She hired a lawyer who worked out a deal for the return of the money. But that fell through. She complained three times (three!) to the Tarrant County district attorney’s office but was rejected each time. She sent the old man letters begging, “I need that money to live.” He put her off. Then his lawyer told her to leave him alone.

As readers of the Dave Lieber Watchdog column in the Fort Worth Star-Telegram first learned, she first met the man at school, where she taught his granddaughter. He said all the right things.

“I’m an investment broker, and I want to help you.

“I know you’re single. You’re such a wonderful teacher. You mean so much to my granddaughter.

“I want to invest some money for you, and you can get it back anytime you want. No time limit. No strings attached.”

Bernie Madoff

A decade later, she says: “I trusted the old grandfather. He was sending his granddaughter to a private Christian school. I had no reason to doubt him. I thought he was a good Christian man trying to help me.”

He told her he owned a brokerage company. His letterhead listed his home address. If he had a brokerage, he forgot to register it with the state.

There was no literature describing the investment and no contract. Just sweet talk.

She gave him $50,000 in eight payments between 2000 and 2002. Half the time, she didn’t get a receipt, though she asked. When he did give her one, he had it notarized to make it look official.

The profit he promised on one receipt I saw was “15-18 percent interest.” Too good to be true.

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Her told her not to tell anyone else that she was investing with him, she remembers, “because he could not help everyone.”

He did give her some money — $400.

When she asked for the rest, he came up with fantastic stories: Somebody was killed trying to get the money out of South Africa. He planned to move the money to Germany in small amounts, but he couldn’t leave the country. See, the feds were on to him. He had to wear an ankle bracelet because of his troubles with the law.

None of that was true.

At the same time, his family treated her like a daughter. They bought her Christmas presents and invited her to Thanksgiving and to a wedding. “You were such a good teacher for my granddaughter, we want to keep you close,” the old man said.

Last month, I spoke to him on the phone. He told me she got more than $400 back. She was paid in cash, he said. How much? “I’d have to sit down and figure it.”

Losing everything

He lost everything, too, he said: “I’m sorry for the lady. I’m sorry for me. My wife and I went from driving Jaguars to driving old Neons. I had a home I had to unload in Arlington. Lost everything. I was living the high life. Condos in Florida and down in the Caribbean. I come away with nothing.”

The district attorney’s office didn’t take the case because “no viable, prosecutable offense has occurred,” a letter to Goodwin said. David Lobingier, head of the economic crimes unit, wrote two rejection letters to her and told me that teachers are easily victimized.

“When the economy is soft, they are afraid they will outlive their retirement savings. They invest to get more in returns. God, it just breaks your heart to think they’ve been duped that way.”

Goodwin didn’t pick up the key piece of the puzzle until 2009. That’s when she asked the Texas State Securities Board for a free background check on the grandfather. She learned that neither he nor his investment was registered with the state, as required.

By then, the statute of limitations had expired: five years for an unregistered agent such as the grandfather; three years for registered sellers.

Checking registrations

All sellers of investments must register with the state securities board. Individual investment opportunities must be registered, too.

To check, call the state securities board at 888-663-0009 and ask for a free regulatory report on an individual. It has information about a seller’s work history, legal problems, disciplinary actions, scores on license exams and customer complaints.

The teacher learned her lesson: “I would investigate him as a person. I would investigate his company. I would talk to other people and ask: ‘Do you know anything about his background? Can you fill me in?’

“I had faith in mankind. I never thought anyone would take advantage of me.”

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Dave Lieber shows Americans how to fight back against corporate deceptions in his wonderful book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong. Are you tired of losing time, money and aggravation to all the assaults on our wallets? Learn how to fight back with ease — and win. Get the book here.

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All he had to do was cash the check and send someone connected with the company part of the money as a Western Union money transfer. The rest was for him to use for mystery shopping to evaluate businesses, he was told. Afterward, he’d file reports about his experiences. Simple enough.

On Nov. 9, he went to his bank, Bank of America, but employees there told him they couldn’t cash the check. Since it appeared to be a Wells Fargo check, he was told to go there.

At a Wells Fargo branch in DeSoto, he was told to have a seat. Fifteen minutes later, a DeSoto police officer walked up to him and said, “Sir, can you stand and put your hands behind your back, please?”

“What?” the man asked.

As first reported in the Dave Lieber column in the Dec. 20, 2009 Watchdog column in the Fort Worth Star-Telegram, the man was arrested on suspicion of forgery of a financial instrument. On Nov. 30, he was indicted by a Dallas grand jury.

This is the first time I’ve seen a case where the apparent victim of a scam is arrested. But there are two important facts that must be disclosed.

Alfred Hitchcock made a 1956 movie about a man falsely accused of a crime.

First, the arrested man is Randolph Shaheed, 59, who in the late 1960s was one of Fort Worth’s most notorious gangster killers. He served 15 years in prison and is now on parole for life. (Watch a Mickey Grant documentary about him here.)

Second, he is one of the most honored ex-offenders in Texas. Two days before his arrest, the Dallas office of the state Parole Division held its annual Success Celebration, at which Shaheed was honored for helping ex-offenders succeed after they are freed.

When I asked the Texas Department of Criminal Justice to describe the award he received, the agency released a 171-word statement that describes his good deeds, calls him the ideal client and says he is “trying to promote positive change.”

How much Shaheed’s criminal record contributed to his current predicament is hard to say. He has a court date Tuesday, and the charges could be sorted out then. When I asked about his case, the DeSoto police and the Dallas County district attorney’s office mentioned his criminal background.

Shaheed said that when the mystery shopper offer arrived, he was in a confused state because his 20-year-old daughter, from whom he was estranged, had died suddenly Nov. 5.

At the time, he said he wasn’t aware that the mystery shopper ploy is a common scam. Targets of the scam are told to cash a check and send a portion of it to the purported mystery shopping company. The Federal Trade Commission says on its Web site: “The truth is that it is unnecessary to pay money to anyone to get into the mystery shopper business. ?.?.?.? Consumers who try to get a refund from promoters of mystery shopping jobs usually are out of luck. Either the business doesn’t return the phone calls, or if it does, it’s to try another pitch.”

Shaheed showed me e-mails from a Fred Mcguire of New York. (Read them here.) Shaheed said he believed that the e-mails were authentic — but they fit the classic scam. The best clue that something was wrong came in the task that Mcguire assigned him: Shaheed was supposed to visit his neighborhood Western Union office and describe all the mechanics of wire transfers from that office, including the name of money agents on duty.

When police confronted him at the bank, Shaheed said “he was a mystery shopper on the Internet,” according to a police report.

He spent four days in jail before his wife posted bail.

He is being represented by a public defender who didn’t return my calls.

Once released, Shaheed called Fred Mcguire in New York to tell him what happened.

“There’s something funny about the number,” he told me. “It just rang as if it were a phone booth or something.”

Shaheed has tried to explain that he was the intended victim of a scam.

“Doesn’t anyone want to listen to me?” he asked. “I’ve presented all the proof. I thought it was a check, brother. You know what I mean? I thought I was getting a part-time job.”

At Wells Fargo, the teller suspected that the check Shaheed presented was fraudulent, bank spokeswoman Helen Bow said. “She immediately notified the Police Department,” Bow said. She declined to answer other questions, referring The Watchdog to police investigators.

DeSoto police Capt. Ron Smith is skeptical of Shaheed’s story. “Don’t believe everything you hear,” Smith said. Although he acknowledged he had not reviewed the case file, Smith said he would be surprised if Shaheed was the victim of a scam.

In 1969, Shaheed, then known as Randolph Brown, killed a grocery store clerk in a bungled robbery attempt. Later that night, he attempted another robbery. All told, he shot at seven people, killing one and wounding two.

He was already infamous. Two years earlier, he had walked onto a Fort Worth bus holding a knife. When the driver kicked him and a friend off, he punched the driver, who started shooting. His friend was killed. He turned himself in on television at KXAS/Channel 5.

He was convicted of murder for the 1969 slaying and sent to prison, and he was paroled in 1984. After his release, he made a deal with the FBI to go undercover to break up a drug ring. Afterward, he was temporarily placed in the witness protection program. He testified against 17 defendants, the Star-Telegram has reported. All were convicted.

Then he became a minister and worked on many anti-gang programs for kids — his new life’s work. For that he was honored by the Parole Division. Excerpts from its statement released to me last week:

“With the last three years, Randolph Brown has become an advocate for other offenders. In 2005, Brown started a program now called ‘Ex-Offender’s of America Alumni Association,’ or XOAAA, where prison ministry goes beyond prayer.

“Through his program, Brown uses his voice, gifts, talents and ministry to bring forth healing for ex-offenders and those affiliated with them. The program promotes employment searches, how to get a job, finance management, spiritual counseling and more.

“The XOAAA program does not benefit just offenders but crime victims and family members as well.”

Brown also organized the Coming Up Program in Fort Worth, the statement says.

After praising his work on a radio program and cable TV, the Parole Division concluded, “Offender is more than just an ideal client. He is an advocate for ex-offenders trying to promote positive change within our community.”

Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. His book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, won two national book awards in 2009 for social change. Twitter @DaveLieber

Please let me introduce you to Inspector Luigi. (This next video is an intro, but you can skip to the actual audio files below.)

He is with the U.S. Customs Service — or so this fraud says. He called my pal, George Kahak, who probably holds the world title as victim of the most scams.

I first wrote about George in my Dave Lieber Watchdog column in The Fort Worth Star-Telegram. The story is so fascinating that I reprinted it in my book — Dave Lieber’s Watchdog Nation.

I’d love for you to read the short chapter on George in this memorable excerpt.

So the other day George called me. He was about to get bit again. He won a half million dollars in a lottery. But the organizers wanted to explain to him how to claim his prize. It involved him sending money to them.

As always, I warned him off. But this time, when Inspector Luigi called George, I was there.

I asked George if I could take the phone. Then I told Inspector Luigi that George is hard of hearing. Meanwhile, I taped it for you.

Please listen to the slick, deep voice of this con artist. He’s a beaut. Each segment is just a few minutes.

In Act I, he explains the scam to me in detail.

In Act II, he continues his ridiculous explanation.

In Act III, well, here’s the real drama. He tells me where to wire the money. Then, The Watchdog confronts him. (This sound file ends when the good inspector hangs up on me.)

In Act IV, I call back a few days later and Luigi pretends he is some other guy who answers the phone. When he tries to connect me — surprise — I get disconnected.

And in the finale, Act V, he tries to pretend, once again, that he is someone else. But it’s obviously his voice.

NOTE: As of this writing, Luigi is still using the phone number he gives on the audio (1-305-224-1783), so feel free to call him and say hello before the line goes dead.

WHY DOES THIS MATTER?

Bastards like Luigi do this every day. There are thousands of them. They prey on your grandmother, your parents, your friends and neighbors. They are so convincing that they get enough victims to make this worthwhile. Luigi is a classic case.

Watchdog Nation can’t stop the Inspector Luigis of the world from operating, but you can expose them and make it clear to all exactly how they operate.

Please share this blog post with those whom you care about.

You can read my original Star-Telegram story about this here.

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Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. His book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, won two national book awards in 2009 for social change. Please use these icons below to share this warning message on Facebook, Twitter and your other favorite social sites.