(By Jack Bigelow and Joe Koletar) A Wall Street Journal article by Maria Armental describes “The Curious Case of an ‘Oxford’ Man,” in which Steven Wessel is described by a U.S. Attorney as “…much less an investment banker than a serial liar.” According to the article, Wessel conducted a classic Ponzi operation. Investors were persuaded by assertions of spectacular returns to invest money that was used to provide spectacular returns to earlier investors. This April, Wessel told an investor he’d be getting back $249,000 for his $200,000 investment, when at the time, Wessel’s bank account had about four dollars in it!
The book, A.B.C.s of Behavioral Forensics (Wiley, 2013) examines the motivations of fraudsters—motivations that go much deeper than greed itself. The Armental article gives us some hints. Wessel is described as “a burly man with a hearty laugh,” given to boasting about his investment banking practice. He’s described as making assertions about Oxford degrees, and employment by former presidents Ronald Reagan and George H.W. Bush (none of which appears to be true). He set up a charity to help military families, chairing prestigious events to bring in funds for it. Amazingly, he succeeded—for a while—in obtaining investment moneys even though he had served time for bank fraud eight years ago! Why did he do it? And what could have motivated the more recent “investors” to unwittingly participate in this scheme?
Regular blog contributor Joe Koletar’s reaction: “This is a typical scam. A little BS goes a long way. All the charity stuff is just cover. The victims could have found out all about this guy by doing a public records data search. I have a friend who’s been doing this for 20 years. He can do a nationwide data search and turn it around in 24 hours for $200. Scams take two parties—the bad guy and a gullible victim”
Which underscores again the questions: “Why do the bad guys do Ponzi schemes and similar scams and why do the victims allow themselves to be so gullible, even to the point of not even researching backgrounds?” Two follow-on posts by Vic Hartman and Daven Morrison will tackle these questions.
Join us for more insights into behavioral forensics (behind fraud and similar white collar crimes) from the authors of ABCs of Behavioral Forensics (Wiley, 2013): Sri Ramamoorti, Ph. D., Daven Morrison, M.D., and Joe Koletar, D.P.A., along with Vic Hartman, J.D. These distinguished experts come from the disciplines of psychology, medicine, accounting, law, and law enforcement to explain and prevent fraud. Because we are inspired to bring to light and address the fraud problems in today’s headlines, we encourage our readers to come back and revisit us regularly at BringingFreudtoFraud.com.