The New York Daily News, the pair decided to swindle Silverman out of her Upper East Side property.
Silverman disappeared after a July 4th celebration; Sante and Kenneth Kimes were arrested a day later. Police found forged documents that included Silverman's Social Security number and a deed. Jurors convicted the two of her murder in 2000, despite the fact that her body had not been found. According to prosecutors, it was the first New York City murder case to result in a conviction without a body, a confession, or eyewitness or forensic evidence.
In 2004, Kenneth told a Los Angeles jury in a separate case that he and his mother had killed Silverman and dumped her body in Hoboken, N.J.
''The more arduous and the more complicated it got, the more desperate we became, and the more morbid-minded we became,'' he said in the court transcript, recalling that Silverman had become increasingly suspicious of him. ''We wanted to kill her.''
"Matt the Knife"
The official website of "Matt the Knife" describes him as a "mentalist, magician, and speaker." However, a deeper investigation of his website, specifically the Lecture page, reveals that in his youth, he was also a "Grifter, Card Sharp (more commonly known as a Con Man and Card Cheat) [and] a pickpocket."
Now fully reformed, "Matt the Knife" works with law enforcement and private security firms, teaching the tricks of his former trade to the people trying to stop others from using them. He discusses tactics and methods, including those he once used, in speaking engagements across the country, such as the one included in this YouTube video.
The entertainment industry can provide creative types with ups and downs, and writer Steven Kunes can tell you that from personal experience. He wrote screenplays for the popular television show "The Love Boat" and in 1992 sold the screenplay for a proposed movie called "First Comes Love" for $1.2 million, although it wasn't made.
A decade earlier, Kunes had attempted to sell People magazine an interview with the notoriously reclusive author of "Catcher in the Rye," J.D. Salinger. The interview was never published and in fact never took place. Kunes had never met Salinger, and according to The Ottawa Citizen, Salinger sued, settling the case on condition that Kunes would be "permanently enjoined from representing by any means that he is associated with or ever met Salinger."
According to The Santa Barbara Independent, Kunes succeeded in selling a fake interview with "Margaritaville" singer Jimmy Buffett to the now-defunct Santa Barbara Daily Sound in 2007. His luck finally ran out in 2011, when he was arrested for talking a friend into putting $2,000 into a movie for which there was no deal. He was sentenced to four years in state prison last year for that crime as well for forging about $7,000 worth of checks.
Steven Jay Russell
Steven Jay Russell was the subject of a 2009 movie, "I Love You Phillip Morris," which starred Jim Carrey as Russell and Ewan McGregor as the titular Phillip Morris. The two met and fell in love in prison. Upon their release, Russell vowed to give his lover an extravagant lifestyle, so he got a job as chief financial officer of a medical insurer based almost entirely on a trumped-up resumé.
Russell used his position to embezzle $800,000. He was found out and sent back to jail, with bail set at $950,000. In a breathtaking move, he impersonated a judge and called the county records office to order the bail be lowered to $45,000. Again he was discovered and arrested.
Today he is in the Allan B. Polunsky prison in West Livingston, Texas, thanks to convictions on one count of theft, one count of aggravated theft and two prison escapes, according to the Texas Department of Criminal Justice. His sentence ends July 12, 2140.
Infomercial host Kevin Trudeau has written diet books railing against a shadowy "they," including "Natural Cures 'They' Don't Want You to Know About" and "The Weight Loss Cure 'They' Don't Want You to Know About."
Before becoming an author, Trudeau had several run-ins with the law, which culminated in guilty pleas in 1990 for depositing $80,000 in bad checks and in 1991 for credit card fraud.
His problems didn't stop after he became a health guru, though. Trudeau promoted dubious diet and health products, prompting a 1998 lawsuit from the Federal Trade Commission that resulted in a court order for him to pay $500,000 in consumer redress.
In 2003 Russell was charged with violating that order by claiming in infomercials that a product called Coral Calcium Supreme could cure cancer. He had to pay $2 million in consumer redress and was banned from appearing in infomercials (except those that promoted only his books).
Last month, he was jailed by U.S. Judge Robert Gettleman for failing to pay a $38 million court-imposed fine levied in 2009 for falsely characterizing the content of one of his books in an infomercial. According to the Associated Press, he was released after a single day.
American Greed: The Fugitives
A new spinoff series that focuses on active cases of alleged white-collar criminals, accused of orchestrating elaborate strategies to dupe investors and evade capture. Each episode features interviews with law enforcement, prosecutors and victims, all sharing the goal of bringing these fugitives to justice.