(This site is still a work in progress, any suggestions are welcome. A list of all the articles can be found down on the right)

Everyone’s Guide to The Street Smarts

By Rabbi Eli Teitelbaum
A collection of essays on the topics of chain letters, psychic fraud, Ponzi schemes, MLM pyramid schemes, schemes of deception, health and medical fraud, business fraud, bait and switch scams, religious fraud, and much more. Protect yourself from the scam artists and cheats who try to rip you off!

One must realize that there are many con artists out there who have been trying to steal money from our community with schemes of all sorts.  I know that these scam artists will never end but if we can stop even one of them, it’ll be well worth it. I've put some of my articles together so that others can learn from these experiences. Past experience has proven that not everyone is familiar with these matters and therefore may have given incorrect advice to their good friends. I do hope these articles will help clarify the subject and prevent people from falling into the hands of the many charlatans waiting to pounce upon the gullible and uninformed. No matter which business one is in, one must learn to be very careful lest one loses all he has earned. The better informed you are the more difficult it will be to fool you.

While our schools teach the kids the three R’s – reading, ‘riting and ‘rifmetic, they are not fully prepared to step into the world where one needs to have street smarts in order to navigate one’s way through the many minefields that lay in our path. Since no one lives for one thousand years, it’s important that we learn from other people’s experiences and mistakes rather than having to try to learn from the school of hard knocks. We must not only become book smart, but street smart as well, or we may easily be left fleeced in a world full of scavengers and vultures. I suggest that accomplished doctors, lawyers, store owners and all sorts of business men be invited into our classrooms and teach our students from their own life experiences. Let our students hear it directly from those that have first hand experiences. There are plenty of parents among a school’s student body with lots of on the job experience that can be extremely helpful in teaching our youngsters the in and outs of the business world. There is no better way for them to learn it, then to hear it first hand from those who have gone through it themselves.

Being street wise can be far more helpful than all the textbooks in the world. In our day and time we must learn the ways of the world from those who know it first hand. We can’t afford learning it on the go!

The Amuka Scam

The Amuka Scam has been going on for a long time, but this one takes the cake. There are many articles on this that explain why one should stay away from this behavior but I will also link to two others that have written about similar tactics.

Beware of Kabalistic Scams

By Rabbi Eli Teitelbaum

Frauds, charlatans, quacks, and con artists have been with us since time immemorial and have outwitted even the very great, clever and wise. One of the most powerful ways to scam the naïve or gullible is to give the scam some Kabalistic twist. While charlatans exist in every profession and come in every shade and color, the most dangerous are the ones making fraudulent kabbalistic claims. That's because people are easily deceived by these mystical claims. Shabtai Tzvi took full advantage of this fact and used it to fool thousands as did many others throughout history.

Kabalistic claims all carefully camouflaged with Torah sources and accompanied by some chance miraculous cures can bring one instant fame and lots of money and can get people flocking to them by the masses. They attract the destitute, sick and brokenhearted that desperately seek a miracle cure to end their great suffering, pain and misery. It's remarkable to see how easily people are fooled by anyone claiming that they possess kabalistic powers.

Throughout history, the biggest scam artists were the priests of the avodah zorah who misled the masses in the name of religion. These charlatan faith healers, like today's evangelists, made a thriving business scamming people with their clever psychic tricks. They sell their believers all sorts of stones, amulets, charms, and even blessed waters which they claim bring their wearers all sorts of miraculous cures.

There are two great secrets of the quack's success. One is the fact that many human ills, including some of the severest, will run their course and vanish without treatment of any sort, and others are wholly or in part psychosomatic. Many fortunetellers and spiritualists take advantage of their chance successes to defraud people of thousands of dollars.

Newspapers must be very careful and not allow these scam artists to advertise their fraud in their papers since they are thereby allowing them to promote their fraud and even lending them credibility. Some of these kabalistic scam artists have succeeded in convincing many intelligent people that their kabalistic charms have the power and ability to cure cancer as well as many other incurable diseases.

Recently, I have come across a company that is in the business of selling all sorts of kabalistic charms that they claim have miraculous powers. They will sell you differently designed silver cups and what they call “breastplate stones” and even biblical art that they claim will bring you wealth, happiness, provide you with strength, vigor and energy. They claim that their gems will treat jaundice in babies, prevent bedwetting, stabilize blood pressure, build confidence and self esteem. They sell gems for strengthening the immune system and general health, cure hyperactivity, hemorrhoids and their list goes on and on. All they need do is to score some chance hits and soon they’ll be racking in millions as the gullible and naïve booster their claims with nonsensical testimonials of their own. I just wonder if they come with a money back guarantee?

The priests that convinced the people to serve Avodah Zorah were all clever scam artists who sold all sorts of holy oils and other “holy artifacts” to fill their coffers with lots of gold and silver. A story is told of a priest who claimed that his idol had the power to make the blind see. As proof, he brought this young boy who supposedly had never seen in his life and asked him to bow down to the idol. Suddenly the boy began to shout, "I see. I see!" Thereupon a clever rabbi held out a colored kerchief and asked him what color it was. When he replied that it was red, the hoax was exposed. After all, how could someone who had never seen a color, be able to know what the color red looked like.

Selling people all sorts of “Biblical art” and claiming that it possesses similar powers to a mezuzah or tefillin is highly questionable since even a mezuzah or tefillin have absolutely no powers of protection when worn as a necklace or when affixed to one’s living room wall.

Comparing or claiming that these charms have similar healing powers of the Copper Serpent put up by Moshe in the desert is indeed a very serious problem. That’s because we all know that even Moshe’s Copper Serpent was dismantled by King Chiskiyahu when people turned it into an idol believing that it had powers of its own. Its original purpose of getting people to look up at it and realize that it was G-d who was sending the snakes on account of the loshon horah people were speaking was defeated. Instead, it was turned into an avoda zarah.

While the Rabbeinu Bachai ( see Parshas T’zaveh ) tells us that the precious stones of the Choshen or the one worn by Avrohom Ovinu had great powers, one ought realize that even the stones on the Chosen did not light up unless the Urim V’tumim (G-d’s Holy Names) were placed inside of it. Wearing such stones in order to cure one’s sicknesses may actually constitute avoda zarah just as the Copper Serpent was during the time of King Chiskiyahu. Yet, even according to the Rabbeinu Bachhai, these curative powers would only apply to the very expensive emeralds used in the Choshen such as the ruby and other precious stones that cost thousands of dollars and certainly not to these stones being sold for a few dollars. To claim that these are the very same stones in miniature is outright fraud.

Most recently, a very reputable and worthwhile charitable organization raised funds by selling bottles of blessed water to all those contributing $1000 or more. Making money by selling “kos shel bracha” or other “blessed waters” is highly unethical since many people are convinced that this will heal and bring salvation to all their troubles and forget to do teshuvah and pray to Hashem. While we certainly believe that there are true tzadikim whose blessings we seek, they certainly don't advertise their powers in the press and neither do they sell any of these “miraculous” holy gems, charms, or silver cups or charge for “kos shel bracha”. Selling these charms in the name of religion protects them from the law against fraud since they are sold as having religious powers. This is a clever way to avoid prosecution for fraud. I wouldn’t be at all surprised if very soon some very clever scam artist will refill these bottles of holy water and sell them at 50% off in the local supermarket since as we know we are able to refill the wine of “kos shel bracha” and it never loses its blessed powers!

While religious Jews certainly believe in the great power of tzedaka, teshuvah, and prayer, as well as the powers of mezuzah and tefillin, and even halacha permits wearing certain amulets, the Torah clearly forbids the belief in superstitions and even our greatest tzadikim who certainly knew the powers of all stones never sold them or used them to heal others. Sometimes they may even be forbidden as being “darkei Emori” since the priests and church do the very same thing. In order to understand this very difficult subject and to know all the halachic ramifications of wearing amulets etc. I suggest you read an important and excellent sefer titled "Faith and Folly" (Feldheim distributors) a translation of Tomim Thiyeh in Hebrew written by Rabbi Yaakov Moshe Hillel, a great kabalist of our times.

The Psychic Healer; New Craze Hits Our Community!

By Rabbi Eli Teitelbaum

While I have written many articles warning the public to beware of monetary scams, this short article will deal with scams that are far worse. For not only do they steal your wealth but they also steal your health and therefore they are extremely dangerous.

Many people are not willing to accept the limitations of physicians, and in desperation will turn to anyone who offers them hope, no matter how foolish or nonsensical it may sound. These psychic healers have unfortunately defrauded their believers to the tune of billions of dollars with their claims of being able to cure the incurable. They take advantage of the sick, the destitute and the unwary, who will believe anything, no matter how ridiculous and outrageous. These cynical con artists willfully divert the patient from seeking the services of a doctor and as a result, often lead these suffering people to the intensive care unit, and even to the morgue. Medical quackery is a dangerous business and many a time can even lead to the loss of life. Each day they come up with new fantasies, new gadgets and new scams. So great is the desire to believe in these quacks, that the blind believe they can be made to see, the lame believe that they can be made to walk, and the deaf believe that they can be made to hear.

These quacks are guided by their desire and greed for money and are nothing but booby traps for the gullible. One by the name of Tony Agpaoa who did psychic surgery in the Philippines, attracted thousands of people and his spectacular procedures in which he appeared to plunge his hands into the body and remove certain body parts were all done with simple conjuring tricks performed with sleight-of-hand. He was arrested in Detroit and charged with medical fraud but skipped bail and fled back to the Philippines where he died in 1982.

Nowadays, Russia has become flooded with these types of quack doctors and many Russians that have immigrated to Israel have opened shop there.  Since a certain amount of illnesses go away on their own, it is quite easy for them to take credit for these ‘miraculous’ cures. Yet most of the time they will simply give you a list of phony credentials. They thrive on the diseased and the suffering, and are masters at exploiting human credulity and people’s desire to live.

This type of quackery is not new and certainly has been around for thousands of years. One would have imagined that modern day medicine would have put an end to this quackery. Yet the popularity of these psychic doctors seems to be growing despite the fact that many of them have been exposed as being worthless.  Benjamin Franklin once said that there are no greater liars in the world than quacks - except for their patients!

Yankel Miller tells the story about a farmer who once came to a psychic healer asking for a cure for his chickens that were dying out. Charging him only a thousand dollars, he gave him an amulet which he told him to hang on his chicken coop which would stop the chickens from dying. A few weeks later the farmer came back complaining that the chickens were still dying. For another $1,000 the psychic healer now gave him a red thread which he told him to tie to the right foot of each of his chickens. When the outraged farmer came back a few weeks later and complained that the chickens were still dying, the psychic now suggested he try a stronger remedy and feed his chickens special water which he had blessed and that, along with another $1,000, would certainly solve his problem. When the psychic met the farmer a few weeks later and asked him if he had any chickens left, the farmer asked him, “Why do you want to know?” The healer thereupon responded that “as long as you still have some live chickens left, I still have some more remedies to offer you.”

Recently I’ve been told that this craze has begun to spread through our midst and that many naive and gullible people are falling for their miraculous claims. A friend just told me that one of these quacks is asking a half million dollars to “cure” a Down-syndrome child. While it is very difficult to convince people to stay away from these quacks, I recommend that one not pay them in advance, but rather make an agreement beforehand that the money is only due when it is proven that the sickness is actually healed. If the psychic is not willing to agree to these terms, then I strongly suggest that you leave your checkbook at home.

Please make copies and pass them on and also Post! This May Save a Person’s Life!

The Clever Art of Psychic Deception

By Rabbi Eli Teitelbaum

The art of conjuring is said to be the second-oldest profession and was once the carefully guarded secret weapon of the priests who used it to establish a belief in their avoda zara among a gullible public. Clever charlatans have always used it to make a quick buck. The biggest moneymakers are the ones who camouflage themselves as psychic kabbalistic palm readers or kesubah readers etc. That’s because people are very naive when it concerns the mysterious powers of kabbalah about which we know nothing. Many very clever people have been suckered out of lots of money by con artists masquerading as kabbalists. The easiest to fool are usually the sick, destitute, and needy, who fall for these conjurers like bees for honey.

Once I substituted in an English class, and decided to teach a lesson on this subject. Before entering the classroom I did a careful check in the office and learned about some of the students I was about to teach.
When I came into the class, I told them that I had been studying the art known as “Chochmas Hayad” better known as palm reading from one of the m’kubolim who had just come into town and I wondered if it actually worked. I got into a discussion with the class on this subject and listened to their many opinions. Some were quite skeptical while others were big believers. I told them that I’m pretty new at it and I wanted to give it a try to see if it really worked. I thereupon made what seemed to them to be a random choice and asked a boy to step up to the front of the class.

I again explained that it was a very deep mystical subject that I was studying, and that even if I failed it would not prove that there is no such thing. All it would prove is that I still wasn’t good at it.  I stressed that it was just an experiment.

I now took the boy’s hand and pretended to carefully study its features, making all sorts of facial expressions as I examined it. I then began in very halting words, spacing them carefully, and giving the impression that I wasn’t really sure of what I was seeing.

“You have one brother and two sisters” I said to him, all the while giving him a questioning look as if to say I’m not very sure. When he said that I was right, I acted surprised and continued giving the reading. After scratching my head a number of times and going into what seemed to be deep concentration, I asked him in a very unsure and uncertain voice if it was possible that his father was a lawyer? “Yes” was his immediate answer. I, acted surprised myself at my accurate results, and continued with my clever act. “You seem to have a good head for math, but are quite poor in spelling? Is that correct?” I asked. He now nodded his head vigorously as the class listened in astonished silence. “You seem to be a very big worrier, but if I were you I wouldn’t really worry so much since this line here tells me that you’ll be very rich and you’ll find a very nice girl to marry.” Now the class cracked up and began laughing and I, of course, laughed along.

By now, the class seemed more than willing to accept my kabbalistic knowledge even though I tried playing it down. They now begged me to do another reading, but I explained, that I had to cover the assignment the teacher had left for them. Finally I told them I would do just one more, and chose another boy at “random.”
I carefully examined the boy’s hand while at the same time making all sorts of facial expressions, which added some authenticity to my act.

This time, I began by giving him his exact date of birth and made believe that I myself was quite shocked at having gotten it right. I played this game in order to divert their attention from suspecting the truth. I continued that he had either a sister or brother, but I couldn’t clearly see which it was. He admitted that he had a twin brother and sister. The class was now filled with excitement as my readings were right on target, but I continued downplaying my abilities.

I now paused for a while looking very engrossed and concentrated, and then said as follows. “You seem to have some problems getting along with others”-to which more than half the class nodded in agreement. I quickly continued by saying that it looked as if he was a very good athlete but was also a little conceited. Now the whole class burst out in applause and he laughed along. I now proceeded to say that perhaps he didn’t always obey his parents, to which he nodded his head quite vigorously. I continued making some random guesses that applied to most kids, such as your parents seem to find it very difficult to get you out of bed in the morning etc.

By now I had most of the kids convinced that I was a very good palm reader after all, and some of them even asked me if I could teach them how to do it.  I said that perhaps I would soon reveal some of the methods, but only on condition that they keep it secret, since I’m not sure I’m allowed to teach this holy concept to anyone. I also asked them if any of their parents had ever gone to any of these kabbalists, and some of them answered in the affirmative. One of them in fact told me that his father had gone to a kesubah reader, who had charged him over $1,000 to have his kesubah rewritten. When I asked him why his father had gone, he told me that there was a sickness in the family and the kabbalist had blamed it on the faulty kesubah. When I asked him if the person was now well he replied that the person had unfortunately died a month later, and that his father was very disappointed at the mekubal’s advice.

I now decided that it was time to reveal myself to them and teach them the lesson I wanted them to learn. I slowly began to tell them how they’d all been scammed by my simple tricks, which I’d learned by reading some books on the subject. I also read them an article that appeared in the December Readers Digest titled “My Life as a Phone Psychic” that left a strong impression on them. I then took out the sefer titled “Tomim Tiheyah im Hashem Elokecha” written by some leading mekubalim, and read some paragraphs to them which explained that there is no such thing today as a psychic or palm reader. It’s all a clever art of deception. While there are many other methods of deception, exposing them all could fill a book. I felt that at least I had convinced these boys to think twice before falling for this ancient scam.

When I once wanted to test the skills of a well-known kesubah reader who posed as a holy mekubal, I had a non-married friend of mine who was a great actor, go to see him. I provided him with a phony kesubah and he concocted up some fake story about having two sick children, which he told to the “mekubal’sgabbi. He wasn’t at all surprised when the kesubah reader told him that he had found a mistake in the kesubah which led him to believe that he had two sick children, and that for only $1,000 he would write him another one, and with this his children would have a speedy recovery. My friend thanked him for his deep insights and said he was going home to talk it over with his wife. So much for his brilliant readings!

While many of us may be school smart and can get a 100% on a math test, most of us are not very street smart and can easily be taken for a ride by a clever con artist.  Hopefully, my readers will have learned the lesson as well.

Religious Scams

By Rabbi Eli Teitelbaum

No scam is as dangerous and widespread as is the religious scam. It’s the biggest and first scam in the world. While money or health scams may cause us great damage in this world, religious scams are far more deadly since they affect our soul in the World to Come.

Most people in the world have been fooled into accepting all sorts of false religious beliefs and worshiping worthless gods and images. In the days when prophecy existed, the real prophets were greatly outnumbered by the many false ones that claimed that they were the true prophets. It wasn’t easy to know whom to trust and who was telling the truth. Charlatans would use their clever powers of persuasion and all sorts of miraculous claims to spread their false religious beliefs to millions of their addicted followers. Religion is a big time business. Priests and others have used it to fill their coffers with gold and silver. It is very difficult to give any estimate of how much money is extracted yearly by these religious faith healers.

Even within Judaism, the one and only true religion, there have always been movements that have distorted the truth. False messianic claims have been quite commonplace with people like Shabtai Tzvi only one of the many charlatans that has successfully misled and deceived thousands of people. Even within Orthodox Judaism there have been many charlatans that have cheated us by selling us holy objects such as teffilin, mezzuzos or Sifrei Torah that are counterfeit or of no value. We have often been deceived by the phony charity collectors who have cheated us out of performing a mitzvah. No matter how smart we think we are, it is nearly impossible to protect ourselves from all those who wish to scam us. This is why we must constantly pray that G-d protect us from being mislead and show us the real path to follow. Without His help we could never do it alone.

Beware Before Cashing or Accepting Checks

By Rabbi Eli Teitelbaum

Even when people present proper identification and their driver’s license, one is advised to beware, since there are a lot of people that are brazen enough to pay you either with stolen checks or their own worthless checks drawn on an account that is already closed or that they plan to close after they have given you their check. Unless you know the person, it is not advisable to cash any check. Don't judge people by their outward appearance.  There are lots of stores and people who have recently been ripped off by fraudsters, some of whom even dress and speak like “heimish” people, but in reality are in the business of cashing checks that are no better than Arafat’s peace agreements.

Another widespread scam which these “chevra” pull off works as follows. They go to unsuspecting well-meaning people, often these are Kollel Yungeleit who need the money, and offer them lots of money to lease a new luxury model car using their personal credit or credit card. After that, they somehow manage to change the title and put the car on their own name. The thieves wind up driving a free luxury car such as a Lexus and the victim winds up paying the bill or being dragged to court for non-payment.  Never lend your credit card or sign a credit form for these sweet-talkers no matter what they offer you, for it can lead to financial disaster and ruin your credit. Lately, I've been hearing more and more of these tragedies.

One must also note that identity theft is on the rise and so far little is being done about it, so be forewarned.

P.S. Please make copies and pass along to friends and businesses! A dollar saved is a dollar earned.

Secrets of the Psychic Exposed

Part 1 of a 5 part series
The clever art of deception
By Rabbi Eli Teitelbaum

Watching a psychic at work can be an awesome, astounding, and enjoyable experience and can easily fool us into believing that they actually possess hidden and mysterious powers enabling them to read people’s minds, communicate with the dead, or are able to break or fix objects just by concentrating their supposed mental kinetic energy on the object. Their tricks are so well executed that many people are easily deluded into believing that certain people possess supernatural powers that can defy the laws of nature and make even the impossible happen. It’s only when we uncover their clever methods of deception that we are forced to admit how easily we can be bamboozled into believing the nonsensical and the absurd.

Stealing One’s Health and Wealth; Quacks, Phonies, Charlatans and Fakers

By Rabbi Eli Teitelbaum

Health fraud is an old and very successful business. The reason is simple. When someone is very sick, it’s easy to take advantage of his desperate situation by offering him all sorts of miracle cures. People without hope will grasp onto any straw offered them, no matter how ridiculous it may sound, in the hope that it will provide a cure. They are willing to try herbs and absurd concoctions of all sorts that claim they can cure the incurable. Desperate and gullible people will buy anything offered them, even if it includes spider legs and snake oil. Hopelessness and wishful thinking easily overpower reason and common sense. There are people who have made millions by claiming that they have the special ability to bring about magical cures. Any health claims, no matter how ridiculous, bizarre, and absurd they may be, will be swallowed by enough people to make their producers rich. Voodoo and witch doctors have made alternate medicine a viable option for thousands of people. These modern health quacks are super salesmen, skillfully playing on people’s fears, hopes, and naiveté.

Since many aches, pains, and illnesses will go away even when left untreated, it is easy to collect testimonials from countless people that were  “cured” with their magical formulas. Many testimonials are faked or “enhanced” by clever charlatans. Misleading advertisements and misinformation about foods, nutrition supplements and nonprescription drugs in health magazines are widespread, and often seduce the unsuspecting reader into believing them. Many magazines make money carrying such ads and will certainly not kill the goose laying the golden eggs by publishing articles criticizing them.

And so while science may not have all the answers, quackery has no answers at all, but will take your hard earned money and leave you with an aching heart and an empty pocket. Unfortunately, many promoters of alternate medicine and quackery may even be honest people who truly believe in the products they promote.
Recently, when one very famous Jewish scam artist’s many fraudulent business ventures were closed up by the government, he decided to advertise some of these dubious health claims in order to earn a living. Since “a sucker is born every minute,” he is now doing quite well as he draws countless flies into his net.

A doctor once rented out a special black box, which he claimed could heal people, on the condition that one was not permitted to open it up to see the secret remedy it contained. He made millions renting out his contraption. After he died, people opened the box and to their surprise and chagrin, all they found were some nuts, bolts and tangled wires. “Magnetic healing pouches” are making fantastic claims, but when scientists surreptitiously replaced the magnet inside the pouch with an ordinary stone, they found the results were the same. Unfortunately, quackery is not sold with a warning label.

One of the latest medical scams hitting the Jewish community is the “pendulum” scam. This is when a weight or crystal is suspended at the end of a string or chain and the device is held over the person and is allowed to swing freely as it supposedly answers questions put to it by the direction in which it swings. It’s hard to believe that intelligent people will fall for this irrational and absurd swindle. Some pious Jews are even practicing some of this quackery in their misguided belief that it actually works. How painful and tragic that this hoax has even received the approval and endorsement of a very esteemed rosh yeshivah who has been misled into believing that the “pendulum” actually possesses some mysterious healing powers.  Beside the outright theft involved, raising false hopes for the seriously ill is one of the cruelest and most dangerous forms of quackery since it lures victims away from more effective treatments that can sometimes save lives.

History has shown, (as in the story of Shaul Hamelech) that in times of great desperation, even the greatest of the great can seek the advice of what the Torah clearly forbids. One can read all about these quack devices in a book entitled “Tales of Medical Fraud from the Museum of Questionable Medical Devices” by Bob McCoy. Another very important book on this subject is “The Health Robbers; A Closer Look at Quackery in America” by Dr. Stephen Barrett, and Dr. William Jarvis, Ph.D. who teach us how to tell experts from pretenders and how to get reliable information. Only through proper education can people learn to protect themselves from the unscrupulous money-grubbers and charlatans who fatten their wallet by preying on the sick and infirm, the ignorant, and naïve.

The Erosion of Trust; Now You See it, Now You Don’t

Rabbi Eli Teitelbaum

With the Enron scandal heading the list, and the many others such as Global Crossing, Tyco International, and WorldCom that have followed in its wake, people have suddenly realized that what they say is not what it is. The promises of great wealth and easy money are illusory. Many stock analysts and tipsters are out to make a quick buck and are as trustworthy as Al Capone. Wall Street has turned into Fraud Street, as many of their claims are a mixture of bluff and deceit. Accounting sleight of hand has reached a new high, leaving people with no way to determine whom to believe. Big corporations have been found to cheat, manipulate, and fleece their shareholders blind and have caused massive losses for some of the biggest banks in the country, endangering billions of pension funds and individual investments. Financial shenanigans of unprecedented magnitude have become the order of the day. Tall and mighty companies come crashing down like the Twin Towers, leaving people impoverished and destitute, their life savings gone up in a puff of smoke. Rip-off artists proliferate and the angry public is beginning to believe that honest corporations are not easy to find and very difficult to identify.

Our trust in the American dream is slowly eroding as fear and terror fills the news. Wall Street enthusiasm is slowly slipping, as people realize that much of it is based on hot air and hype.

The only good advice is found on the front of every dollar bill which reads “In G-d we trust,” all others must pay cash! Yet with the recent decision to outlaw the mention of G-d’s Name even in the Pledge of Allegiance, one wonders if they will now have to recall the dollar as well?

Watch Out for the “Ponzi”

By Rabbi Eli Teitelbaum

Mr. Smith (not his real name) was a well-to-do lawyer with an excellent reputation for honesty, very personable, charismatic and well trusted in the community. He was a supporter of many community organizations, on the board of directors of many well-known corporations, a guest of honor at some prestigious organizational dinners and lecturer at important seminars.

He claimed to have invested heavily in real estate, making a fast buck flipping large apartment buildings. He also had made quite a bit of money in the stock market, buying and selling the right stocks at the right time. Anyone who had invested with him received a good return on his money, and word soon got around that he was a hot shot and had the Midas touch. People begged him to take their money and invest it in some of his real estate ventures. He was very straightforward with them and always warned them that, while the chances of making a quick buck were very good, every investment has its risks- even though he hastened to assure them that the risk was very small indeed. People were so convinced that they’d double or triple their money that they barely listened to his warnings, which he gave them in a simple, matter of fact way. Everyone knew that the stock market had its risks, but with Mr. Smith’s great record, they felt the risk was minimal and they were willing to chance it.

It wasn’t until the real estate market suddenly took a turn for the worse and the stock market tumbled, that Mr. Smith realized he was in deep trouble and couldn’t make good on his promises. Too ashamed to tell even his wife about the sudden turn of events, he kept it to himself. Luckily, people still had the greatest trust in him and kept on bringing him money to invest. While he was very careful to tell them that he couldn’t guarantee any big returns, he certainly didn’t inform them of the terrible crisis he was facing. Instead of investing the new money, he used it to pay off his previous investors, whose money he had lost. Not only did he pay them back, but he also would give them a handsome profit so that people should continue having confidence in him and bring him more money. This technique is known as robbing Peter to pay Paul. To the uninitiated, it still seemed that he was making big profits. He was hoping for a miracle. He certainly had no intention of stealing anyone’s money, and hoped and trusted that business would pick up and he would once again give back his fortune, so that he could repay his investors. Much of the money belonged to widows or represented people’s life savings. Some were retirement funds on which people relied on for their later years.

But, try as he did, not only did things not get better, they went from bad to worse. He tried as best as he could to conceal everything from his family and friends, but inside the matter was eating him up alive. He realized he couldn’t tell a single person of the terrible straits he was now in, since it would just make things worse.

When he woke up one morning with strong pains in his chest, he quickly called an ambulance that rushed him to the hospital. After some tests, the doctor told him that his blood pressure was much too high and that he was probably stressed out because of his heavy workload. The doctor gave him medication to bring down his blood pressure and advised him to take life a bit easier, slow down, do more exercise and watch his diet. He had gained far too much weight in recent months. Little did the doctor know that he was just eating his troubles away. He was now suffering from deep depression, but dared not tell even his closest friends his real problem. While his wife and friends noticed his change of mood-he wasn’t as cheerful as before-they blamed it on overwork. They tried to convince him to keep shorter hours and relax more. Little did they realize the real source of his personality change.

It was only when checks from his account started coming back unpaid and he stopped making good on the payments he owed, that people became suspicious. At first he told them that it was a bank oversight or that someone had bounced a large check to him. It was excuse after excuse, until he ran out of excuses. He stopped answering the telephone and told his wife to say he wasn’t home and would return the call later. But when later came and went and nobody heard from him, it was cause for great concern. Rumors began circulating around the neighborhood that he was in deep financial trouble, but he denied them all. By now his family realized that something was amiss, but didn’t have the faintest idea of what to do to help.
He was sinking deep into the quicksand, and the more he tried to pull himself out, the deeper he sank, and he was taking lots of people along with him. While originally he had absolutely no intention of ever cheating anyone or taking a penny that didn’t belong to him, he realized that things had gotten out of control. He even contemplated suicide! He just couldn’t face his many friends and neighbors who had invested their life savings with him.

When the banks finally noticed what was happening and decided to close his accounts, there was no way he could cover things up. Nosy reporters were beginning to ask questions and soon the news hit the headlines of the local papers, spreading to the others with great speed.

People read it with incredulous surprise. It just couldn’t be true, they said. There must be some mistake.
People were ruined, devastated, and their hopes shattered. Their life-savings were wiped out. Some had even borrowed lots of money and had no idea how they would pay it back. The domino effect was devastating. Some would have to sell their homes, which they had built with lots of sweat, blood and tears. The shock waves would continue on for years to come. Some wounds would never fully heal.

Lawyers were hired to see what they could salvage, but the prospects of seeing any of their money back was as likely as discovering oil in one’s back yard.

Would the public learn a lesson from this horrendous disaster? Perhaps some would, but for the most part, time would soon erase these bitter memories and the story would soon unfortunately repeat itself. There will always be people who are too anxious to believe promises that are too good to be true. When? Where? Who? Just make sure it’s not you!

Note: While the above Ponzi started out as a legitimate business investment, the original “Ponzi Scheme” is named after an Italian immigrant named Charles Ponzi (1899), who cheated people out of their hard earned money by playing the “make believe” investment game. He did jail time for grand larceny, and then got himself deported back to Italy in 1934. Since then, there have been many others who have played his game and cheated thousands of people out of their hard earned money. One can still spot such swindles in pie in the sky advertisements placed in some Yiddish papers that unfortunately and disgracefully print them. For shame!

The Ponzi Scheme

By Rabbi Eli Teitelbaum

Ponzi schemes come and go every few years and lots of people wind up falling for them. They are built on lots of hot air. It begins when a slick talker and trusting looking person convinces you that he has discovered a great place for you to invest your money and guarantees that in a short time your money will be doubled or tripled. He now goes to another person and tells him the same baloney. In order to get people to believe and trust him, he takes the money he gets from the second person and gives it to the first person who now thinks he has discovered an oil well. Word soon spreads and everyone comes running to him to invest their money with him thinking he has the “Midas touch.”  When he runs out of fools, the entire scam comes tumbling down leaving everyone wondering how he could have fallen for this nonsense. This only proves how easily greed and need can distort our senses and fool those who are naïve enough to believe that everyone else is as honest as they are. If you think only others can fall for these schemes then better watch out, since you are an easy candidate.

The scheme is called the “Ponzi” after the first person who pulled if off and wound up sitting in jail for it. Obviously many people still fall for it despite the many people it has wiped out.

Navigating the Road of Verbal Deception!

By Rabbi Eli Teitelbaum

A careful look at the world we live in should easily convince us that deceit, lies, verbal chicanery, and deception have engulfed us from all sides. Anyone not very vigilant can easily sink into the verbal quicksand lurking at our every footstep. Deceptive advertisements filled with verbal loopholes and half-truths have become part and parcel of many businesses. Confusing fine print has unfortunately cost Americans billions in lost revenue and earnings. Selecting from among phone company deals can be as dangerous as Israel’s new road map for peace, and signing up for a credit card can be like driving through a minefield. Few people realize that credit card companies can change the rules anytime they want by simply providing you with a notice buried in plenty of very fine confusing print. If you don’t respond, you automatically accept their revised terms and may wind up paying outrageous fees.

Many of us have been suckered in by half-truths and ads that use asterisk disclaimers that are hard to see without  a magnifying glass and that can only be deciphered by an English professor or an attorney. What they say is often not what they mean and what they mean is rarely what they say. Some stores claim mega discounts based on “suggested” retail prices that have no basis in reality, while others sell merchandise that looks nothing like the picture appearing in the advertisement. If the prices sound too good to be true then better beware of the “bait and switch” game that many of them often play. We are often taken by car leasing deals that contain tacked on fees that we never were told about, or credit card bills that reflect expensive interest rate changes that are deeply buried in lots of fine print. For example they will offer little or no interest rates on cash transfers but charge a one-time 3% charge for doing so. “Hidden fees and surcharges for cell phones add up to $82 million a year extra that the city’s cell phone users are forced to pay” said Sen. Charles Schumer, calling the wireless companies an “industry out of control.” “No amount of convenience can make up for the aggravation of bogus billing” said Schumer. Many a time, even a good lawyer would have trouble understanding  what “is” is all about!

Misleading people with words, numbers or images has become endemic in today’s society. Thousands of people are fleeced of their life savings by companies offering all sorts of giveaways, such as a free trip to the Canary Island or a beautiful new home in the middle of a desert. Thousands are taken by fraudulent stock brokers who convince us to buy stocks they know are heading down a cliff. Thousands are conned by testimonials made by celebrities selling us a concoction of snake oil mixed with spider legs that supposedly guarantees us health and wealth and even supernatural powers. Thousands spend millions on bottled water lured by advertisements that suggest that ordinary sink water contains dangerous contaminates and can be unhealthy to drink. Little do they realize that the beautiful gold label on the bottle depicting cool luscious springs and tall snow capped mountains are nothing but a mirage. Pictures can severely distort reality and the media uses them to maximize their message of distortion.

Seducing people with numbers or by manipulating statistics has become a highly specialized field. An ad claiming that nine out of ten doctors suggest using brand x over brand y is the gibberish sold to the unsophisticated consumer. How many or which doctors were part of the survey remains a secret. This sleight-of-hand or statistical chicanery seems virtually undetectable, since most people don’t know much about science and are not equipped to evaluate the information. Clever accounting schemes have toppled some of Americas biggest corporations and have bankrupted many of their investors. Accounting gimmickry is nothing new and was recently used by the N.Y.C. Board of Transportation to hike up the fares. Luckily they were caught and the courts forced them to lower them. Attractive deals often include hidden fees buried in fine print. Beware of appealing ads that seem too good to be true – they usually are. Watch out if you are told that you must act immediately or that it is an “exclusive” offer, or if you are asked to send them money in advance or sign any forms. Remember that “Get rich quick” deals will send you to the poor house and the word “Guaranteed” only means that you are guaranteed to lose your money.
Yet, besides words deceiving us and harming us monetarily, they can do even greater damage by distorting our view of reality and objectivity and give us a misleading opinion of world events or beliefs. The art of fabrication and distortion is an old and ancient one. Lavan Ho’arami was a master of this art and used it to try to deceive our father Yaacov into making agreements that Lavan had no intention of keeping. Fortunately, Hashem protected him from these evil intentions.

Nowadays, some politicians have become masters of this art and used it to sell Israel a snake oil concoction for peace, brewed out of  a poisonous mixture of lies, duplicity, and divisive rhetoric. Diplomatic sleight of hand has been used to exchange one failed peace process for another as verbal delusion and falsehood have become governmental norms. One wonders what Americans would say if The Jerusalem Post would constantly refer to the USA as “Occupied Indian Territory” or describe the Bronx as “Black African Settlements ?”
One can easily distort or slant the news without actually lying. Take the New York Times that reported “Heightened Tensions between Muslims and Jews in France.” One could never guess from such reporting that it was the Jews that were the victims of the escalating violence. The Crown Heights pogrom was reported by the Times as “Unrest that left one black child and one Jew dead,” leaving readers with the impression that the two deaths could in some way be equated, instead of writing that the black child had unfortunately died in a car accident while the Jew had been stabbed to death by an anti-Semitic mob. When a white mob lynches a black man do they also describe it as “heightened tensions between blacks and whites?”  One can easily underestimate or overestimate the number of people attending a rally. A crowd of 10,000 can easily become 100,000 just by the addition of a zero. The reverse is also often the case. This statistical sleight of hand is all too common.

Reporting the truth, the whole truth and nothing but the truth still doesn’t mean that you’re getting the honest truth. It can be very misleading especially when the context is omitted. A newspaper may report that an Israeli soldier shot a Palestinian boy, but fails to tell the readers that the Palestinian boy was wearing a suicide belt or was just about to throw a grenade at an Israeli bus full of children. The report may be technically true but is a lie nevertheless. They slant the news by only reporting what they want to report. Any good writer can easily write the truth, yet, it may be very far from the honest truth.  Nimrod as well as Eisav and Lavan were masters of such deception, as Rashi explains the meaning of “gibor tzayid” or “ki tzayid b’fiv.” They knew how to use words to delude and deceive people.

Most people reading a newspaper or listening to a news report are easily fooled by such selective or biased reporting. People in Israel are under the impression that New York is so dangerous that one has to wear a bulletproof vest when walking down the street. That’s because the news reports only  the killings, but tells little about all the peace loving citizens and the peaceful neighborhoods. The reports about the few religious people arrested for drugs or stealing, tar and feathers all the vast majority of honest, law abiding Chasidic Jews. The news never mention the citizens who make an honest living, or return someone’s lost wallet.  That’s not sensational enough to make people buy papers. In order to make the news, you’ve got to get on top of a bridge and threaten to jump off, or take a few hostages and threaten to kill them or catch a rabbi selling drugs. Constantly reading such stories gives people a very unbalanced and distorted picture of reality. One begins to believe that every yeshivah boy is a teen age dropout  and chas v’shalom a drug addict and that every rabbi is chas v’shalom a cheater and every street is a shooting range, and every Israeli soldier is trigger happy and busy shooting Arabs all day. Jason Blair, the self-admitted liar of the New York Times who was caught red-handed fabricating his reports said the full truth when he stated “don’t believe everything you read.”

Words can be very tricky devices that becloud the truth, especially when directed at the unsuspecting or uncritical reader. One can easily substitute “freedom fighters” for “terrorists” or “occupied territories” for “towns in the West Bank.” The media has a picnic using powerful images to distort the truth or slant it to portray their own political biases. Showing a picture of a dead Arab child in his mother’s arms killed by an Israeli soldier can easily be more convincing than a thousand word essay defending Israel’s right to self defense. And when a German investigation proved that 12-year old Mohamad Al -Dura (Sep. 30, 2000) was killed by Palestinian – not Israeli – bullets, the story was virtually ignored. Telling half-truths placed alongside deceitful images can be very convincing. Just imagine a peaceful demonstration of thousands of chareidim with the camera focusing in on the one crazy person living a mile away who punched a chiloni in the nose with blood gushing down the persons face. What would such an image tell you about the demonstrators? Focusing in on the one shouting match from among thousands of peaceful demonstrators will easily give a distorted picture of what actually took place. Interviewing the one in a thousand people that says something stupid can easily defeat the purpose of the  rally. Yet, this is exactly what is often done by the secular anti-chareidi media!

Let’s remember that the road of verbal deception is a very slippery one that runs alongside a steep cliff.  Let’s be sure we drive very carefully!

How to Lose Your Money the “Quick and Easy Way”

By Rabbi Eli Teitelbaum

Once again people learned the age old adage that states that “if it’s too good to be true then it probably is” as Winners Circle filed for Chapter 11, leaving thousands of investors holding a huge bag filled with lots of shattered dreams, agony and despair.

It seems like people will never learn their lesson and continue to fall for any scheme that offers quick and easy money, no matter how ridiculous, preposterous and absurd it sounds. The returns they promise should be a dead giveaway that it is nothing but a fraud. If there was any truth to them, we should close up every legitimate business and invest all our money exclusively in them! Only a Chelmite would give them any credence. The odds of making a quick buck by investing in these lucrative money offers are about as great as discovering oil in your backyard or as a snow storm in Elat!

As one plan goes bankrupt, the con artists are already advertising the next swindle. The need and greed for money is so great that all reason goes out the window. It’s amazing how otherwise smart people can be so dumb.  As soon as they see a few people that do make some money, they immediately jump on the bandwagon. Little do they realize that they are only the cheese to bait the mice.

Yet few people seem to care about what’s happening in the community, and the con artists continue with their swindles without the slightest inhibition or shame. Every few months another Ponzi scam spreads thorough our community without anyone becoming any wiser.
I find it quite appalling that some newspapers dare carry these ads even though it’s clearly against the law. While I fully realize that newspapers can’t always be held responsible to check out and investigate the legitimacy of every ad that appears in their pages, simple morals and ethics demand that they refuse to accept ads that are blatantly misleading, fraudulent and are designed to tempt the “blind” to lose their money.

By running such  ads  in their paper, they are lending credibility and dignity to these schemes. In effect, they may also be considered agents, accessories or accomplices in helping promote these swindles. The law clearly forbids newspapers from accepting false or deceptive advertisements.

While it is certainly every individual’s responsibility to check out the authenticity of every ad, by accepting these ads the publishers are aiding in the spread of these schemes to the unwary public, causing the ignorant and naive  to lose their hard-earned money,

It is true that people who respond to get-rich schemes are letting greed get the better of their judgment, but shouldn’t newspapers have a responsibility to protect the gullible? The papers lecture us in their editorials and columns, shouldn’t they protect their readers from financial loss? Those who lost money on account of them ought express their strong protest (respectfully please!) at the editorial boards’ policy, and demand that these unacceptable practices stop. While I’m all for freedom of expression, one can’t shout fire in a crowded theater.
More: Newspapers actually have a responsibility to write articles that explain and warn the public not to invest their money in false promises. A newspaper that can be bought off by the mighty American dollar is not worthy of the public’s trust! Honesty  must be their policy!

It’s time we take off our green($) tinted glasses and realize that there is no quick and easy way to riches. You’re probably better off investing in a lottery ticket. The chances of winning are much higher than investing them in any of these money swindles.

Most people still remember as “JewelWay” spread through our community with devastating fury outfoxing thousands of their hard earned money until it was declared illegal by the F.T.C. and went bankrupt, leaving people with worthless jewelry, heartaches and ever increasing debts. All prior warnings fell on deaf ears. How many more bankruptcies are necessary before we learn our lesson?

Scamway to Close its Doors

By Rabbi Eli Teitelbaum

I must admit that I was caught by surprise when I recently read that one of the oldest and biggest MLM companies called Amway was finally going to close its doors. “Make an extra $2,000 or $3,000 a month just by working part-time with your friends and neighbors” was their deceptive claim to fame. They promised great wealth by selling consumer products to one’s friends and neighbors but made most of their money getting people to recruit new salespeople to work under them (their downline) and taking a commission or “bonus” from their sales. For many years they have been charged with running a pyramid scheme, in which the profit is made by luring ever increasing people into their system rather than from the sales of the actual product. Additional charges included “false and misleading advertisements,” since people never made anywhere close to the money they said that one could earn. Yet the courts have allowed it to operate because they only charged $40 for their sales kit and claimed that they were selling a product. Actually, Amway made its big money by luring people into buying their business kits, motivational tapes, and getting their salespeople to come to their seminars. Instead of making money, most people lost thousands of dollars by buying their worthless motivational products and attending their hyped up fraudulent seminars.

In an excellent book entitled “Behind the Smoke and Mirrors” by Ruth Carter, she reveals the delusion and deception of the entire bogus business.  Amway promised wealth, opportunity and freedom to all those who joined and were willing to put in significant time and effort. They tried to sell hope but all one got in return was lots of soap and heartaches. There are former distributors who claim to have lost their shirts, their marriages and their families because of their involvement in the Amway business. To understand how it worked, one must read Ruth Carter’s excellent book that tells her own life story in great detail since she herself went through it all.

Yet, as is almost always the case, these companies never give up. When one company closes up, two others take its place and there seems to be an endless supply of suckers that will be lured by their promise of easy wealth and riches that supposedly lie at the end of the rainbow. Some people will never learn.  As long as we wear green glasses one can never see red!