An open letter to the Editorial Boards of all Jewish Newspapers:

Once again a company (Purchase Plus) that was advertised in the Yiddish papers has declared bankruptcy and left many people with broken hearts and shattered dreams as many people lost their entire life-savings and were completely wiped out! This is not the first time this has happened. It happened with JewelWay, Winners Circle and Cornerstone. They have all since gone bankrupt and left people with broken promises and empty pockets. While I fully realize that newspapers can’t 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. Any company that offers a person 3,000% interest, as did “Purchase Plus,” is an obvious fraud. While some people may see some checks back, they are only given to draw the mice to the trap.

By running such ads in their paper, they are lending credibility and dignity to these schemes. In effect, they may possibly become agents, accessories or accomplices in helping promote these swindles.

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,

Just as responsible newspapers do not accept advertisements for non-kosher products, they should not accept ads for non-kosher money schemes. 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 on proper ethics and morals; don’t they apply to them as well? Aren’t they morally and ethically obligated to protect their readers from financial loss?

I think it is time that rabbonim affiliated with these papers voice their opinion. Those who lost money on account of them ought express their strong protest (respectfully, please!) at the editorial boards’ policy, and demand that this unacceptable practice stops. Is a Jewish newspaper willing to sell its soul for the few dollars it makes on these ads? We must not allow the con artists in our midst to use our Jewish Newspapers as a vehicle to scam and rob the Jewish community out of its hard earned money!

While I’m all for freedom of expression, one can’t shout fire in a crowded theater. Neither is it legal according to US law to accept such ads.

More: Newspapers actually have a responsibility to write articles that explain and warn the public not to invest their money in false promises. After all, “haTorah chasa al ma’monam shel Yisroel” so should they! Let them teach their readers the golden rule that says “anything that sounds too good to be true, probably is!” They ought teach them about Ponzi scams and illegal MLM scams so that their readers recognize these swindles and learn to keep their distance.

The Chinuch (mitzva #237) says that the lav in the Torah of “lo taamod al dam rei’ecah” includes not remaining silent when one sees another person’s money is being stolen! Someone who lost his life savings to a scheme advertised in a Jewish newspaper has called me to tell me of his troubles. Isn’t that bloodshed?

I find it abhorrent that I must take out a paid ad in “The Yid” and “The Tzeitung” warning people about the blatantly false ads they dare carry. This is outrageous! Let the one who helped spread the fire pay for putting it out. Let the one who allowed the “michshal” to appear in his paper, pay for the expenses of correcting it!  Now that it has been proven that I was right, I demand they return the money these ads cost me. After all, the mistake was their doing!

Respectfully

Rabbi Eli Teitelbaum

Public Beware!

Invest just $1,423. and receive $20,137. in return in just six weeks! Boduk U’menusah!

These and similar type advertisements appear weekly in many Yiddish newspapers read by thousands of Jews. Yet it seems that no matter how preposterous and impossible these claims sound, there are people who take the bait and bite the worm. It’s only much latter when these companies like JewlWay, Winners Circle, Purchase Plus and CornerStone go bankrupt leaving thousands of investors holding a huge bag filled with lots of shattered dreams, agony and despair, that people learn the age old adage that states that “if it’s too good to be true then it probably is”.

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 and the same suckers buy it once again. 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.

The Chinuch says that the lav of “lo sa’amod al dam rei’acha” includes saving a person from losing his money, 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.

Yet what is even more disturbing is that some Yiddish newspapers dare carry these ads with the full knowledge that many people will lose their money on account of them. While I fully realize that newspapers can’t 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,

Just as responsible newspapers do not accept advertisements for non-kosher products, they should not accept ads for non-kosher money schemes. 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? I think it is time that rabbonim affiliated with these papers voice their opinion. Those who lost money on account of them ought express their strong protest (respectfully please!) at the editorial boards’ policy, and demand that this unacceptable practice stops. 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. After all, “haTorah chasa al ma’monam shel Yisroel” so should they! Someone who lost his life savings to a scheme advertised in a Jewish newspaper has called me. Isn’t that bloodshed? One should be especially wary of long term “chasene plans” that promise long-term riches and give their unscrupulous dealers plenty of time to disappear into the night.

A newspaper that can be bought off by the mighty American dollar is not worthy of the public’s trust!

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?

I find it abhorrent that I must take out a paid ad in their papers warning people about the false ads they dare carry. This is outrageous! Let the one who helped spread the fire pay for putting it out! I call upon them to stop being machshil es ho’rabim

Respectfully,

Rabbi Eli Teitelbaum

Sample of outrageous fraudulent ads appearing in some Yiddish Newspapers such as The Yid and The Tzeitung

A plea To the Bais Din

Whereas it has now been fully proven that Purchase Plus which was sold by Chaim Reichberg was an illegal MLM scam and not just an ordinary bankruptcy, and all those who invested in it have now lost their money, I feel that the Bais Din must now reconsider its pesak that allowed him to continue selling his false plans that cheated thousands of their money. I also demand that he repay me for the expenses I had for his bringing me to Bais Din on false charges and for the advertising expenses I incurred by exposing his fraud in the newspapers. After all, it was he that made the claim that the plan was “guaranteed” and “Boduk U’menusah,” two claims that have now been proven fraudulent. I also ask the Bais Din to issue a p’sak that he personally be required to return the money he took from all his investors since his claims were an outright lie.

I also ask Bais Din to issue a ruling that newspapers be forbidden to accept patently false ads since they are machshil es ho’rabim!

It is time we put an end to all this fraud! The only way we can do so is by making him pay for his crimes to the Jewish Community. This is not the first time he has robbed hundreds of their hard earned money. We cannot allow him to get away with it. The Bais Din must clearly denounce this cheat by name and put a stop to him now before he comes up with a new plan. The public must be warned to keep their distance from him and his ilk!

Sincerely

Rabbi Eli Teitelbaum

P.S. Unfortunately the above plea went unanswered!

All That Glitters is Not Gold, Learning the Street Smarts

By Rabbi Eli Teitelbaum

While schools put their major emphasis on the three R’s, ‘reading ‘writing and ‘arithmetic, few of them teach the street smarts needed to navigate the minefields found in the real world. And so even a very successful businessman can easily be relieved of his last penny by a slick-tongued con artist who poses as a legitimate businessman.

Millions of dollars are lost each year to clever rip-off artists who use a multitude of schemes to cheat the gullible, unwary, and unknowledgeable out of their hard earned money. Some even lose all their retirement funds and life savings to shrewd and deceitful con artists.

At one time or another we've all been taken for a ride. Perhaps it was by a mechanic who sold us a new battery or generator when all we needed was a minor adjustment. Perhaps it was by a doctor who prescribed an antibiotic for a virus infection, or a charity collector who has enough money hidden under his mattress to last for the rest of his lifetime or some health freak who convinced us to buy a load of vitamins that our body doesn't need. Con artists are all around us and can zero in on their intended target as a bee finds nectar, or a homing pigeon finds her nest. No one is immune. The odds of becoming a victim of some scam or swindle are far greater than the chance of being mugged. While a mugger usually robs only one person at a time, a con artist can easily swindle many hundreds at once. The emotional devastation of being stripped of our money can be far more devastating than being the victim of a violent crime. However, the better prepared we are, the more difficult will be their task.

While it would take an encyclopedia to expose the many tricks and hoaxes used by a con artist, it is important that we learn to recognize some of the more common scams and educate ourselves to recognize their warning signs. Here are a few simple rules that everyone should know.

The first and most basic one of them all is “If it sounds too good to be true, then it probably is.” There is no pot of gold at the end of the rainbow! No one gives away something for nothing, and there is no quick way to riches unless you inherit it. Anyone who dangles a diamond-studded chain in front of your eyes is certainly a con. So don’t allow your greed and need for money to destroy your normal thinking process and common sense. It’s always good to be cautious and skeptical. Watch out for the sales pitch that totally distorts the truth about the investments a company is selling or the commodity markets that are extremely speculative and carry a great risk. The recent collapse of Enron, which was called the largest bankruptcy in US history, should send a powerful message to investors as to the corruption and fraudulent practices that are part and parcel of today’s stock market and accounting practices. This is certainly not the first time that dishonest accounting practices have been used to mislead investors. That a most respected accounting firm turns out to have been an accomplice in the largest Ponzi scheme in US history is a scandal of major proportions. One wonders what other bomb like Enron may be ticking away ready to explode any day. Some deals become so complex that even seasoned investors become confused. If the investment doesn't make sense to you, then chances are that there is something wrong with it. One must realize that the only way to catch mice is to put cheese on the mousetrap. Therefore beware of testimonials from others who may have invested and received high returns, since this may be a Ponzi scam whereby the first investors are paid with the money taken in from later recruits. When someone offers you some investment plan that guarantees 14% interest at a time that the bank barely gives you 4%, then you ought realize that you are stepping on a very slippery slope and risk losing everything.

Some scams typically begin by convincing a few important people in the community to invest. The con artist then uses their names to convince others to invest. Once he’s earned the people’s trust, he can easily swindle the entire group as well as the community.

The better the speaker the more dangerous his slippery tongue may be, and the easier he can sell you a large red balloon full of hot air. Always beware of the slick talker who convinces you to buy a coal mine that he claims contains diamonds. A swindler may be very personable, articulate, an excellent salesman and usually has an inflated ego and is a professional liar. Some even have the audacity and nerve to later call their victim and offer to get their money back for a small fee. As soon as they receive the fee they disappear into thin air. And remember, just because there is a “special sale” or a “going out of business” sign doesn't mean that you’re not being suckered, since you may be buying a discontinued model or one that they can’t get rid of. Many stores have been “going out of business” for years, and many “special sale” prices are especially higher than normal. Many times the picture in the paper will not match the model that is on sale, or the cheap model they advertised was “just sold out!” Watch out for hidden fees that don’t appear in the ad.

It’s very important that you learn to recognize a Ponzi scam; a commodity fraud, a high-tech fraud, and stay away from Multi-Level Marketing (MLM) pyramid schemes, no matter how legal they may be, since they rarely deliver what they claim. They usually offer hope but only deliver soap.

We must learn the language of the confidence men and avoid them like quicksand. During the past few years many people in our community have lost lots of money to MLM schemes such as JewelWay, Winners Circle, CornerStone, Golden Circle, Purchase Plus, ALN, and others, all which the FTC eventually closed down for being illegal pyramid schemes. When I exposed one shrewd operator who had swindled thousands of their hard earned money, he had the gall to take me to a din Torah for exposing his fraud. When the Bais Din asked me to prove my case, I simply showed them that he was offering people a 3,000% return on their investment, which was surely absurd and an impossible return. Yet, all the Bais Din did to stop this swindler was to tell him that he was not permitted to write the word “guaranteed” in his advertisements. Unfortunately, many continued to fall in because his advertisements appeared in respectable Yiddish newspapers that seemed to lend them credence and credibility. That a Yiddish paper accepts ads that help spread swindles is appalling and scandalous, I can't understand how the readers and the newspaper’s rabbinical affiliates permit this outrage to continue without protesting loudly and strenuously.

Watch out for the bait-and-switch games that are the normal way of doing business in many so called respectable stores. You come in for an advertised item only to be told that it is no longer available or that there is a much better value at a higher price. Don’t be convinced by money back guarantees unless the company has a good track record, since by the time you try to get your refund, they may be someplace in Afghanistan. Watch out for the contractor who takes his fee in advance and leaves you hanging in the middle of the job. This seems to be a very common problem nowadays. The cheapest price may sometimes turn out to be more expensive after you add up all the hidden costs they never told you about.

A good scheme may employ two or more confidence men who work together to outwit their mark. Sadly, most of these successful operators will never spend a day in jail to pay for their crimes and will usually continue their operation even after being caught. One must realize that some of these schemes are very clever and sophisticated, and therefore one must consult both a knowledgeable accountant and lawyer before investing one’s hard earned-money. Each year, thousands get taken by Ponzi schemes, which can even involve a reputable bank, your best friend, a relative, and even a trusted lawyer. A recent Ponzi scam that involved a reputable American bank and which relieved thousands of Japanese of millions, should serve to convince us of how far this con game can go and how dangerous it can be. The time to worry about your money is before you invest it. Once you lose it, chances are that you’ll never see it again. And never believe that it can happen only to the other guy; we’re all vulnerable!