It's called Auto Surf, which producers Karin Ingrande and Felicia Kit were responsible for chasing down along with reporter Steve Atkinson. It’s the topic of Steve’s exclusive I-team story tonight on 10news live at 11pm.

I am pretty sure we've uncovered a cyber-age version of the classic Ponzi scheme. The name Ponzi comes from a 19th Century hustler who hailed from Boston and made his fortune hoodwinking the public. As the years have passed, the scheme has reappeared again and again in different forms. Only the "money-making element" changes. The hustler convinces bright-eyed investors he or she has a great money-making idea. I have seen just about every kind of financial carrot hung out there for the trusting to bite on. It can be gold, currency, antiques, seafood, you name it, it's been used.

It's also called a pyramid scheme, the block at the top is the hustler, the rest of the blocks holding things up are the suckers. Usually, the first investors reap some nice rewards -- because a new group of investors has come aboard and this group's money pays off the the first investing group, with a nice profit. Those first investors then became a "word-of-mouth" machine, helping the hustler really sell the scam. It blows up like a balloon and collapses like one too.

I was first exposed to this type of fraud in the 1980s, in the strange case of currency trader and hustler extraordinaire, J. David Dominelli. His scheme took a bite out of La Jolla society, shook up the political establishment and sidetracked the careers of a number of locals, including former San Diego Mayor and AM radio gabber Roger Hedgecock.

Which brings me back to tonight's Auto Surf story. It uses some of the same methods Dominelli used as well as Mr. Ponzi back in 19th century Boston. Like the mumbo jumbo these hustlers use to impress their victims. It's a special terminology unique to the scam, sometimes it’s also used to confuse the victims. Time is critical in these schemes. Time to bring in groups of investors, time to pay them off and bring in more investors, time to rack up as much money as they can before the wheels fall off. Or the cops move in, which is rare these days. Ten years ago, I would be talking to the FBI about this scheme. Not now, they’re chasing terrorists and have no time for this sort of white collar crime. If I may be frank--you have to be pretty darn stupid to get caught. Or unlucky.

I think our I Team has found the tip of the iceberg with this latest version.
How is it different when compared to its predecessors?
Auto Surf used the Internet to sell, sell, sell. That is bad, bad, bad.

It means there is a potential for thousands of victims. Let's hope not because getting money back from any Ponzi/pyramid scheme is difficult at best. It can be an expensive lesson.



Questions? Concerns?

jwblog@10news.com