Red Flag Awareness: One Participant’s Takeaways From Our Con Artists Discussion

September 9th’s panel discussion about the threat of con artistry in the business world and beyond inspired many participants to reexamine the world around them with a more careful eye. Today’s guest blogger and one such participant is Swati Jain of WAC sponsor company McGladrey, LLP, who shares with us her story about cutting off a scam artist at the pass, verifying several of the points made by our panel. Read on to learn her story and valuable feedback. -Deborah

Have you ever wondered how Bernie Madoff pulled off the largest private Ponzi scheme in history? Do you know the characteristics of con artists and how to protect yourself from them? At the WAC event on September 9, “Taken For a Ride: Con Artists in the Business World and Beyond”, FBI agents Barbara Daly and Kathy Diskin, and Ginny Brown, founder of SEEK Safely, shared their experiences and knowledge to answer these questions. During a breakout discussion session, I realized that I had experienced a con artist in a situation that hit close to home.

Initial Shock

At the end of April, shortly after tax season, my father received a call from the IRS informing him that my mother had understated her income and needed to pay the fine or she would be arrested for tax evasion. He immediately called me in a panic, a logical step considering I work in accounting. I called his contact and spoke to “Dan” who identified himself as an IRS agent and went through the charges my mother was guilty of. He also informed me that she would be arrested within 24 hours unless we wired the sum of money due to the IRS.

During my conversation with Dan, I heard a few things that raised some red flags. For example, my mother was the only one being charged, although my parents had been filing a joint tax return since they married 28 years ago. I told Dan I would call him back after discussing with my parents, even though he was insistent I resolve the situation and wire him the money immediately given the severity of the charges (Red Flag #2).

Plot Uncovered

My next step was to Google the phone number, and after going through some links I found a blog with a warning that it’s the number of an IRS scam (Red Flag #3). I called Dan back and asked him to email me from his government address so that I could verify he was legitimately from the IRS. His reaction was to become defensive and rude. I didn’t think a simple request would elicit such a strong response (Red Flag #4). I finally revealed I was an auditor and that we would hire a lawyer to fight these groundless charges. He hung up on me.

Keeping Vigilant

His final action ensured me that this was indeed a scam, but I came out of this experience being smarter. At the WAC event we also discussed some tips to prevent a situation like this from happening to you or anyone you know:

Talk to Someone. Whether it’s a friend or family member, talking to someone out loud about the situation can be beneficial because he/she can give advice or identify the red flags that you didn’t see yourself.

Trust but Verify. It’s a phrase that is used often during the course of my work and felt appropriate in this situation as well. It wasn’t until I tried to ask for an email address to verify that Dan was from the IRS that he suddenly became defensive and rude.

Don’t Make any Rash Decisions. I told him I would call him back so that I could evaluate the information he gave me and do some research.

If it Sounds Fishy, it Probably Is. During the course of my phone conversation, the red flags I noticed led to discovering that Dan was not actually an IRS agent.

About a week later, my brother sent me an article about this exact scam that was targeting South Asian immigrants and how they had already deceived innocent people into sending them over $1 million. It also noted that the IRS never calls….they send all communications via mail. It’s scary to think that, had my parents not had me as a resource or asked for my help, they could have been among those victims. One of the major points made during the WAC event was that anyone is susceptible. Hundreds of intelligent investors were deceived by Madoff and the internet is teeming with offers that sound (and probably are) too good to be true. Con artists know how to manipulate the people they talk to and have the ability to gain their trust, but hopefully by sharing my story, I have shown the advantages of being skeptical and armed you with the skills to protect yourself in the future.

Swati Jain is a Senior Audit Associate within the Financial Services group at McGladrey, LLP. She enjoys traveling, being active, and reading in her free time.