Laurie Schneider, alleged "Ponzi princess," NY Post
As we rounded up our first group of inductees, we knew who was missing. We have profiles of con artists from the 1860s and the 1960s. We have crooks from Brooklyn and Sweden. We have pastors and CEOs. But we don’t have a single woman in the Hall of Infamy. Sure, women figure prominently in these stories. Some of them are pretty interesting, like the long-lashed Tammy Faye, who was married to Jim Bakker. One woman – Betty Payne – ended up behind bars for helping her husband run his con. But, like the female characters in a blockbuster action film, these women are peripheral. They didn’t engineer the cons; they played supporting roles.
So where are the women con artists? Is it lack of opportunity – a kind of criminal’s glass ceiling? Or maybe they’re better at not getting caught?! We’ve speculated and joked about the reasons; now we’re determined to feminize the Hall of Infamy. We’ve already received several nominations. The first arrived on the heels of the site’s launch in July, after Leah Garchik wrote about it in her San Francisco Chronicle column. She noted the popularity of the name “Bernie” amongst our con artists (Cornfeld, Ebbers and Madoff), as well as the absence of women. One of Garchik’s readers sent in a suggestion – a Long Island woman who allegedly ran a real estate-based Ponzi Scheme. I filed the woman’s name away in order to keep an eye on her: she was a “person of interest” – she wasn’t facing formal charges and she certainly hadn’t been found guilty in a court of law, which is a criteria for a contemporary inductee to the Hall of Infamy.
I was thinking about women con artists recently and did a quick search of the alleged con artist (Laurie Schneider) and the nickname she was given by Garchik’s reader: “Ponzi Princess.” To my surprise, I found an article that appeared just two weeks ago in the New York Post. The story included this quote from an investor, who claims to have lost $200,000 to Schneider: “Madoff is the king. She is like a little Ponzi princess. And no one has done anything about it.”
It appears that someone has done something about it; Schneider’s lawyer confirmed that the Brooklyn US Attorney’s Office has begun an investigation into the alleged scam, which is said to involve phony investments and the flipping of non-existent real estate. The alleged fraud may have taken in as many as 50 victims, who lost as much as $30 million, according to the US Bankruptcy Court trustee assigned to the case.
Perhaps it’s the (relatively) small scale of the crime that make this alleged con artist a “princess” next to Madoff’s “king.” Or perhaps because women are so rarely accused of con artistry, they make for a novel story and seem to need a cute nickname. Whatever the case, I happen to agree with the reader of Garchik’s column, who wrote of her reasons for wanting to see the Ponzi princess on this site: “I certainly do not want the world to think that only men could be sick schemers.”
Can you suggest any women (past or present, under investigation or convicted) to our equal opportunity website devoted to sick schemers?
Richard Monroe Harkless, the mastermind of a $35 million Ponzi scheme that took in about 700 investors in Southern California, was sentenced to 100 years in prison on Monday. That’s right: 100 years. Bernie Madoff, who ran a $65 billion operation, is facing 150 years.
It’s a long sentence but that’s not what I find most remarkable about Harkless. During his trial, he said that his problem was a failed business model. Acting as his own attorney, he claimed the sales agents who worked for him promised investors returns of up to 14% without his knowledge. He said he had no regrets and would make the same decisions again, reports the Los Angeles Times.
Harkless isn’t the first con artist to proclaim his innocence and blame his staff. And I’m sure he won’t be the last. But, really, is there a part of him that thinks he’s fooling anyone? In the face of all the evidence that’s putting him behind bars for 100 years, why doesn’t the 65-year-old just ‘fess up? The answer might be in the strange assertion that he wouldn’t change a thing. Maybe he has an overpowering need to seem like a man in control — a man in charge. Every con artist is concerned with how others perceive him; that’s the whole trick, to make people trust you and feel that you alone can make them rich. But these guys who deny what they’ve done: maybe they have some deeper need for approval.
A few members of the Hall of Infamy have proclaimed their innocence. From the courtroom and their prison cells, they’ve found ways to deflect their crimes. Richard Scrushy, the founder and CEO of Health South, blamed it on people who worked for him. Some of those people testified against him and described his micromanaging style; this was a CEO who wanted to approve what was being served in the cafeteria and who made hiring and firing decisions in a company that employed 50,000 people. And he overlooked a little thing like a $2.7 billion fraud?
John Rigas swore he was innocent of wrongdoing – in contrast to the SEC director who said he ran “one of the most complicated and egregious financial frauds committed at a public company.” He blamed the trial (and those of his sons) on a sinister plot by the company’s employees to bring the Rigas family down. It was, his attorney said, a case of “Rigas-cide.” (That was not such a terrific strategy for the defense.)
What do you make of the con artist who maintains his innocence? Why do you think he’s doing it? Does it make him any more or less despicable? Would Bernie Madoff be even more reviled if he said he did nothing wrong?
A con artist is a menace to the gullible and foolhardy. His only interest is in collecting cash; he doesn’t care about his victims or worry about the moment when they discover they’ve lost everything. The worst of these rotten apples are the con artists who prey on the most vulnerable and develop phony friendships with their victims. To me, these types are even worse than the fat cats of Enron – executives whose greed and senses of entitlement were off-the-charts.
For example, take the two scoundrel brokers who were barred from the Financial Industry Regulatory Authority (FINRA) on Aug. 31. First, there’s Oren Eugene Sullivan, Jr., of Rock Hill, SC, who allegedly ran a $3.7 million Ponzi scheme for 20 years. According to the FINRA press release, his more than 30 clients include: 15 widows, two people who had Alzheimer’s, and an individual with a developmental impairment. Many of the victims “considered Sullivan a close family friend,” reads the release.
A second broker was barred: William Walter Spencer, Sr., of Franklin, TN. For his part, Spencer allegedly “borrowed” about $2 million from members of his church, many of them elderly and all of them individuals of modest means. One of his victims is said to be a 62-year-old who drove a school bus for children with special needs; after her husband’s death, she regrettably loaned Spencer $60,000.
How could a person do such a thing?
Amongst our infamous gallery of con artists, there are a few who seem especially cold-hearted. Take Gerald Payne, who the judge called a “wolf in sheep’s clothing.” He earned that title by preying on the religious faith of his victims, bilking them of their savings to bulk up his wallet.
Then there’s the most infamous of our inductees: Bernie Madoff. The size and reach of his con, and the way he had everyone fooled for so long, touches off a singular rage. Before his sentencing, I mentioned his name to an acquaintance; this calm and cheerful man declared that Madoff should be “guillotined on Madison Avenue.” He said it without a smile (as if he meant it).
Have you read about a con artist who shocked you with his amorality? We’re looking ahead to the next batch of inductees and would love to hear from you. Please nominate a con artist to the Hall of Infamy.
Gary T. Armitage (State Department of Justice)
Three California men have been arrested for running an alleged $200 million Ponzi scheme that targeted Bay Area retirees. James Stanley Koenig, Gary T. Armitage and Jeffery A. Guidi are accused of creating a network of 55 business ventures, which they presented as safe real estate investments that offered up to 12 percent returns.
According to the charges filed by the Attorney General’s office on May 22, the funds were instead used to “bankroll their extravagant lifestyles.” In a press release issued May 22, the Attorney General said the men swindled thousands of retirees out of their life savings to purchase an 80-acre castle estate, a Lear jet and luxury cars.
The arrests come at the conclusion of a yearlong probe into AGA Financial. According to investigators, the men began holding “investment planning seminars” in 1997 to encourage people to invest their savings in construction and real estate projects across California.
According to the charges, as many as 2,000 retirees invested with AGA Financial over 10 years; and, though the alleged Ponzi scheme began to collapse in April 2007, the men recruited as much as $23 million from 91 new investors. An article on the arrests, and ongoing coverage of the story, can be found at the Santa Rosa Press Democrat.
A Canadian hedge fund manager who calls himself the “Chinese Warren Buffet” is facing fraud charges by the Securities and Exchange Commission. Weizhen Tang is accused of running a Ponzi scheme since at least 2006 with his hedge fund Oversea Chinese Fund Limited Partnership. Tang raised as much as $50-75 million from 200 investors – many of them Chinese-Americans in Texas, where he ran WinWin Capital Partners LP.
Though Tang denied the charges on his website – calling them “an undesired thing” – the SEC complaint alleges that he confessed to investors earlier this year that he was running a Ponzi scheme.
The SEC claims that Tang sent a letter to investors in which he admitted to posting false profits on account statements and using funds from new investors to distribute up to $8 million in fake profits to earlier investors.
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