These kids completely scammed this lady in Central Park by convincing her they were lost!
And this mother daughter duo lived a jet-set lifestyle by lying to their credit card companies.
But they got too greedy! Let’s get right into some of the smartest ways to run a scam!
4 - Geisted
Karan Geist and her daughter Alyss Giest defrauded multiple credit card companies of around
$850,000 through chargeback fraud for thirteen years. Karan Geist, the mastermind behind the con,
is a former paraprofessional at Elwood Middle school. According to New York Board of Education
records, she lost her job in November 2016. Her daughter Alyssa also worked in education
and only left the city department of Education in 2015. After leaving her job as a teacher,
she founded Tutorologie, a home and online tutoring service for kids.
Before Alyssa ventured into teaching and then conning credit companies,
she schooled at St. Joseph’s University and majored in secondary math education. At the
school, she was a member of the sorority Zeta Sigma Phi, and in her sorority bio,
she said her favorite hobby was shopping and that she had a shopping addiction problem. Too
bad she didn't know that addiction was going to get her in a lot of trouble.
Unauthorized
So how did Karan and Alyssa con credit card companies out of almost a million dollars?
They ran a multiyear scheme where they falsely reported legitimate transactions as fraudulent.
The scam started when Karan discovered that she could dispute the payments for items she
bought and then get refunded all the money she spent on the item. After that discovery,
she recruited her daughter, and they both continued the con until they were caught.
One time, Karan was able to get as much as $205,000 on her American Express cards and
$155,000 on her chase cards charged back to her as a result of her false report.
Karan got her daughter Alyssa into it by giving her a credit card and asking her to
use it for a $1,400 purchase in July 2017. After using the card for the transaction,
she followed her mum’s specific instructions and disputed the charge to get a refund. In the end,
they kind of taught themselves the con, as police discovered texts where Alyssa was giving her
mother specific instructions on how to dispute charges in a way that resulted in a chargeback.
Lifestyle
The mother and daughter duo lived large with the con. They bought expensive items,
including travel to exotic locations like Paris, Milan, Costa Rica, and Hawaii. Outside of trips,
they went on shopping sprees at places like Bergdorf Goodman and Bloomingdale’s.
But they didn’t just use the con on luxury expenses. They also used it for basic stuff.
Karan and Alyssa disputed mundane life expenses like purchases at the Dollar store and even a
veterinary bill for her dogs. After purchasing or paying for each item, they would call their
credit companies and argue that the charges were unauthorized. Since credit card companies
understand how commonplace credit card fraud is, they don't usually dispute these claims.
Discovery
However, the duo was never going to get away with it forever. In 2016,
Barclays Bank obtained surveillance video of mother and daughter purchasing items at a Chanel
store after they reported the purchased items as a fraudulent charge. This began an investigation
culminating in their homes being raided by law enforcement agencies. During the raid,
the authorities discovered over a hundred credit cards. They also discovered used receipts of the
supposed fraudulent purchases that they had gotten chargebacks for.
While it may look like Karan and Alyssa are callous criminals,
this fraud is a trap many Americans fall into. Almost half of all adult Americans say they
have been a victim of credit card fraud. This means that it’s a very common kind of fraud,
and it’s in the interest of credit card companies to have policies that protect their customers.
Sometimes people take advantage of these policies to perpetuate what’s known as friendly fraud. It’s
where people dispute their legitimate purchases and get charged back their original funds.
Interestingly, some people do this unintentionally. For example, if a merchant
delivers a product or service you didn’t pay for, it may be sensible to ask for a refund. However,
if a person gets away with asking for a refund once, this can turn into a habit.
And the numbers support that assertion, too, as a study by Juniper Research revealed that
customers who have had a successful chargeback are nine times more likely to repeat it.
The fact that chargeback frauds are usually low priority means that most people can get
away with doing it once or twice. But Karan and Alyssa did it multiple times and used it
to fund an extravagant lifestyle. They could have gotten away with it but were ultimately
blinded by greed. 3 - Fake Betting
John Frank Thomas and Thomas Joseph Becker ran an illegal ponzi scheme masquerading as a sports
betting fund and defrauded over 600 people of around $29 million. But this wasn’t their
first rodeo with the law. Way back in 1990, both men were convicted of running a ponzi
scheme that centered around copy machines. They had received money from companies to buy copy
machines and lease them out at a profit. However, the men never bought those machines and spent the
money instead. They were arrested and then given ten and seven year sentences for their efforts.
Perfect Algorithm
However, it looks like they served their time but refused to learn their lesson
because they have now been indicted for running yet another ponzi scam.
Frank and Becker made up the perfect lie to scam their would be investors. They
told their investors that that they had a proprietary handicapping system that gave
them simply unbelievable returns with sports betting. They also boasted that
they had special insights and ahead the curve strategies that allowed them to make more money
than seasoned investors like Warren Buffet. On one of the websites they run, they claimed
that had generated greater than 600 percent compounded gross profit in the last two years.
They basically said they grew money a quadrillion times faster than Warren Buffet and were making so
much money so quickly that they couldn’t move it through the banks quickly enough. With this lie,
both men were able to raise tens of thousands of dollars from hundreds
of investors looking to make it big. They were also able to avoid paying investors
back by claiming that they couldn’t move the money through banks quickly enough.
The investors believed they were investing in a mutual gambling
fund and that Thomas and Becker would help them multiply their initial investments.
One reason why both men were able to grow their investor base so fast was
that they advertised betting heavily on favored teams using round robin wagers,
which are bets consisting of multiple parlays. A parlay is a single wager on two or more teams
that only pays out if all the single bets win. This makes them quite risky and also
very lucrative if they come true. Most Casinos prefer parlay bets because they
are riskier and it’s much easier to make profit off of them, unlike single bets.
In total, both men were able to scam over 600 investors of around $29 million. Since
the scam was essentially a Ponzi scheme, the con artists were skilled at forging
documents to prove to their victims that their initial investment was growing.
One of the investors in the gambling fund, a retired engineer from Texas,
saw his initial investment of $50,000 rise to around $700,000. Another investor,
a New-York based doctor, saw his investment go from $125,000 to around $900,000.
Recruited
One of their earlier victims, a man named Marc Desabrais, tried to sue one of the con artists’
several mutual funds and get back his capital. The man invested about $50,000 into one of their
funds, and within two years documents from the duo said that his investment had grown to around
$2 million. However, Desabrias alleged that he hadn’t gotten a cent out of his supposed funds.
In their defense, Thomas and Becker said that the employee placing the bets at Las
Vegas casinos drowned during a short trip to Nicaragua. They said that he
got drowned with winning tickets worth millions of dollars. That’s probably
the most convenient mishap in the history of mishaps to ever occur. Interestingly,
Thomas and Becker got away with this lie because they settled out of court with Desabrais.
In any case, the gambling funds operated by Thomas and Becker required new investments to keep the
scam going. To get new investors, they hired investment advisors on craigslist who helped
them source for new victims. Interestingly, they paid out bonuses to these investment advisors
who brought them new clients. Since the brothers were running their scam via a Ponzi betting fund,
they were able to get away with it for longer. The reason is simple. Sports betting isn’t a
regulated investment tool, so they were able to fly under the radar for longer.
Aftermath
But they were certainly not able to fly under the radar forever. They were eventually found
out by the authorities and a federal grand jury returned a 14 count indictment on both men.
They were charged with one count of conspiracy to commit wire fraud
and thirteen counts of wire fraud. The statutory penalty per count for
conspiracy to commit wire fraud and wire fraud is 20 years in prison,
which means that they could bag more than twenty years if they are convicted of the crime.
2 - Florida Ticketing
Thomas Coelho made about $1.8 million dollars from running a fraudulent scheme to buy tickets at face
value and sell them profit. Unsurprisingly, this was far from being Thomas’s first rodeo. In 2009,
he was arrested by St. Petersburg police and was accused of duping a St. Pete woman of around
$115,000 worth of Super Bowl tickets. Interestingly, at the time, Thomas didn’t deny
his involvement in the crime. He admits he got the ticket, and he admits that he gave the woman
a fake check in return, but still maintains that it was all an awful misunderstanding.
Aside from defrauding that woman, Thomas also had a civil suit pertaining to fraud in
Massachusetts and also had old arrest warrants out of California for larceny and grand theft.
The Scam
Perhaps the reason why Thomas was able to carry out his fraud so many times was
because his schemes were usually simple. His most recent scheme was to lie that
he had connections that allowed him to buy highly coveted live event tickets,
and that he could easily purchase those tickets at face value and re-sell them for profit. He
told his victims that he was a lawyer and graduate of Wharton school of business as
that gave him even more credibility. He was able to convince several victims to send him large sums
for his business through this guise. However, instead of using the funds to purchase tickets,
he spent them on personal expenses, entertainment and cash withdrawals.
But he didn’t end there. He continued to string his clients along by providing them
with fraudulent documents that proved that he was legit. These documents include a fake
wire transfer receipts showing that he had indeed purchased the needed tickets. However,
Thomas wasn’t just successful with his scheme because he kept it simple. He was also successful
because he had excellent human relations. During his trial, one of his victims said that they
believed that Thomas had a close relationship with them, and as such couldn’t defraud them.
Another said that he had been befriended by Thomas and only began to suspect that
he was a victim after losing a million dollars. He said that
Thomas is an extreme danger to humanity and was quite adept at getting close to his victims and
finding their weakness. Once he did that, he went directly for all that he could get.
Aftermath
In the end, Thomas was caught by law enforcement and was sentenced to ten years in prison. But our
con artist didn’t go quietly into the night. Before his sentencing,
he continued to attempt to commit fraud. In fact, he solicited for around $40,000 from a
victim of his from jail. He told his victim that he wanted to use the money to hire a
private attorney. He was also overheard telling people that he planned to pretend to have a drug
problem so as to get a lower sentence. When the judge heard about all of this, he said Thomas’s
actions were those of someone who believed that they could beat the system. In his defense,
Thomas agreed that he’d done a horrible thing and there should be consequences for his actions.
1 - Lost Phone Laura Grasso was scammed out of a thousand dollars
by two innocent looking kids who said they wanted to use her phone to call their parents. Laura was
enjoying her day in central park when two kids who looked around ten years old approached her. The
children said they were lost and needed to call their parents. Laura felt disarmed by their charm
and surrendered her phone to them. After about a minute, they handed her her phone and went away.
Venmo Fun
But Laura didn’t know that in the interim the children had transferred
a thousand dollars from her Venmo account to another account. In fact,
she got the email notification just a few minutes later. When she did,
the children were nowhere to be found. When she checked the email notification, she discovered
that they had sent the thousand dollars to a Black Lives Matter account. The account was named
@BLM201 and described itself as a fundraising business.. Since Laura got scammed, there have
been 14 private transactions on the account, and the account had a Jersey City address on it.
Reaction
Laura could simply not believe that kids as young as that had scammed her. But once she got over
her shock she began to wonder what else the kids had done to her phone. That was when she decided
to report the case to the police. The next day, when she got to the precinct and told her story,
the police refused to file a report. They told her that she was to blame because
she had handed her phone over to strangers, and she was ultimately responsible for that
action. After a back and forth, they eventually agreed to file a petty larceny report. If the
kids had stolen a cent more, they would have had to file a grand larceny report as per state law.
Aftermath
Fortunately for Laura she was eventually able to get her money back. She reported
the theft to Venmo and they were able to cancel the transfer before it got
to its final destination. They refunded her a few days later.
However, Laura wasn’t the only victim of these kinds of scam. There was a
similar scam where a Florida woman gave a preteen boy her phone to call his parents,
and he instead sent $4,000 from her Venmo to an account labeled BLM. These sort of scams
are super easy to run because they play on the empathy that adults often have for kids.
People usually want to help children, and this kind of scam takes advantage of that. People
like Laura are so lucky that they got their money back. Others are usually not so lucky.
Click to watch one of these next videos!
Let us know in the comment section what seemingly legit organization is actually one giant scam!