'Sickening': Miner loses $2m in syndicate shares scam
A MACKAY man has told how he was scammed out of nearly $2 million by an overseas crime syndicate.
Wayne Brown, a longwall electrical and overhauls co-ordinator who grew up in Rockhampton, lost the huge sum after investing in fake shares from US-born scammers operating in the Philippines.
In early 2015, Mr Brown started sending his money to what he believed was a New York-based investment broker called John Paulson.
He thought he was buying shares after the scammers pretended to be from investment houses in the US.
Mr Brown didn't know it at the time but Mr Paulson was not a licensed trader - he was an American criminal living in Manila.
Mr Brown thought he was buying Apple shares but the share certificate turned out to be fake.
"He offered me these Apple shares so I decided to take the shares," Mr Brown told Al Jareeza.
"There was no way in the world I thought anything was wrong because they were ringing me all the time asking if everything was alright, I had no reason to think it was a scam.
"The way they've played me I'm sick inside.
"Going down that coal mine every day is hard work, I don't see my family for five days out of seven."
In the program, Mr Paulson was said to be sticking to a script which scammers commonly use.
That was coupled with well proven psychological techniques used to entrap their victims.
Sitting at his computer in Manila, the fake John Paulson worked on his victim.
The Australian was persuaded to buy more bogus shares to the value of US $700,000.
As in most scams, Mr Brown's portfolio appeared to do well.
"I thought he was legit, he had all this knowledge of the share market and everything he put forward to me was a good case," Mr Brown said.
After Mr Paulson hooked Mr Brown into the scam, another gang member took over to keep Mr Brown spending money.
"John Paulson disappeared probably 12 to 18 months after I first started talking to him and then Daniel came onto the scene," Mr Brown said.
The new broker in the picture went by the alias of Daniel Johnson.
But he too was an American criminal living in Manila.
Johnson constantly called to pry more money from Mr Brown for shares that were never bought.
By now, Mr Brown believed his portfolio was valued at $5 million.
He wanted to cash it in - but there was a catch.
The scammers in Manila told him before he could sell his shares he needed to pay US tax.
"The tax money was around US$800,000 that I said I had to pay before I could get this cash back from my portfolio," Mr Brown said.
As time dragged on, the scammers constantly came up with new ways to explain why they were not able to pay Mr Brown his money.
Eventually Mr Brown was passed onto yet another Manila based American criminal again pretending to be based on Wall Street, called Jeffrey Cohen, who was tasked with closing his account.
"Jeffrey said you got to pay this much money, for example, and then we'll give you the funds so we can release your money to you," Mr Brown said.
The amount he was asked to fund was $47,000 as the scammers tried to squeeze one final payment from Mr Brown.
By now, Mr Brown had lost more than $1 million.
Private investigator Ken Gamble then contacted Mr Brown to tell him that he had been scammed.
"He was pretty shocked, a little bit baffled at what was going on but he was also relieved," Mr Gamble said.
"He had suspicions that something wasn't right.
"He just didn't know what was going on, he didn't know who to talk to."
Mr Brown then hired Mr Gamble to track the scammers and recover the money he'd lost.
"I invested US$1.4 million with these blokes, it was sickening actually," he said.
I'd invested that much money into my future and then to find out there wasn't any cash there, it was real sickening" Mr Brown said.
More than 5000 kilometres away in Manila, the criminals are unaware that their victim knows he's been alerted to the scam.
The tables are about to be turned.
"I said firstly the most important thing to do is not to let on to them that you know that you're being scammed because I'm going to have to use you to continue to communicate with them to gather evidence that will be vital for the case," Mr Gamble said.
Mr Brown kept getting calls from the con man Jeffrey Cohen.
More appeals were made for him to pay the money to free his shares. Mr Brown played along with him.
"My job was to keep them on the hook as they've been doing to me for the last three years and just trying to turn the tables and keep them in a conversation telling them I was going to give them the cash to finalise these deals," he said.
"It's so hard talking to people that you know have ripped you off and you've got to talk nice to him just to keep them on the hook.
"It's just so hard knowing that they're on the other side of the world laughing at you."
Mr Cohen became more desperate and aggressive in a bid to extract a final payment from his victim as Mr Brown continued to give him the run- around.
Armed with his 1000 page dossier of evidence, Mr Gamble enlisted the help of local police.
"We've done more than just file a complaint," he said.
"We've done an investigation, we've gathered evidence, we've profiled the suspects.
"They (local police) are not skilled in financial crimes - particularly cross-border crimes - I bring expertise in the area of cross-border fraud and and how it all works."
Not knowing the noose was tightening around them, the crime group tried to extract more cash from Mr Brown.
"You don't expect your hard earned cash to be taken away from you," Mr Brown said.
"I've got to sell my house and I've also got a bank loan I've got to pay back which I've given these people.
"I need that money back so I have a lifestyle."
The fraud operation finally comes to a crashing end.
In a high-security gated community, Mr Gamble searched for the home of the criminal who went by the name of Daniel Johnson before a team of police officers, including specialist cybercrime police, raid the address in an early morning raid.
It turned out that the man who called himself Daniel Johnson was really Richard Racioppi Jr, a 56-year-old New Yorker.
Another man in the house, Barry Rosen, was the brother of the alleged fraud stirrer known as Jeffrey Cohen.
What's been going on in this house for many years is about to be exposed.
Upstairs, the police find evidence of what appears to be a sophisticated fraud operation, including scripts to entice investors, laptops, and a list of dozens of names of investors most of whom don't yet know they may be the victims of a scam.
Mr Gamble needs to find evidence linking the alleged fraudsters to Mr Brown and he strikes lucky on one computer.
"This is DPJ Tax, which is the company that Wayne Brown invested the money in, so the Wayne Brown emails are right here on the computer. So there's the evidence right there," he said.
"One of these emails was just sent last night."
Mr Racioppi Jr and his two house mates are formally arrested and accused of cybercrime.
After so many months of investigation, the arrests mark a very special day for both Mr Gamble and Mr Brown.
"I'm looking at the light at the end thinking they're going to put them in prison, give me my cash back or at least let people know that there are people out there like this," Mr Brown said.
With the alleged chief fraudster now in custody, Mr Gamble said the hard work now begins.
"Every pressure point that we can hit we will apply pressure there in order to get our clients' money back," he said.
'That may involve filing criminal cases, it may involve filing civil cases, whatever it takes."
Speaking to The Morning Bulletin, Mr Brown said he was not optimistic about recovering his money.
"Since the arrests I've heard they've all been released on bail and have had their passports returned," he said.
"My big fear of course is that they will flee the country.
"At the moment it's not looking good.
"I did all my homework and I still got scammed."
Some of the above story is from an interview that appeared on the program 101 East Swindle Kings of Manila, produced by Al Jazeera.