6 Tales of Real-Life Scams

During a July Fourth girls trip, Christine witnessed the depth of her mother’s obsession when she kept leaving the group to communicate with these strangers.

“And I then realized that she did not have any money left in her savings,” Christine said. Her mom sold valuable items, even took out a title loan on her car. When Christine tried to intervene, the pair fought.

“Anything I said to her, I was crazy, I was trying to stop her from meeting her love, I was trying to control her,” Christine said. An examination of her receipts showed that within several months, Lisa sent at least $120,000 to internet criminals.

Christine felt the loss of her father and also estrangement from her mother. “I don’t know what else can be done. So many people have told her that this is a scam, and she just freezes up and doesn’t talk,” she said.

Romance scams cheated victims out of over $600 million in 2020, according to the FBI. Behind those numbers are whole families that have been emotionally and financially wrecked — like Debbie, a woman in her 70s, and her son Ben.

Debbie had been a widow for more than a decade when she went looking for love online. A man who said his name was Joshua started chatting with her during games of Words With Friends. Joshua was patient. It was months after their first chat before Debbie finally consented to a more intimate online relationship. Then, things progressed quickly.

Joshua said his son was in trouble and asked Debbie to send him $800. Then came requests for money for passport problems, money for legal problems, money for a disaster on the job. At one point, Debbie stuffed tens of thousands of dollars into a FedEx envelope and mailed it.

By the time Ben discovered what was going on, his mom had cashed out her retirement accounts. All told, she’d sent Joshua and a couple of other suitors about $300,000. “It was so crushing to read her texts,” Ben said. “Why didn’t she reach out to us?”

Ben finally convinced his mom that Joshua was fake and shut down her accounts. Now, Debbie has to face the crushing loss of her lifetime savings. “I survived widowhood, I survived cancer … and I’m going to survive this,” she said. “It just won’t be easy.”

The crime: Online pet scam

Danny Shelton’s family has always included big dogs. So when family pet Lois was stricken by cancer, they were crushed.

Shelton decided to surprise his wife with a new puppy. He scanned the internet and found just what he was looking for.

“The dog’s name was London. It had on a little Christmas hat,” said Shelton. After a quick phone call, the deal was done. London was in Georgia, the breeder said, but could be flown to the St. Louis airport for $700. Danny wired the money from a Walmart and received a bill of sale over email. He prepared to surprise his wife.

But then, the breeder wrote him a text saying, “There’s a problem at the airport in Atlanta. Security is quarantining the dog, and they need another $500 to release it.”

That was the moment it hit Shelton like a punch in the gut. He’d joined a growing list of people scammed by fake online breeders. The Better Business Bureau said reports of pet scams are up nearly sixfold since it last studied the problem in 2017. “A lot of people are really emotionally devastated,” said the BBB’s Steve Baker.

Shelton’s story has a happy ending. A breeder heard about what happened and let Shelton pick a puppy from her very next litter. When the family visited, one of the pups immediately ran to Shelton. “She picked me,” he said.

The crime: Investment scam

Doc Gallagher — the self-styled “Money Doctor” — seemed like everyone’s best friend. He hosted three radio shows in Dallas. He emceed the annual Spectacular Senior Follies fundraiser. He was the neighbor who always sent a book or flowers, or visited you in the hospital. And he took in millions of dollars in investment funds while promising clients they’d never lose a penny. He seemed to prove it by sending generous periodic “bonus” checks.

“Of course, I was intrigued,” said investor Larry Burdine. “We’d just gone through the 2008 [financial crisis] whereby most everybody, including myself, lost about 30 percent of their net worth.” So Burdine and family members invested about $250,000 with Gallagher.

The Money Doctor was actually born William Neil Gallagher, and he indeed holds a Ph.D. — in philosophy. He also has a charismatic demeanor. Gallagher seduced those reluctant to trust him with what seemed like outsize acts of love. Burdine was still a skeptic when Gallagher visited him in the hospital right before he was about to have a scary heart procedure.

“We got down on our knees and held hands, and Doc prayed for my recovery. Then he left. And, you know, about two weeks later I moved my IRA over to him,” Burdine said.

After that, Burdine didn’t hear much from Gallagher. But then news arrived that the Money Doctor was in jail. He’d been arrested for securities fraud. Gallagher lied about having a license to sell investments. By the time the FBI combed through the chaotic paperwork in his office, it was clear Gallagher was running a classic Ponzi scheme. He took in $20 million. In November, Gallagher, 80, was sentenced to three life terms plus 30 years for fraud and exploiting the elderly.

Locals now call Gallagher the Bernie Madoff of Texas. Burdine’s investment was largely gone. “The old-fashioned Ponzi scheme is alive and well, and it can be difficult to detect,” said Gerri Walsh, the president of the FINRA Investor Education Foundation. And Gallagher used religion to open doors. “He wrapped religion around his neck,” said Dallas investigative journalist Dave Lieber. “That is a very disgusting thing but, unfortunately, it’s not uncommon.”

The crime: Sweepstakes scam

Mary was a widow in her 70s who taught financial planning courses but was now leading a quiet life. But when a letter from American Sweepstakes came in telling her she’d won almost $5.5 million, she thought that was about to change. She was urged to contact a man named Robert Carson to make arrangements to receive the prize.

She called Robert, who congratulated her, while adding a little detail: She needed to pay about $25,000 in taxes before receiving the funds.

She was skeptical, but Robert was persuasive. Even so, as she sent him the money she issued a warning: “Robert, if this is a scam, I’m going to tell you now, if it’s the last breath I have, buddy, you’re going to get caught, and you’re going to serve prison time.”

From some people that would be an idle threat. But Mary didn’t make promises she didn’t intend to keep. And when it did indeed prove to be a scam, she’d find a powerful ally: FBI agent Frank Gasper.

Gasper worked in the New York office for years, chasing after organized crime gangs there. In 2010, he and his wife wanted a change, so they moved to North Dakota, where he worked in a small FBI bureau in Bismarck.

From that unlikely spot, Gasper soon found himself investigating a massive sweepstakes scam linked to a gang in Jamaica. It was the same crew that stole Mary’s money. Gasper worked the case for several years, interviewing over 90 victims, including Mary. Their losses ranged from $199 to $850,000. One committed suicide after being cheated.

It was a tough one to crack. But Gasper got a break — a lead on a money mule named Melinda Bulgin who was interrogated after attempting to board a flight to Jamaica carrying $15,000 in cash to gang members. That helped the FBI identify dozens of criminals running a JOLT scam — Jamaican operations linked to telemarketing. In the end, 27 suspects were arrested.

Mary testified at their trial. “I’m determined that these kind of people are going to pay the price,” she said. Four years after Mary got that letter, the kingpin, Lavrick Willocks, 29, was sentenced to six years in a federal prison. Bulgin was sentenced to four years. Gasper, who recently retired from the bureau, said, “If people like these call you, you haven’t won anything; hang up the phone. Don’t be nice, just hang up the phone.”

The crime: Elder fraud scam

On the blissful Hawaiian island of Oahu, few people were more respected by local residents than Honolulu Police Chief Louis Kealoha and his wife, Katherine, the deputy prosecutor in the city.

The pair were not shy about advertising their success, as with the extravagant breakfast they threw to celebrate Louis’ appointment as top cop. The party cost $23,000, but no one among the revelers questioned the tab that day. Those questions would come later.

The seemingly perfect life the Kealohas had built in paradise began unraveling one day in 2013 over an odd incident: The couple reported their mailbox was stolen. The man swiftly arrested for the crime was Gerard Puana — Katherine’s  uncle. The evidence, much of it supplied by Chief Kealoha, seemed overwhelming. But when Puana went to trial, the case ended in a bizarre mistrial after Chief Kealoha blurted out prejudicial remarks from the witness stand.

That caught the attention of reporters. How could a veteran police chief make such a rookie mistake?

Nosing around by journalists produced some suspicious details: Florence Puana — Gerard’s mother and Katherine’s grandmother — was embroiled in a civil lawsuit with the Kealohas. The woman, in her 90s, claimed the couple had betrayed her trust and financially abused her, milking her property to fund their lavish lifestyle.

Alexander Silvert, who was the public defender for Gerard Puana in the mailbox case, suspected the police chief intentionally created the mistrial to avoid scrutiny after he realized his scheme to frame Gerard for stealing the mailbox — and thereby discredit his testimony in the civil case — was going off the rails.

Silvert dug into the case and learned that Katherine manipulated Florence into taking out a $500,000 reverse mortgage on the home she shared with Gerard, then pocketed the proceeds of the mortgage. Silvert passed along his findings, and federal agents launched an investigation.

Two years later, the Kealohas were indicted for financial crimes. When their case went to trial in 2019, 99-year-old Florence Puana gave a four-hour video deposition. The evidence she provided was devastating.

“What happened to your money?” she was asked. “[Katherine] spent it all,” she said. “Did you spend over $23,000 at the Sheraton Waikiki?” She answered, ”No, Katherine did. That was for her husband’s breakfast.”

A jury quickly convicted both Kealohas on federal conspiracy charges. Katherine was sentenced to 13 years in prison. Louis got seven years. Two other Honolulu police officers were convicted of conspiracy in the mailbox frame-up.

Florence lived long enough to see the convictions, and to celebrate her 100th birthday. Her testimony was critical to exposing the corruption within the police department — and to the downfall of Honolulu’s power couple.

Bob Sullivan, the host of the podcast The Perfect Scam, is a veteran journalist and the author of five books, including the New York Times best sellers Stop Getting Ripped Off! (2010) and Gotcha Capitalism (2008).

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