Bob Sullivan

Even in the age of AI hacking, the devil you know might still be the most serious threat. Depending on which data you pick, malicious insiders are responsible for between one-third and one-half of all hacks.

This is true in the world of scams, too. While international crime gangs get the headlines in scams, much elder fraud is committed by family members, neighbors, or live-in help.

I’ve long been fascinated by small-town crimes; I think they deserve more attention. After all, the vast majority of us will never have occasion to meet a Bernie Madoff. A bad actor with a nice office in your charming downtown?  That’s more likely, often because that nice man in the nice office might have banked decades’ worth of goodwill. Just like an employee who’s been onboarded.

I recently worked on a podcast about Burt Marshall, a man who financially terrorized a small town in upstate New York for decades.  A tax preparer and insurance salesman turned investment “guru,” Marshall took money from seemingly everyone — and everything — in town.  And when his Madoff-like Ponzi collapsed, even the fire department and local cemetery were victims.  You can hear the whole story at AARP’s Perfect Scam podcast, which I host.  

Marshall knew everyone in Hamilton, New York, a college town that hosts Colgate University. It seemed like he did everyone’s taxes in town. That gave him a privileged position. He knew everyone’s income, and he even knew how big their tax returns were.  “Why not invest that money with me?” Burt would suggest. He “guaranteed” investors an 8% annual return, backed by his ever-growing portfolio of rental properties stuffed with Colgate students. The returns were unsustainable; he could only pay when he got new investors, and when Covid hit, the cracks in Marshall’s empire were slowly revealed. By the time it came crashing down, Marshall had collected $90 million from nearly 1,000 local residents. After he pled guilty, they got back about 5 cents on the dollar.

Meanwhile, as you’ll hear in the episode, some victims had everything stolen from them — their retirement cash, their homes, their futures.  Even the local cemetery was nearly abandoned, showing Marshall’s crime cut so deep that victims couldn’t escape the consequences — even in death.

Burt Marshall isn’t unique; he’s far too common, really.  Last year, The Perfect Scam brought you the terrible story of Kota Youngblood. He wormed his way into a youth hockey community in Austin, Texas. After months playing the big man, buying team dinners, telling tall tales about his dinosaur head collection and his time in the Special Forces, Youngblood eventually convinced a set of families that they were at risk of execution by dangerous crime gangs. One family moved clear across the country based on his terrifying tall tales.  Others paid Youngblood for protection.  He was eventually exposed and convicted of wire fraud.

Both stories reveal the power of local connections. And they demonstrate the long game some criminals play.  Normal human beings couldn’t imagine keeping up a farce like that for a few hours, let alone several years. Often, criminals have nothing but time — at least until their time runs out.

My opinion is that these stories reveal something else about our human nature. Hope is the most lovely and vital of human characteristics.  But hope is often exploited by criminals.  The romance scam criminal who says over and over, “I’ll meet you in person in two weeks!”  The “financial manager” who promises you’ll get your money back next month.  Heck, the tech company that says its product will be ready next quarter.  All these people are counting on our natural, and wonderful, tendency to believe in the future.  Politicians have been living off promises and false hope since the dawn of — well, politics.  I would never want to tell any of you to abandon hope.  But consider this: If you lend $100, or a tool from the garage,  to a friend who promises you’ll get it back next week… and you hear “next week” for months and months…at what point do you just decide the money or the tool is gone?  That mental experiment might help you build some healthy guardrails around the promises you hear and the hope you give.

I hope you’ll listen to our two-part series, Bad Neighbor, at The Perfect Scam.