There was nothing on after the basketball games the other day, so I watched a couple of episodes of American Greed. The show is only modestly interesting and the plot is a bit repetitive: People invest their money with a rich guy, who spends it on his own lavish lifestyle instead of investing it, and the poor innocent people lose all of their money.
The victims are, however, perhaps not quite the lily-pure innocents that the show’s producers would like for the viewer to think they are.
In the first show the bad guy was advertising unusually high returns on money invested with him, in the neighborhood of 20% or so, and presented his firm as “closed to new clients.” He would tell potential investors that he was not really looking for new clients, and that he was letting them in as a favor to them. Being his client supposedly would provide them with better than average returns, and was a status symbol, so that had quite a lot to gain. And they didn’t put part of their money in his care, they put all of it.
In the second show the bad guy owned a string of “qualified intermediaries,” which are firms where people place cash to avoid paying taxes on it. It’s entirely legal, but they had their money where it was for the purpose of tax avoidance. Again, they had something to gain by having their money in the bad guy’s hands.
I am reminded of a scene in “The Sting” where Paul Newman advises his crew that they have had the misfortune to come across a completely honest man and will need to select a new “mark” because it is impossible to con a completely honest person.
Did these victims deserve to lose all of their money? Of course not. But it was their own greed that put them in the position to have this happen to them.