S3E3 Liars (And Lying) 101

IN THIS EPISODE Welcome to John Kiriakou's Spy Academy! Whether chatting with someone informally or conducting a full-on interrogation, every spy needs to know whether or not the person they're talking to is being truthful with them. To get to the bottom of that, we'll start with defining our terms: what do we even mean by "lies" and "liars"? Whether we call them white lies, fibs, fabrications or whoppers, lies cover a lot of psychological territory. Before we can interrogate our liar, we need to understand just how many kinds of liars - and lies - we could encounter. SHOW NOTES If you're enjoying Dead Drop, podcast, please check out the rest of Costard & Touchstone' costardandtouchstone.coms family of podcasts. They cover everything from journalism to Chinese medicine to culture to self help. Your next great podcast obsession is just a click away! Hosted on Acast. See acast.com/privacy https://acast.com/privacy for more information.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:36Speaker 03

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• 0:54Speaker 07

  This podcast, it's a Coster and Touchstone production.

• 0:57John Kiriakou?

  Just as COVID began to grip the nation and the world, and I mean like the first week of COVID, I received an unsolicited email from somebody calling himself David Sassoon. David Sassoon said that he and I had met each other about 15 years earlier at the CIA. I had a fleeting memory of maybe meeting somebody that could have been him. He was wearing Army fatigues. He asked me for directions. I gave him the directions and I forgot about it. Well, he said, his name was David Sassoon and that he was the heir to the Sassoon family

• 1:42John Kiriakou?

  fortune. He had a family trust worth more than $1.5 billion and that the leadership of the trust wanted to hire me to head up an investment arm that would focus on Greece and Israel. I wasn't making very much money at the time. Frankly, I was in something of a dead-end job and this sounded like a gift from heaven. He sent me a contract. The salary was very generous. The benefits were even more generous. And I began flying back and forth between Athens, Greece, and Washington every two weeks. I should have known that David Sassoon was a liar. There were always problems.

• 2:26John Kiriakou?

  Problems like the payroll money didn't arrive on time. Problems like I couldn't get in touch with the CEO of the company. And when I finally did get in touch with him, he sounded suspiciously like David Sassoon. The next thing I knew, the CEO committed suicide. But when I Googled it, thinking that I would find an obituary in a Geneva, Switzerland newspaper, when the head of a $1.5 billion trust committed suicide by jumping out of a window of a hospital, I found nothing. I kept telling myself, he can't be lying because he hasn't asked me for anything. I'm not out of pocket a single dollar.

• 3:11John Kiriakou?

  I should have listened to my gut because in the end, literally everything he told me was a lie. David Sassoon fooled a lot of people. He even fooled Secretary of State Mike Pompeo, related to a speech that Pompeo ended up making in Greece. The truth is that David Sassoon's name is not even David Sassoon. It's Khalid. I don't even know what his last name is, but it turns out he's half Egyptian and half Sudanese. He's not Jewish, he's Muslim, and he's not Greek. Everything about him was a lie. I ignored my gut and I ignored the warning signs that the CIA had taught me to be on the lookout for. I'm John Kiriakou.

• 3:55John Kiriakou?

  Welcome to Dead Drop, or should I say, welcome to John Kiriakou's Spy Academy. I hope you came prepared. But before we open the academy's doors, I want to thank you for listening and for doing all of these proactive things, for liking, rating, reviewing, and commenting on the podcast if you're so inclined. You doing these things for our benefit really does make a difference and we really appreciate it. The secret world, being a world of secrets, is also therefore a world of lies and liars. Secrets demand keeping and keeping secrets invariably demands lying in order to keep the secret's secret.

• 4:37John Kiriakou?

  The bigger and more dangerous the secret, the more and the bigger the lies. It's elemental. As I've mentioned a few times over the course of this podcast, when the CIA recruits, they're on the lookout for sociopaths because they want to avoid them. Nobody can trust a sociopath not to lie. It's what makes a sociopath a sociopath. But with that said, the agency does seek and recruit people with sociopathic tendencies. While most people see black and white clearly, they struggle with the ocean of gray that lies between. People with sociopathic tendencies, on the other hand, have little difficulty navigating that gray. That's not because they have no conscience. Quite the contrary.

• 5:21John Kiriakou?

  For most of us, it's all about our conscience. Now, of course, I'm not talking about spies who do what they do for the paycheck, the Robert Hansons of the spy world. I'm talking about people like, well, like me, like my friends, Tom Drake and Jesslyn Radak, like Ed Snowden, and a growing community of whistleblowers who don't even realize that they are whistleblowers. They just think they're doing their jobs or meeting their obligations or upholding the vows they took to uphold the US Constitution. Whistleblowers are truth tellers, after all. The truth tellers all hew to a higher purpose, the truth.

• 6:02John Kiriakou?

  Standing on the other side of this divide are the liars. Before we go any further though, we need to define our terms. What exactly do we mean by a liar and by lies? Looking at human behavior in general, we have created a whole menagerie of lies. Little white lies, fibs, distortions, exaggerations, canards, fallacies, misstatements, half-truths, falsehoods, prevarications, and whoppers. What sets a lie apart is the stone-cold intentionality behind it. Liars know they're lying.

• 6:42John Kiriakou?

  That three-letter word, lie, contains a whole pecking order of dishonesty. At one end of the lying spectrum sits the white lie or the benevolent lie. In his book, Loving Each Other: The Challenge of Human Relationships, psychologist Leo Buscaglia wrote that people who tell white lies justify them by saying that they didn't want to hurt someone's feelings. They didn't want to make someone feel bad. They didn't want to offend their romantic partner who just cooked them the worst meal of their life, but they say they liked it anyway. That lie could well bite them in the ass or end up on their plate again. There's the exaggeration, a blend of truth and lies.

• 7:27John Kiriakou?

  I caught a fish. As to how big it actually was, well... When we dive more deeply into how a good spy or interrogator needs to parse each informant's words, we'll explore how to navigate the muddy waters where lies and truth blend together. The trick there is in discerning the foundation of truth within. That's where research and due diligence pay off. Fabrications are a different and more dangerous form of lying. There, the person doing the fabricating is relaying information they simply don't know is false. Generally, this is motivated by a desire to injure someone and falls into the world of deception and psychological operations.

• 8:11John Kiriakou?

  Recognizing fabrications can be difficult and one's success may rest on knowing the reputation of the person doing the fabricating. Deception itself is a form of lie where the liar endeavors to create a false impression. Deception is part of a psychological operations campaign since it helps build a misleading impression. In military operations, it has been one of or the decisive factor standing between success and failure. During World War II, British intelligence pulled off an ingenious deception called Operation Mince Meat.

• 8:50John Kiriakou?

  This was the brainchild of Lieutenant Commander Ian Fleming, the future James Bond author. Operation Mince Meat landed a dead body on a Spanish beach as part of an audacious plan to pull the Germans into believing that the Allies, who planned to invade Sicily, were really planning to invade Greece and Sardinia.

• 9:13John Kiriakou?

  So after British intelligence got a hold of his dead body, Glynn Wer Michael, a tramp who died from eating rat poison, became Captain Acting Major William Martin, an officer in the Royal Marines, on a mission of some kind whose briefcase contained hints of the invasion deception. The British went to great lengths to create a persona and a personal history for this fictitious Captain Martin. As we all know, Operation Mincemeat worked to perfection, not merely a good lie, but a great lie. Like exaggeration, the hybrid lie contains both truth and false elements. It's often associated with dictatorships in which the government makes statements that reflect truth,

• 9:58John Kiriakou?

  but only if you understand the realities of your environment. When the East German government constructed the Berlin Wall and its other border fortifications, it was referred to as the anti-fascist protective barrier. See, not a wall filled with negative implications, but protection from the fascists. Well, gangsters work the same way. The East German government told its citizens that the wall was built to protect them from Westerners who were trying to illegally enter East Germany. But the East Germans weren't stupid. They knew that the wall wasn't there to keep anyone out. It existed to keep them from leaving East Germany. Though the government never spoke the truth, pretty much everyone under their thumb knew the truth.

• 10:43John Kiriakou?

  In 1984, Big Brother surfs forever on hybrid lies. "We've always been at war with East Anglia." "We've never been at war with East Anglia." There's the self-protective lie. "You screwed up, no one can know, or your ass is grass, you'll get shit canned so hard you might never be employable again, etc., etc." So you lie self-protectively. Perhaps technology ate your homework, or an expendable coworker did it, or maybe even the dog. The point of the exercise and the lie is to keep your ass covered. Let the rest of the chips fall where they may. There's the manipulative lie. That's lying with real intent when you really want to get your way.

• 11:28John Kiriakou?

  On an interpersonal level, it's telling your buddy that his romantic partner, who you hate, is cheating on him, when actually, they aren't cheating. Other forms of this kind of lying include blame shifting, gaslighting, and playing the victim. Blame shifting is CYA on steroids. After approaching the Soviets looking for money in 1985, CIA officer, I would call him CIA traitor Aldrich Ames, compromised more highly classified CIA assets than any other intelligence officer in American history until the arrest of FBI agent Robert Hanson in 2001. To protect their asset from the FBI and the CIA as the intense hunt for Ames began,

• 12:14John Kiriakou?

  the Soviets fed the CIA a deliberate piece of misinformation, claiming that the mole was stationed at the Warrenton Training Center in Warrenton, Virginia, a highly restricted communications and intelligence facility. Believing the lie they'd been handed, CIA mole hunters spent nearly an entire year aggressively investigating 90 employees at the Warrenton facility, eventually narrowing the list down to 10 potential suspects. Investigators bogged down, sifting through problem personalities at the communications base, while Ames, comfortably stationed thousands of miles away in Rome, continued to betray CIA assets.

• 12:58John Kiriakou?

  Gaslighting has become kind of fashionable lately among a certain class of liars. The point of the exercise is emotional abuse and psychological manipulation. One person tries to make another person doubt their memory, their perception, even their sanity. The term comes from a 1938 stage play and movie about a seemingly genteel husband using lies and manipulation to isolate his heiress wife and persuade her that she's mentally ill. Meanwhile, he's robbing her blind. Specifically, the wife is perturbed when the gaslights in the house periodically dim, as they normally would if a lamp were lit elsewhere in the house, causing the gas pressure to drop.

• 13:41John Kiriakou?

  When she asks the servants about the pressure drop in the gaslight, they tell her that nobody else is in the house. But of course, her husband is in the house. He's upstairs, searching the rooms for jewels. That's why he turned on the gaslight. When a liar plays the victim, they commandeer a situation or even a crime away from the actual victim and to them.

• 14:06John Kiriakou?

  For example,

• 14:08John Kiriakou?

  "Are you cheating on me?" "No, I'm not cheating on you." "Well then, how do you account for A, B, C, and D, which I know for a fact that you did?" Then the response is, "You know what? You are mentally ill. If you think I'm cheating on you, you are mentally ill."

• 14:27John Kiriakou?

  And then you catch them red-handed. That's gaslighting. False flag operations are a scaled-up version of playing the victim. Germany played the victim in 1939 when they accused Polish troops of firing on them as the precursor for formally starting World War II. And finally, there is the bold-faced lie, the big lie. Let's say about election 2020. That is a bold-faced lie. It relies on the repetition of something which is generally known to be untrue. But the informant, or in this case, the President of the United States, hopes to create confusion or to undermine the reputation of his target, in this case, free and fair elections.

• 15:12John Kiriakou?

  Cyclist Lance Armstrong repeatedly and fiercely denied using performance-enhancing drugs, PEDs, while competing and winning seven Tour de France titles. Determined to clear his reputation, Armstrong sued his accusers, ruined their reputations, and insisted that he was clean, calling the accusations against him lies. Well, in 2013, he confessed to Oprah Winfrey that he had doped throughout his entire cycling career. That is lying on steroids. Bill Clinton famously claimed not to have had sex with Monica Lewinsky,

• 15:55John Kiriakou?

  but once we determined what the definition of "is" was and that blowjobs were sex too, we all felt in need of a shower afterwards to wash away the stank. That's the stank of Bill Clinton's lie.

• 16:10John Kiriakou?

  Bold-faced lies can be risky to the liar, but they also can waste considerable investigatory time, time, energy, and resources, while investigators chase down wild geese instead of the truth. So there's that. When we hook anyone up to a lie detector, what we're trying to depict and measure is evidence of intent to deceive or of past deceptions. Most of us, and speaking for myself, I can tell you it's a fact, get extremely nervous when hooked up to a lie detector. There's nowhere to hide. Our own bodies can betray us. While we all have a relationship with lying and while we all lie, being human, we may not necessarily be very good at lying.

• 16:56John Kiriakou?

  Liars, on the other hand, are good at lying. Their relationship with the truth is more situational. That makes them unreliable. Worse, it can make them dangerous, especially to others, like, say, to a spy. This is why it is imperative for a spy, if they're going to remain a spy for very long, to know how to spot liars as quickly as possible. Ideally, as soon as any lie crosses the liar's lips. For spies, being able to spot liars is truly a life-and-death skill.

• 17:33John Kiriakou?

  Before we get to the nitty-gritty of liars and lying, I want you to appreciate lying's incredible scope, albeit from a spy's perspective, even within the context of lying itself. That's lying as opposed to all of its lesser variations. There is remarkable range and latitude. I'm not trying to describe the entire history of lying and liars here. That could be easily a podcast unto itself. For our purposes, though, there are five liars whose stories, I think, are all incredibly instructive as we focus in on the best ways to spot these liars and their lies.

• 18:12John Kiriakou?

  Plenty of historians consider the Greeks' wooden Trojan horse as perhaps history's greatest lie. For those who haven't seen the movie, or who need a light refresher, as the Greek Trojan War entered its 10th year, the Trojans, which were in what is today, Western Turkey, believed that the Greeks were exhausted by the war, and were on the verge of surrendering. One morning, they awoke to find the Greeks gone, literally gone, and a giant wooden horse, a peace offering, and a Greek soldier named Senon left behind. In modern parlance, Senon's job was sales.

• 18:53John Kiriakou?

  He was the explainer, tasked with smoothing over any of the rough narrative edges this strange gift might provoke. Senon claimed to the Trojans that the Greeks built the horse as large as they could, so that the Trojans couldn't take it into their city. In other words, "Take the horse into your city, Trojans." That's what it comes down to. So to ice that cake further, Senon pointed out that if the Trojans did bring the wooden horse inside their walls, they would win the goddess Athena's favor, and eventually conquer Greece and the Greeks. Finally, Senon reminded the Trojans that if they harmed a sacred offering from the gods,

• 19:37John Kiriakou?

  like the horse, they risked bringing catastrophe down on Troy. Senon may have swayed most of the Trojans, but he didn't sway them all. One Trojan named Leacuan smelled a rat. He attacked the wooden horse with a spear, plunging it into the horse's side. Leacuan and his two sons died shortly thereafter when two sea serpents attacked them. That was further evidence to the Greeks that the gods wanted them to succeed. One more voice of reason tried to warn the Trojans. Cassandra, a Trojan priestess dedicated to the god Apollo, warned the Trojans not to take the horse into the city.

• 20:20John Kiriakou?

  Cassandra had been given the gift of prophecy from Apollo, but because she hadn't returned his love, Cassandra was condemned to never have her prophecies believed. And so the Trojans did the wrong thing. Having kept the mightiest army at bay for 10 years, they set themselves up for failure by buying a lie and letting that mighty army literally inside their gate. If you don't know the story, the Greek army was inside the giant horse. The spies take away from this story? Be skeptical. Stay skeptical. Don't ever stop being skeptical.

• 21:01John Kiriakou?

  If you're enjoying Dead Drop, and of course, we hope you are, then while you're waiting for new episodes, I'd like to suggest another great granular story podcast from the Costard and Touchstone family. Just the Photographer with David Swanson does for photojournalism what Dead Drop does for spies. Pulitzer Prize-winning photojournalist David Swanson tells you stories his amazing news photos just can't. What it felt like being in all those dangerous places like war zones and natural disasters, doing his job taking pictures. Having been to a few war zones myself, I can tell you this, Just the Photographer will put you right there, on the ground, right next to David. Inside his head, in fact.

• 21:45John Kiriakou?

  It's a hell of a podcast, and you can find it wherever you find your favorite podcasts, or at costardandtouchstone.com. There's a link in this episode's show notes. In fact, you'll find lots of great story podcasts at Costard and Touchstone, like The Donor, a DNA horror story, The Hall Closet, Sage Wellness Within, and the How Not to Make a Movie podcast. Who knows? Your next favorite podcast might be just a click away. Now, back to Dead Drop. Since we're in the classical world, let's stay there and talk about Herodotus. A Greek geographer and historian working in the 4th century B.C., Roman orator Cicero

• 22:26John Kiriakou?

  first called Herodotus "the father of history," because his "histories," that was the name of the book, were the first systematic and investigative inquiry into past human events in the Western world. As he himself put it, his mission was to make this inquiry, quote, "so that human achievements may not become forgotten in time, and great and marvelous deeds, some displayed by Greeks, some by barbarians, may not be without their glory," unquote. Herodotus's innovation was there in his title. Instead of just listing dates or repeating unverified myths like his predecessors, Herodotus's "historia," meaning "inquiry," did exactly that.

• 23:10John Kiriakou?

  It inquired into the characters and their stories. Nobody had ever thought to actually write about history before. Herodotus traveled extensively. He talked to people, he listened to their stories, and then he reported what he had heard. The Greek philosopher Plutarch, however, was not a fan. He accused Herodotus of poor citations, outright fabrications, fantastical imaginings, and ancient slander. Others faulted how Herodotus's histories mixed verifiable facts with tall tales, folklore, and unverified hearsay. He doesn't seem to have fact-checked the people he talked to, like a modern journalist or historian might.

• 23:55John Kiriakou?

  And his flair for creativity often stretched the truth so as to make a better narrative. As Mark Twain would later put it, and this is one of my favorite quotes, "Never let the truth get in the way of a good story." That's the takeaway. Some liars are very, very convincing because they're great storytellers, and they know that about themselves.

• 24:18Alan Katz?

  It's Alan, Dead Drop's producer, and it's time for our October meeting of the Quince Fan Club. John, is there a piece or a couple of items in your closet or chest of drawers that your hand always finds first?

• 24:32John Kiriakou?

  Actually, Alan, there are a couple of Quince pieces in my growing collection. There is a sweater that I absolutely adore. It's actually the first Quince piece that I bought. It's cashmere, and it is the softest, yet lightest, cashmere sweater I've ever owned. And I just bought a pair of linen trousers. I'll tell you, when I go to the doctor, I always wear jeans. And then I get on the scale, and the doctor's like, "Oh, you should lose three pounds." Well, my jeans are three pounds. And so I bought these linen trousers, I wore them to the doctor, and he says, "Hey, buddy, you lost a pound or two." The truth is, these linen trousers are light, they're beautiful, they're comfortable, and now they are my go-to pants.

• 25:17Alan Katz?

  For me, it's my two 100% Mongolian cashmere sweaters. I love how they feel. I love how they make me feel. And because they go with everything. They make getting dressed easy. And being somewhat lazy that way, I think you and I both love the easy part, don't we?

• 25:35John Kiriakou?

  Quince focuses on high-quality wardrobe staples made with premium materials, like that 100% Mongolian cashmere we were talking about, or organic cotton and merino wool.

• 25:47Alan Katz?

  Everything is timeless and versatile. As we've said here, Quince makes classics, but without all the stodginess that often comes with them. And we haven't even mentioned how reasonable everything at Quince is priced.

• 25:59John Kiriakou?

  Their 100% Mongolian cashmere sweaters start at just $60, giving you the softness and the quality you'd expect from a luxury brand without the luxury price tag.

• 26:11Alan Katz?

  Not to go all Game of Thrones, but winter is coming, and when the temperatures start to drop, Quince is the perfect destination to find everyday clothing staples like premium down jackets and classic wool outerwear.

• 26:23John Kiriakou?

  All versatile layers designed to keep us warm and comfortable all season long, and always priced 50 to 80% less than similar brands.

• 26:33Alan Katz?

  Quince does that by working directly with ethical factories that cut out the middlemen, so you're paying for high-quality, not brand markup. The ethical part is very important.

• 26:43John Kiriakou?

  In these here times, it absolutely is. Find your next fall favorites at Quince. Download the Quince app for app-exclusive offers, or go to quince.com. Get free shipping on your order and 365-day returns, now available in Canada and the UK too. And when Quince asks where you heard about them, let them know it was Dead Drop. It's the best way to support the show.

• 27:47John Kiriakou?

  Charles Ponzi was a great storyteller, too. He was also charismatic, ambitious, and smooth-talking, and without a doubt, one of history's most infamous con artists. Stick a giant pin in Ponzi's con artistry. Although he stood only five foot two and just weighed 130 pounds, Italian immigrant Ponzi radiated confidence. Even when his own financial house of cards began to collapse years later, Ponzi maintained an aura of cheerful invincibility. Till the end, he believed he might somehow pull off a miracle and pay everyone back. Those are also important to understand Ponzi's story from a spy's perspective.

• 28:31John Kiriakou?

  He wanted to pay people back, and he was likable.

• 28:36John Kiriakou?

  Though Ponzi himself grew up in poverty, his ancestors had been wealthy. His own mother used the title "donna" to reflect that more comfortable past, but the family had fallen on hard times. That made Ponzi's immigration to America inevitable. On November 15, 1903, Ponzi arrived in Boston aboard the ship SS Vancouver. Being smart and industrious, he quickly learned English, and he spent the next few years doing odd jobs up and down the East Coast, eventually taking a job as a dishwasher in a restaurant where he slept on the floor. But being smart and industrious, he quickly worked his way up to waiter, but he got fired for theft and for shortchanging customers.

• 29:21John Kiriakou?

  So, not yet that smart, but still industrious. In 1907, unable to crack success in America, Ponzi moved to Montreal, where he became an assistant teller in a newly opened bank that mostly served Montreal's Italian community. It was while he was working at the bank that Ponzi first lit on the "rob Peter to pay Paul" idea. While Ponzi didn't invent the scheme that ultimately took his name, he perfected it, and he took it to new corrupt heights. That's why it's called "The Ponzi Scheme."

• 29:59John Kiriakou?

  The bank where Ponzi worked paid 6% interest on bank deposits, double the going rate at the time. But his bank was growing rapidly as a result. Ponzi eventually became a bank manager. But when the man who owned the bank absconded with all of the money, the bank collapsed. Ponzi may have been out of a job, but he was still industrious. One day, not long after, Ponzi walked into the offices of a former bank customer, Canadian warehousing. No one was in the office at that moment, but Ponzi spied a company checkbook out on a desk. So, of course, he wrote himself a check for $423.58.

• 30:40John Kiriakou?

  That's the equivalent to about $15,000 today, and he forged a signature. When the company realized what Ponzi had done, the police confronted him. Ponzi held out his wrists and said, "I'm guilty." That cost him three years as inmate #6660 at St. Vincent de Paul Federal Penitentiary on the outskirts of Montreal. Unable or unwilling to tell his mother the truth that he was now a criminal serving prison time, industrious as ever, Ponzi instead mailed her a letter telling her that he had found a job as a special assistant to a prison warden. Three years later, back out on the street, Ponzi continued to travel looking for work.

• 31:24John Kiriakou?

  In 1919, his fortunes began to change. He set up a small office at 27 School Street and set about selling business ideas to contacts in Europe. While the ideas themselves went nowhere, the back-and-forth letter-writing itself presented the industrious Ponzi with the raw materials of both his genius and his actual fortune. Back then, if you wanted someone in another country to mail something back to you, you would buy something called an "international reply coupon," an IRC. I used to use them as late as the 1970s, when I wanted a foreign radio station to confirm that I had actually heard the station. These coupons allowed a person in one country

• 32:08John Kiriakou?

  to pay for the postage of a reply to a correspondent in another country. But if the cost of the postage was different between the countries, that difference could be exploited for profit. At that very moment, inflation after World War I had greatly decreased the cost of postage in Italy, as expressed in US dollars. That meant an IRC could be bought cheaply in Italy and exchanged for US stamps of higher value. Those higher-priced stamps could then be sold, and a profit realized. The bigger the difference, the bigger the profit. Having found a weakness in the system, Ponzi saw an opportunity to make some real money. He'd later claim that the net profit on these transactions,

• 32:52John Kiriakou?

  after expenses and exchange rates, was more than 400%, and this was entirely legal. In modern financial terms, we would call this a form of arbitrage, or profiting by buying an asset at a lower price in one market and then immediately selling it in a market where the price was higher. With money suddenly pouring in, Ponzi quit his job. He was then working as a translator, and he plunged himself into this IRC scheme. Unable to get a bank loan to grow his company, Ponzi set up a stock company. His new goal: raise money from the public. Why not? He also went to several of his friends in Boston

• 33:35John Kiriakou?

  and promised that he could double their investment in 90 days. At the time, banks were paying around 5% interest. Not 100% in 90 days. IRCs, Ponzi insisted, would make them all way, way more money. A few of his friends ponied up, and each of them was paid back exactly as Ponzi had promised. They got $2,000 for their $1,250 investment, a profit of $750 in 90 days. More money poured into Ponzi's company, but even a simple financial analysis would have shown that the operation was actually running at a loss, a big and growing loss. But as soon as new cash kept flowing in,

• 34:20John Kiriakou?

  existing investors could be paid with the new money. The enterprise would appear solvent and solid, as Ponzi made no effort to generate legitimate profits. Maintaining the scheme was the only way that he could keep the whole thing going. That meant taking the scheme beyond Ponzi's original investment pool, working-class immigrants like himself. Gradually, word of Ponzi's remarkable returns traveled upwards to Boston's wealthy Brahmins. Now, the patrician class was aware that a huge money-making opportunity was in their midst. At its peak, nearly 75% of Boston's police force had invested in the scheme.

• 35:05John Kiriakou?

  Ponzi's rapid rise naturally drew suspicion. When a Boston financial writer suggested there was no way Ponzi could legally deliver such high returns in such a short period of time, Ponzi sued for libel, and he won $500,000 in damages. On 26 July, The Post started a series of articles that asked hard questions about the operation of Ponzi's money machine. The articles pointed out that though Ponzi was offering fantastic returns on investments, he himself was not investing in his own company. The Post's articles caused a panic run on the securities exchange company.

• 35:47John Kiriakou?

  Ponzi paid out $2 million in three days to a wild crowd outside his office. He canvassed the crowd, passed out coffee and donuts, and cheerfully told them that they had nothing to worry about. Many changed their minds and left their money with him. However, this attracted the attention of Daniel Gallagher, the US attorney for the District of Massachusetts. Gallagher commissioned Edwin Pride to audit the securities exchange company's books, an effort made difficult by Ponzi's bookkeeping system, consisting merely of index cards with investors' names on them. In the meantime, Ponzi hired a publicist, William McMasters.

• 36:30John Kiriakou?

  But McMasters quickly became suspicious of Ponzi and his endless talk of postal reply coupons, as well as the ongoing investigation against him. He later described Ponzi as "a financial idiot who did not seem to even know how to add." The investigation into Ponzi began in late July, when McMasters found several highly incriminating documents that indicated Ponzi was merely robbing Peter to pay Paul. In his article, McMasters declared Ponzi "hopelessly insolvent", reporting that while he claimed $7 million in liquid assets, he was actually at least $2 million in debt. With interest factored in, McMasters wrote,

• 37:14John Kiriakou?

  "Ponzi was as much as $4.5 million in the red." Further trouble arose when Massachusetts Bank Commissioner Joseph Allen became concerned that if major withdrawals exhausted Ponzi's reserves, it would bring Boston's banking system to its knees. Allen suspected that Ponzi wasn't nearly as well-financed as he claimed. Allen ordered two bank examiners to keep an eye on Ponzi's accounts. From there, things came unglued quickly. As Ponzi's criminal past in Montreal resurfaced, his limited wiggle room began to vanish, and suddenly, everyone was on to him. On August 11, amid reports that he was about to be arrested any day,

• 37:58John Kiriakou?

  Ponzi just surrendered to federal authorities. He was charged with mail fraud for sending letters to his marks telling them that their notes had matured. That brought down Ponzi's bank, of course, along with five other banks. This wiped out Ponzi's investors, who were happy to get less than 30 cents on the dollar. They lost about $20 million in 1920. That's about $321 million today. For comparison, Bernie Madoff's Ponzi scheme, the one that collapsed in 2008, cost his investors about $18 billion, 53 times the damage that Ponzi did to his investors.

• 38:42John Kiriakou?

  Bernie Madoff made Charles Ponzi look like a relative amateur. The federal government charged Ponzi in two indictments with 86 counts of mail fraud. Facing life in prison, and at the urging of his wife, Ponzi pleaded guilty on November 1, 1920, to a single count and was sentenced to five years in federal prison.

• 39:06John Kiriakou?

  Unfortunately for Ponzi, both Massachusetts and Florida wanted a piece of him too. Actually, they wanted big pieces of him. Ponzi finally got his freedom back in 1934. But as soon as he was released from prison, he faced deportation back to Italy. By then Ponzi's charismatic confidence had faded. Faced by an angry crowd who awaited him at the prison gates, he told reporters, quote, "I went looking for trouble and I found it." On October 7th, 1934, Ponzi was officially deported. In Italy, Ponzi jumped from scheme to scheme, but little ever came of them.

• 39:48John Kiriakou?

  He eventually got a job in Brazil as an agent for Ala Litoria, the Italian state airline. He spent the last years of his life in poverty, working occasionally as a translator. He died in the charity ward of Hospital Sao Francisco in Rio de Janeiro on January 17th, 1949. He was blind in one eye and partially paralyzed. He left an estate of 75 bucks, which was barely enough to bury him. A story like Ponzi's teaches us a lot. Unfortunately, con men are another group that spies resemble. Both are always selling something, even if it's just their supposed trustworthiness.

• 40:33John Kiriakou?

  The trick with successfully navigating a character like Charles Ponzi is in recognizing that they're selling a lie and then being crystal clear on exactly what lie or lies they're selling.

• 40:48Speaker 00

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• 41:24Speaker 02

  You're listening to Leaf Filter Radio and the guru of gutter protection himself, Chris Koonahan, is here to take your most pressing leaf-related questions.

• 41:31Speaker 10

  Hey, everybody, Chris here. I understand we have Ron on the line. Ron, where are you calling from?

• 41:38Speaker 10

  Uh-oh. Ron, are you calling from a ladder?

• 41:41Speaker 04

  Well, I was. Uh, I wanted to ask Chris what I need to do to get my gutters ready to have Leaf Filter installed?

• 41:48Speaker 10

  Oh, Ron, you don't have to do anything. A Leaf Filter Trusted Pro will come out and clean out your gutters, realign and seal your gutters and install Leaf Filter, America's number one gutter protection system.

• 41:57Speaker 04

  So I didn't need to get on this ladder?

• 42:00Speaker 10

  Ron, Leaf Filter Trusted Pros are in your neighborhood and ready to help. Just visit leefilter.com/gold to schedule your free gutter inspection and get up to 30% off.

• 42:10Speaker 04

  Thank goodness. What was that site?

• 42:12Speaker 02

  That's leefilter.com/gold for your free gutter inspection today. See representative for warranty details. Promotion is 20% off plus a 10% senior or military discount. One discount per household.

• 42:26John Kiriakou?

  On September 30th, 1780, the patriotic citizens of Philadelphia paraded afloat through the streets that depicted Satan handing a stuffed gold purse to a two-faced effigy of General Benedict Arnold. In his book Benedict Arnold, Revolutionary Hero, An American War Reconsidered, historian James Kirby Martin points out that, quote, "Satan stood ready with pitchfork in hand to drive Arnold to hell as his reward for the crimes he had committed against his innocent and trusting countrymen. Newspapers throughout the new nation portrayed him as the very personification of deception, hypocrisy, avarice, and treason."

• 43:11John Kiriakou?

  For the first four years of America's Revolutionary War, Benedict Arnold was one of its rock stars. He joined the cause early, a Connecticut merchant protesting British taxes. In 1775, alongside Ethan Allen, Arnold helped to capture Britain's Fort Ticonderoga. The next year, 1776, Arnold led a brutal winter march to Canada, where he oversaw the construction of a makeshift fleet that delayed the British invasion of New York. At the Battle of Saratoga, Arnold led a courageous charge that secured the American victory in spite of suffering a terrible leg wound himself.

• 43:51John Kiriakou?

  But Arnold, for all his skills, was something of a prima donna. He slowly soured on the revolution after Congress repeatedly refused to promote him. Then political enemies in Philadelphia accused him of corruption. That left him facing a court martial and heavy financial debt. In 1779, Arnold married a woman named Peggy Shippen. Shippen's family were all loyalists who wanted the American colonies to remain British. Among Shippen's close friends was British Major John Andre, who became head of British espionage in New York. At some point, with Shippen's help, Andre turned to Arnold.

• 44:35John Kiriakou?

  The British promised 20,000 pounds, the equivalent today of more than 3 million pounds or four and a half million dollars for the capture of West Point, then a major American stronghold. George Washington greatly admired Benedict Arnold. That's why he gave Arnold command of the fort in July 1780, having no idea that one of his favorite subordinates had been suborned. Arnold's plot was exposed in September 1780 when American militiamen captured Major Andre carrying papers which revealed the plot. Arnold escaped. Andre was hanged. What drove Arnold to betray America?

• 45:19John Kiriakou?

  For one thing, his marriage. In the history of spying, that's hardly unique. One of America's most destructive moles, the FBI traitor Robert Hanson, sold an awful lot of Americans' secrets because he felt compelled to keep his luxury-obsessed wife happy. Arnold also felt unappreciated by his country and betrayed by what he considered America's radicalizing political leadership. He maintained that the Continental Congress had lost its way, it had become corrupt, and it had abandoned what he felt were the true goals of the revolution. British made Arnold a brigadier general in the British Army, giving him an annual pension and a lump sum payment upfront for services rendered.

• 46:04John Kiriakou?

  Though he would go on to fight successfully for the British, winning small battles and skirmishes from Connecticut to Richmond, Virginia, when he left North America for England, he found more disappointment than anything else. Though well-received by King George III and the Tories, Arnold was frowned upon by the Whigs and by most British Army officers. Why? Because he was a traitor. If the Americans couldn't trust him, why should the Brits? In 1787, he tried North America one more time, opening a merchant business in New Brunswick, Canada with his sons. He found himself as unpopular in New Brunswick as he was in New York, and as unpopular

• 46:49John Kiriakou?

  in most of London where people mocked him as he had been in New Brunswick. He was deeply disappointed that his betrayal brought him social isolation. It brought him mockery in London and ongoing financial struggles rather than the grand fortune and the universal respect that he felt he deserved. He returned to London permanently in 1791, and he died there 10 years later. The Benedict Arnolds of the world can be treacherous on multiple levels. The Benedict Arnolds of the world can be treacherous on multiple levels. They make very willing, double, even triple agents, whose actual loyalties can be hard to discern.

• 47:32John Kiriakou?

  In the name of petty grievances, so many of Arnold's grievances were in fact petty. The Benedict Arnold brand of liar is quite willing to destroy everything so he can just take his ball and go home. What they lack in proportionality, they more than make up for in self-serving greed and in flat-out ignorance. Look out for Benedict Arnolds. They plan to make their agenda your agenda. Finally, let's talk about Frank Abignal. The French-American con man, convicted felon, author, and security consultant, whose documented crimes became the Steven Spielberg-directed movie Catch Me If You Can, starring Leonardo

• 48:17John Kiriakou?

  DiCaprio. Abignal is a fabulist. He just makes shit up. That's what fabulists do. While in fact, Abignal did write bad checks and perpetrated all sorts of petty crimes and thefts targeting individuals and small businesses, he became famous for claiming that while he was still a teenager, he impersonated a Pan American World Airways pilot, a physician, a lawyer, and a university professor, all while traveling internationally and passing millions of dollars in fraudulent checks. But journalistic investigations beginning in 1978 found zero evidence to support most of Abignal's biographical claims.

• 49:02John Kiriakou?

  In fact, later research established that Abignal was in prison for most of the period that he bragged about. Records do support limited airline impersonation, check fraud, travel in Europe and imprisonment in France, Sweden, and the United States. But while Abignal boasted about cashing more than 17,000 bad checks totaling more than two and a half million dollars across 26 countries, federal court records from his actual Pan Am check fraud case show that he only forged 10 checks totaling less than 1,500 bucks. Abignal's greatest con wasn't the teenage crime spree depicted by Leonardo DiCaprio,

• 49:44John Kiriakou?

  but rather convincing the world that the crime spree ever actually happened at all. Fabulists can be convincing, they can be entertaining, they can even be endearing. That's the biggest problem with interrogating them. Something inside you just wants to like them more than you should. That's what makes this kind of liar so dangerous.

• 50:08John Kiriakou?

  Okay, we've talked about the various kinds of liars there are and what makes some of them especially tricky to catch. Are there any other overviews we can use before we get down into the dirty work of interrogation? For instance, do some professions lie more than others? Like, say, politicians, used car salesmen? Do men lie more than women? Do people in different socioeconomic groups lie at different rates? A large study by the Max Planck Institute for Human Development analyzed data from hundreds of experiments. It found that 42% of men and 38% of women lied during the tests.

• 50:48John Kiriakou?

  They also found that men are more likely to tell black lies, that is, lies that benefit themselves at another person's expense. According to data analyzed at Cambridge University, some self-reported surveys estimate that men tell an average of three lies a day, while women tell an average of two lies a day. In a survey done by the British tabloid Express in 2017, more than 25% of all respondents, both male and female, admitted that they don't fully trust their partners. When greater methodological rigidity is in play, academic surveys indicate that men and women lie at an equal rate.

• 51:33John Kiriakou?

  This changes if the survey tries to measure men lying to women versus women lying to men versus women lying to other women. Results varied because of the different kinds of lies being lied. Studies also indicate that people lie less as they age. How about professions? After politicians, newspaper journalists are among the least trusted people. Real estate agents, insurance salespeople, and mechanics get a lot of extra scrutiny from the general public. But from a spy's perspective, it usually doesn't matter what a person does.

• 52:12John Kiriakou?

  The question on the table is what they've done or what they're willing to do. The world's biggest liar is an annual competition held in Cumbria, England. Competitors from around the world have five minutes to tell the biggest and most convincing lie they can. Contestants may not use prompts or scripts. Neither politicians nor lawyers are allowed to enter because they're both deemed to be too skilled in lying. It's a good thing we're on the case, I'll tell you that. Thanks as always for listening. Please don't forget to like, rate, review, and comment on the podcast wherever you're listening to it. That really helps us grow, and that's no lie.

• 52:57John Kiriakou?

  Until next time, I'm John Kiriakou. Dead Drop is written by John Kiriakou and Alan Katz. Costart and Touchstone Productions produces the podcast. And John Kiriakou, Alan Katz, and Nick Mechanic are its executive producers.

• 53:25Speaker 07

  This podcast, it's a Costart and Touchstone production.

• 53:30Speaker 00

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• 54:06Speaker 10

  Hey, everybody. Chris Koonahan here for Leaf Filter. I often give homeowners advice on TV, but I wanted to share my expertise here, too. The question I'm most often asked is, how does Leaf Filter work so well? Well, our trusted pros clean out your gutters, realign and seal your gutters, and install Leaf Filter, America's number one gutter protection system. Leaf Filter inspection and estimate are always free for new customers. Plus, you can get up to 30% off if you go to leaffilter.com/gold. That's leaffilter.com/gold. See representative for warranty details. Promotion is 10% off plus a 10% senior military discount. One discount per household.