Monem Salam:  
Welcome to Halal Money Matters, sponsored by Saturna Capital. You know, sometimes you get these calls, these texts asking you for you know, somebody's in trouble. They're looking for help, and they're really playing on your emotions. And other times, when you're trying to open up a bank account or do some simple transaction with a bank or financial institution, you get caught in a paperwork or sign this or sign that. Today, we have a very special guest, David Skade, who is going to be talking to us about scams and affinity marketing and how we get caught up in these type of things, and what banks do, or financial institutions in general do, to try and protect us from these things. He has a tremendous amount of experience being an internal auditor for many European banks, and really excited to have him on the show today. Let's get started.

[music]

Welcome, David.

David Skade:  
Hi, thank you.

Monem Salam:  
I appreciate you taking the evening time. I know you're in the UK, so…

David Skade:  
That's okay.

Monem Salam:
So, you know, I wanted to, actually, you know, have a, have a podcast in regards to, you know, just thinking about it from a perspective of the we've had so many you hear stories of online scams and, you know, people being ripped off with their money and those type of things. So I thought it would be a good idea for us to be able to spend do a little bit more deeper dive into, you know, the what actually happens, not only in the back end for the financial institutions, but also, like, how do people are, you know, how do they? How do people get suckered into it? I guess I should say, for lack of a better word. And so there's kind of three areas that I really wanted to focus on. One of them was going to be just the AML side of it. The second one was going to be just the scam. And the other one, which is actually part of the scamming that people do, it's called affinity marketing, which is basically you in your own either ethnic group or religious group or those type of things actually are able to because of your maybe standing the community or those things. You're, it's easier for you to scam other people than not. So those are the three, three areas that I was thinking about talking about.

David Skade:  
Okay, great.

Monem Salam:  
So let's start with the AML, which is the anti money laundering. And I know you have a pretty deep background in it, so I appreciate you taking the time to come on? And I wanted to start off and really talk about this from a perspective of, you know, a lot of people talk about when they open up a bank account or an investment account, it's really cumbersome, right? You need your passport, you need these type of things, and so kind of help us explain why those checks and balances are put into place and what actually happens on the back end.

David Skade:  
So people always say it's complicated. It's actually quite easy from a banking perspective, because it's a legislative requirement, so banks don't make this up, and what you have to do is identify and verify who you are when you go to the bank, so I can tell you I'm David' Skade, but you haven't confirmed that, so you need to confirm who I am. So that's why the bank will ask for your passport or a government issued document that confirms who you are. So a passport is the easiest one to use, or a national identity card, because it's backed by the government. You've had to go through a number of loops to do that. And the other thing you have to have is residential address. There's actually three criteria you have to the bank has to confirm your name, your date of birth and your residential address. So in the UK, that's what a bank has to do. Now, the easiest way to do that is a passport which has your name and your date of birth, which doesn't have your residential address on. So then the requirement is to confirm residential address. And there are a number of documents that are suggested, and a lot of banks in the UK will say, we need a utility bill. The requirement is not a utility bill. The requirement is to confirm residential address. You can do that a lot electronically now, by banks, you can do it by scrolling through the electoral register where somebody's registered. And a lot of bank accounts can be done online nowadays, because it will use electronic checking against a number of firms and make sure you hit a mark. So the actual requirements from an AML perspective, are not that great, really. It's two documents to confirm your identity and it to verify it and confirm those three elements, name, date of birth, a residential address, from an AML perspective, that's nice and simple to confirm who you are, but then banks add risk ratings and things like that. So if you're just John Doe off the street, you want to open a retail bank account, it should be quite, quite straightforward. Banks will tend to do searches on you against public domain information. So if you've got a criminal record, particularly in money laundering or fraud, then you become heightened risk. The list starts to ask more questions. So for a standard retail bank, if your name pops up on a list and you've got a criminal record, expect to be asked greater questions. Other questions that the banks were asked were, where did the money come from, to put into this bank account, and how do you want to use it? So those are the commercial questions as well, but the bank's very interested, where did this money come from? So the source of funds, or the source of wealth which are coming into this account. Source of funds is the deposit into the account, and then the source of wealth is, How did Mr. Customer accumulate his wealth? And that becomes very important for, say, a wealth management account, investment accounts, etc. But. Where there's a large amount coming into the account. So the definition of large can vary.

Monem Salam:  
Sure. So on the back end of it, I mean, I mean, like, I know that, for example, you know, in the recent environment that we have, probably, over the past 20 years, a lot of things have become online, obviously. And you know, you come up with a name like Muhammad Ali as an example, right? So Muhammad Ali, there's, like, probably, you know, hundreds of millions Muhammad Ali's out there, and that's where you verify with your passport or other things like that. But sometimes they do end up failing you because there's a Muhammad Ali living in somewhere else, and he has a criminal background and  those type of things. So I'm assuming these, these databases are not perfect.

David Skade:  
They're not perfect, but that's why you collect the additional information. So you want place of birth, country of residence, so you start to build the profile. So as you get the data, as you say, using a name like Muhammad Ali, you'll get 1000s of false positives. You get all of these people. But then you can strip it down. You know, anybody that's not born in that year because you've confirmed the year on the passport, anybody that wasn't born in the area that this man says he was born. So you stream it down by adding different data points in until you're quite confident that you've got the Muhammad Ali now, most people have more than one name, particularly in the Muslim faith, people will have more than one name, won't they? They won't just have Muhammad Ali. I'm just David Skade but I could have somebody David John Skade. We could have you know Mohammed Abdullah Ali, so you start to narrow it down by other data points that you would do there. And usually you can get pretty close. But at this point, there's no harm in the bank asking the customer we found some information about such and such a body. Can you confirm this was you? Or if it is that person, you can always ask them the question, it's not a secret. It's in the public domain. If I have a criminal record, but it's been spent, then the bank can make a risk decision  on whether they wish to provide banking facilities to that customer, or whether the criminal activity or some other news is such that they don't want to manage that person.

Monem Salam:  
So great. And then the second part of that was, was you mentioned, where does the money come from? And that's an interesting one, because obviously you know older generation of people, they never were asked that question. So they're always on edge whenever you ask him where the money come from. I'm being one of them, even though I'm very, very young, but, but, but kind of the idea here is, is that it seems, just seems to me, like, you know, when you have, like, if you look at all the different money laundering, you know, criminal charges that have been placed against banks, right? It seems like when you're putting moving over $75 million they don't ask any questions, but if you're moving over 7,500 they'll ask you all a bunch of questions. So it just kind of feels weird that there's the smaller people who are trying to just send money back home, or, or, or, you know, like happens in the US or, and you know, you know, you're on the board of Muslim Aid. So when we're trying to send charitable contributions somewhere else, it's those the types of things that are stopped.

David Skade:  
And I find that an interesting perspective, because people say, Oh, it's a new requirement. It's not a new requirement. As far as I'm concerned. I've been in banking 40 plus years, and when I was opening, opening accounts for people 35, 40 years ago, I would ask them those sort of questions. Maybe it was just me, but you should understand your customer's needs, because most banks work on a we have a customer, we sell them products. If you don't understand the customer's needs and what they have and what they want to use the bank for. How can you possibly sell the products? So asking those questions, what do you do? And you don't have to ask directly, where does your money come from? What do you do as a job? What kind of salary can we expect to see in the account? Do you have any other assets that we should take into consideration here, because the more you know about the customer, the more you can offer them the products that you have available. For example, do you have a property? Is it mortgaged? Are you looking to move? What is your current term of your mortgage. Maybe we can look at that when it comes to expiry. But what you've done, you've gathered information on assets. Most people's primary asset is their how it's their home or a pension pot or savings, but you can start to work out from if Mr. Customer is on a salary of 100,000, but he's got 5 million in savings. How does that compute? So you have to do a little bit of maths. You know, even if you've got 100,000 a year, say you spend 50,000 on living, you're not going to accumulate that amount of savings. So you ask the question, Where does that come from, how is it managed? For me, that is what a banker should be asking. It's a relationship so, and I think a lot of people hide behind the money laundering requirements, where, for me, they should be doing this as a banker offering a service to a customer, a bank should be helping a customer manage the financial assets that they have. That's a principle that I've always applied so and I've worked in retail, corporate, wealth, investment banking, and I've always come up against that challenge with they determine themselves as relationship managers. And I always say your job title tells you what you should be doing. Bring your relationship with the customer, and that means understanding what financial assets or information he has available, because you, as the banker, should be looking to manage that.

Monem Salam:  
That's true. And also, I mean, it's just a simple rule of knowing your customer.

David Skade:  
Exactly and people hide about it, because it's now become, let's call them buzz words in the world of AML and the financial crime teams, they'll use these phrases, and they've become common phrases now in banking terminology. But in all my years, unless you know your customer, why have you got a bank account for it?

Monem Salam:  
And so, you've been in the museum in the industry for quite a while now. And you know, I mean being a Muslim, living in the US, or even if you're in the UK, it always feels like we have a little bit more stringent requirements that are there. Would you, would you kind of confirm that? Or that's something that's  really not, I mean, we don't know what other people doing either, right? That's we only getting get it. We only get affected when we're the ones who are getting the extra screw in that type of the food. You have a much more bigger picture on the working for a different bank.

David Skade:  
Now, a good example was I, when I came out of the retail corporate world, I first started working in a Middle Eastern wealth management firm, and the requirements as we know them in the UK now were just coming in. It was N2 in the year 2000 the FSA was around, or just forming the pre runners to the FCA, as he is now. However, one of the requirements was, you need to get a residential address. But in Kuwait, as the country was, people don't have utility bills. They live on the third house on the corner down from the petrol station, and they have a PO box to receive their post. So I said, well, the requirement isn't to get that utility bill. The requirement is to confirm residential address. You have to understand, not every country operates the same way as the UK, where you've got a or the US, I'm assuming for you, you have a utility and you have a bill. It operates in a different way people, but people have a nationally a national identity card and a passport, and there'll be some information on that national identity card that ties them to a PO Box number or something like that. So if you get those two pieces of information, you've confirmed their residential address. But just because it's not in the format that you're used to doesn't mean that it's not true. So that flexibility, I think, is a key element for somebody in the roles that I've had is understanding the environment that you're operating in as well. Other examples would be people in old folks homes, care homes, they won't have utility bills because everything is taken care for in the home. And people you say, we can't get utility bill, we'll have to close the accounts. No, no, write the manager of the care home. Will identify who he is, and he'd get him to confirm that Mrs. Old Lady or Mr. Old Man is resident in that care home. They may not have a passport anymore because they don't travel, they won't have any utility bills, but they should not be disallowed from the banking circles. If you take that to the Muslim one as well. I think when they do searches against names, if bringing those data points together is sometimes a challenge for the banks, not in a format that they're used to. But this has been around a long time now, and banks are getting better, I think, at stripping the data down, but there's more and more data available. You're going to get false positives at any time, and always banks work on a risk versus profit, if we have to make profit otherwise, why are we in business? If it's  taking too long to process, are we happy with that from a risk perspective and the cost of doing business? And so some banks will say we only want low risk customers. Other banks will say we only want this type of customer, but that's they're allowed to do that and wealth and investment firms, you'll only say, we only want people with minimum of 10 million of assets, or the ability to grow to 10 million in a short term. So that's where you would be looking at those source of funds and source of wealth is that potential as well.

Monem Salam:  
So I want to come back to this, this idea, this whole idea that we've been talking about, which is really about knowing your customer, and it's a good segue for us to be able to move into, I mean, I guess, you know, recently, I would say, in the past, let's say four or five years, but it's been a growing trend, but it's really picked up. Has really been idea of opening or money laundering, opening up fake bank accounts. It's a lot of times it's these bots that are doing it, and those type of things. And so, you know, segueing that into now talking about just basically scams, right? Where, you know, somebody calls you up and says, Oh, I need, you know, we need this much money, and those type of things. And I can tell you, David, you know, I've had one scam in my life, and it was for a small amount of money, but I still remember it, right? It's one of those things that hurts a lot, well, and I was lucky enough there was a small amount of money, but there's other people who literally lose their life savings because of it. So I wanted to talk a little bit more about that, how, how it happens, how people, you know, kind of, you know, get suckered into it, those type of things.

David Skade:  
Well, let's, let's focus on that one with you. And we don't need the full details. Monem, but what do you think was the hook that made you whether you went down the investment route or whether you sent some money off to it? But let's talk even, what was the initial engagement? How did, how did, how were you approached?

Monem Salam:  
Yeah, I was on a phone call, actually, and it happened to be very interesting. I don't know if they knew this in the in advance or not, but they probably did. This is back in the early 2000s let's, let's say that first so I had just gone back from a conference being held by a bank, a major bank, and the person basically knew that I had was there, and he said, Hey, I I'm from this from this bank, and I'm coming to Bellingham to see you. And basically, I just, you know, my wallet got stolen. I don't have any money. Can you help me send over some money so I'll be able to do that? Now this gets into the affinity marketing part because he was, you know, he was Muslim, or he was these proposed to be Muslim, you know, he said, Salaam, alaikum. He, you know, basically, as he was talking to me, was talking about how we should be helping our brothers out, and if they're in trouble, we should be doing that. He was using verses from the  Quran saying, sort of, he was doing all the right things.

David Skade:  
Playing on sentiment. These people are skilled, and what the world we live in today is so small. Social media, people will go to events, they'll post it on LinkedIn, they'll post it on Facebook, they'll post it on Instagram, they'll post it wherever. Hey guys, I'm in there, such and such a point the bots are searching for that. The bots will find all that bots now, but previously, it would have just been scammers, individuals, yeah, and they will be trained. They will have a script that they use, and they will play they will know that you're Muslim. They will know the words to use. They will know to play on that sentiment and emotion. Emotion is a key thing here. That's why a lot of old people are targeted, because they're vulnerable. So emotional vulnerability, and then so the hook for you was helping a brother, helping a brother who's in need. Yeah, and I'll fall for that one. The other one is greed. People will pick up on greed as well. People and people often say to me, why did somebody fall for that? I said because they were greedy. They've made money previously. They want to make more money, and they will put money into it. I've advised friends say, Do not send 40,000 pounds to such and such a place. Few weeks later, oh, I think I've lost my money, but I might be able to get it back just wave bye, bye, bye.

Monem Salam:  
Yeah. I think here we're talking about two, two different areas, right? So you're right, you're absolutely right. One is on vulnerability and the other one is on greed. And I think you can probably bucket those in two separate areas. So let's just kind of focus on this, since we're talking about greed just now, I think the classic greedy financial scheme is a Ponzi scheme. So let's start just by, you know, everybody talks about Ponzi scheme, but let's try to break it down. How would you define what a Ponzi scheme is?

David Skade:  
So it's a Ponzi scheme where they, they promise you riches. If you join in, make a deposit, join in, everybody's doing it. You don't want to be left out, because then you'll be losing some money. You put 100,000 in, you'll get some more people in. You know that. You get them to put 100,000 in, you'll get a percentage of it. The money disappears before it's even gone. I've got a good example here. There's a big example. It's in the public domain. It's one called Payvision B.V., where ING Bank is the sole beneficial owner of this. This firm, the number of players in this, and it's a payment services payment institution, and it's a boiler room scam, okay, so like a Ponzi scheme, so, and there's a number of firms. They ripped off thousands of unsuspecting European customers, boiler rooms, investment scams through firms like X trader, FX, Option Stars Global, the fraud, money laundering and these people were all sentenced to lots of jails. So what happened? Payvision held a license as a payment institution for the Dutch central bank, and they were founded by this guy called  and his partners. They were providing payment services for online shops, and it acts as an acquiring partner for operating companies merchants of the various websites and the flows go through specific vehicles, stitching trusted third parties and other such things.

Monem Salam:  
So they're asking for either they're trying to raise equity capital. Is that what they're doing?  So let's supposing I gave them $10,000 right?

David Skade:  
You've done $10,000, they've said you've got to get in soon. Option 888, is a great firm you're going in. Or FX Trader X, you've got to go in 10,000 we do FX options or things of that nature. You for every profit, you will get a return and but you've just got to go and get some other people. But if you finally know these people, these people, getting everybody to invest 10,000 pounds, or 10,000 euros, $10,000 whatever it is. And all of these funds were going through this firm P  ayvision, and they were all through shell companies. Mostly were British, with nominee directors and nominee shareholders. So the infrastructure of our Andes was very you know, nobody knew who was behind it all. And so when you go KYC from a bank's perspective, nominee directors and nominee shareholders should be a red flag for the people that are being scammed. If you get like, You got Monem,   a cold call, somebody trying to offer you something or wanting something from you, and it sounds really, really good. They may not be successful with every phone call, they only need to be successful being one, one a day, yeah, but all they're doing wait is on the phone. 15 minutes, phone call, then the next one, next one.

Monem Salam:  
So now I've sent the money in, right? And this we can leave it as a general for a Ponzi scheme. So basically, what's happening is, is that they're taking the initial money. They're guaranteeing, you know, huge amounts of money, right? So I take it from you, if I'm the if I'm the bad guy, I take it from you, and the next person that I take it from, I give you the return of whatever that is. So you're really not investing anything. You're basically robbing Peter to pay Paul.

David Skade:  
Well, they're not, they're not, they're not giving you 10,000 back. They're giving you a small percentage as a tease. So you might get a small so when it starts off those little teasers, maybe 5% you know, for everyone, you might get 5% so and you think, Oh, this is genuine. I'm getting a return already. You get a quick return, and then it'll suddenly escalate. And. Yeah, it just takes, like playing Jenga, one person pulls a piece out, and it all falls down. Now I

Monem Salam:  
I remember, there's a, there was a there was this in the Muslim community in Chicago, there was a firm called Sunrise equity, and this is public information as well, and they were doing very similar things. I remember very easily talking to friends of mine, and they're like, Yeah, I put some money in this real estate company. They're going to build these huge buildings and we're going to start getting a return. And then when I looked at it, he said they were promising, like, 25% return per month or so. It was something ridiculous about, I can't remember exactly what it was, but some ridiculous I was like, There's no way this, this is possible, right? It's not. If it's too good to be true, you should really look into  it further. And for the first couple of years, it was working really good. People were getting money and those type of things. But then all of a sudden, within one day, like it disappeared.

David Skade:  
There's something that always happens in these scams. And we've, I think we talked about previous about crypto and Bitcoin, things like that, and we the two big ones. Yeah, Sam Bankman-Fried, both of them, if you look into it, neither of them had substance. I think Rugatova with, uh, they didn't even have blockchain in there. There was no blockchain in there. And they generated, so if they'd carried on, you calculated that the amount of bitcoin that they were saying was going to be available was more than the amount of US dollars in circulation. Now, not all the US Dollars are in the US. US dollars are everywhere. And if you think about that, that's huge, and you start to put it perspective, but people get greedy. Ah, I bought these Bitcoins. I'm going to make all this money on them. And that greed emotive element is what the fraudster plays on. If we go back to the Payvision one, just to give some context here, yeah, there's some amount stolen. Now the two people, the main players, were Yuvey Lehoff and a guy called Rudolph Bucha. Now there was 55 million went through Payvision. The total companies and platforms attributed to another one of another players, a guy called gal Barak, who was arrested in Bulgaria, was 75 million. So we're talking 130 million. That's part of the fraud. The kicker for the bank ING when they were prosecuted for money laundering, because this law went through them, they will find 775 million, 30 million fraud. Now that's the upfront cost. The cost of remediating for ING bank would probably be equivalent to the amount of the fine and probably be on a five year watch list with the banks. Now, the thing here, before ING started working with these people, we talked about KYC before both Len Hoff and Barack from 2016 were the financial market supervisors advised the bank against the fraud schemes being run by these people, but they still went ahead. So the bank ignored the information that was available in the public domain. So banks will search that they've either not found it or they've ignored it. Just because they've not found it doesn't mean it's not there. So their search capabilities could have been brought and we can talk about process, if you want, about how deep banks need to go, but that is a good example where the bank has not been aware people have been scammed. There was a there's a whole host of companies. I've got about a list of 12 companies here that these two people through Payvision used as boiler room scams. Yeah.

Monem Salam:  
Yeah, it just seems like whatever the newest thing is you you want to do, then that's, that's what people are going to take advantage of. Oh, the scammers that are out there going to take advantage of.

David Skade:  
Scammers will stay one step ahead.

Monem Salam:  
Crypto is the new kind of scam again, because Bitcoin has been going up, everybody wants to get involved. And so, like, here's this new greatest thing that's happening, you need to get involved right away, right? And so let's talk about red flags, right? One is a sense of urgency to do something before you can do your due diligence on it. The other one is too good to be true. Yes, right. What else could, could, could, could we think of that that would be kind of warning signs?

David Skade:  
The pressure to do it now, lost opportunity. That lost opportunity if you don't do it now. This won't be available tomorrow. Okay, right? You know that, and that's pressure. They'll put pressure on you as well. So you can you say that's too pressure and lost opportunity.

Monem Salam:  
And then I remember on the in the case of Sunrise Equity is like they would, they did have an offering memorandum, right? But there was no you know, SEC disclaimer. There was no you know. So that's the other part of it. I think that's really important, is that you know, all the, all the areas that I've seen where the scams have happened there hasn't ,you could easily look at, let's supposing if there was an offering. Sometimes there's not even that. You just, you know, I'm your brother, please, trust me, that type of thing, which is, you should raise a red flag. But the other part of it is, there's, there's a process you need to go through on from the regulator side before you can raise money from the public. And a lot of times that doesn't happen either. So, so maybe that, that could be another sign, right? Show me your offering memorandum or prospectus or something like that.

David Skade:  
And if you get one, read it, yeah, check it. Because a scam, an organized scammer, will have these things ready and will have it proofread. But a lot of people, when you ask them for something, they'll say, oh, we need this. And they'll scurry around. I've seen documents signed with dates on that don't even exist. 29th of February, really. No, the 30th of February. And you know, you read through these spelling mistakes, you know, written in a language that they expect you not to be able to translate to your document because it's stamped by a notary. Yeah, but I'd like to read the read the content. People always say to me, David, do you have to read it all? Yes, I do. I read it all. I read it every page. Yeah. Might not read every single word, but I'll read every page of a document, and I will send it back and say, This is wrong. And the number of frauds that I've picked up by documents and they're not being signed dated incorrectly. There's just something on the document, the copy looks wrong. So if you receive a document, be careful about it as well, because the fraudster will have all of this available. If you ask a question like, Can I have some documentation to support your proposal or offering? They may have something available, but it's likely to be flawed. There may be spellings. They may spell your name wrong. Oh, well, that was the previous one that we did. Oh, little indicators.

Monem Salam:  
You could also, I guess you could also do is, if they offer you an offering memorandum, you can, like, I know, in the in the US, if they offered you a prospectus, you can go to the SEC website, Securities and Exchange Commission, you can just type in their name and see if something comes up, because most likely, if it's a fraud, they wouldn't have taken the time to register with the SEC anyway. So, or in the UK, FCA, right?

David Skade:  
Yeah, another one. When you talk about if you ask for security, so if somebody wants a loan from so they come to you and say, Can you lend me this? Or what assets do you have a security? Why have these houses. Here's the documentation. Does the house actually exist? That before you know, the house doesn't exist. Google Maps. Now, apparently it's great for a lot of people, but go, we go and visit it. Go, does it there is it of substance? You know, little things like that that some people don't do simple because you'll be under pressure to do it, but pick up the phone. I've, I've had people say, Oh, he's very good character. He's got great character. And I said, Well, does anybody phoned the office? We have an office in Pakistan. Phone Pakistan. Oh, yeah, we know that guy. Yeah, he's just been charged with corruption, but it's only in the local papers, so it won't be in your search in the UK or US, but pick up the phone to people, your network to call out some of the things that the fraudster is telling you.

Monem Salam:  
So this is really important for people to know. So one of them is, you know, the time sensitivity of the matter, right? The other one is the  get rich quick. You're going to make a lot of money, really, really fast, right? The third one you mentioned is documentation. What can they what can they provide you? And then even if they provide to you, the fourth one is check on what it is that they're that they're doing, do, do your own due diligence because of it. And if it takes work, then you can get a return. If it's like everybody, if it gets you a quick then he could, they could have probably just done it themselves without getting your money out of it.

David Skade:  
If it's bona fide, it'll still be there tomorrow. If you miss a cut off date, then you're not in any worse situation than you were today.

Monem Salam:  
That's a very good point. It's like, if you, if you don't get involved right in the in the get rich quick, then you know, I'm no better off tomorrow than you were today, because you still have your

David Skade:  
money. Well, you probably better off. Yeah, you're probably better off. Well, your life won't change, will it? You'll be in the same situation that you were today, and you always have, I always say you have two options with anything. You either do it or you don't. Yeah, those are your options? Yes or no, it's binary. If you keep life binary, it becomes a lot simpler.

Monem Salam:  
Now, one thing that I did want to talk about is a little bit about psyche, and that is that, you know, I'm a very optimistic person, so I'm going to say this, right? So there are certain people that are out there that are literally like they run scams. That's what they do for a living. Yes, aside from that, there are company, I mean, I mentioned to you, Sunrise Equity in Canada, there was Aum financial, or you can take the biggest one of them all, Bernie Madoff, right? So my, my thing is, is that, you know, they usually start off legitimate, and then something happens where they need to do something which is maybe a little bit illegal, or those type of things, and then they go down a rabbit hole that they can't get out of. Would you say that's been your experience as well, or is really all these even the bigger scams, like Bernie Madoff, were they literally, from the beginning, out to get everybody?

David Skade:  
I think some people like you suggest they go down a road and they rget too far in and they have to continue. So one of the first frauds that I looked at was Robert Maxwell. So he was in the four miracle newspapers, and he rrgot into a hole, and he's borrowing, he's trying to go very big, and going big costs money, and he had all of this money in these groups, and he was using the four groups of company is if it was his, almost his personal treasure chest. You know, I've got 7 50 million. I can do with it as I want and but as an individual, you have to remain separate from the corporate. You can't go dipping into the pension funds of various companies. But I looked at after the event, so it's easy, with hindsight, to look at these things, reading a lot of the papers that were there, bankers, particularly, got pulled in by Bob Maxwell's personality. Everybody wanted to be part of Bob Maxwell. So as a banker, we've got Bob Maxwell on our books. We've got Bob Maxwell, you know, and people will do it with the current US president when you've got Donald Trump on our books. However, when you look at these things with hindsight, people forgot the control element that a bank would normally do. Now, I'm an optimistic person, but I'm also very risk focused, and people in banking will say, Well, David, you know, we have to make a decision, but we need more information to make the right decision. And so when I look at Maxwell from a perspective of hindsight, you can see the lack of control, because people were, strong word, but bullied by Bob Maxwell. He was a big personality but people wanted to be part of his world. They want the caché of having him on the banker's books.

Monem Salam:  
Was that something like, for example, you know, they could see that he was a successful person, and they wanted to be successful like him, and he was able to play off of that?

David Skade:  
Yeah, they ride on his coattails, but one of a metaphor, but the banks wanted to have him on their books because of the caché of having him on the book. Well, banks, banks will want to have Donald Trump on their books because he's Donald Trump. He's a wealthy man, allegedly.

Monem Salam:  
Wealthy or not, he's definitely President now, so.

David Skade:  
Having the President of the United States as your customer is huge, but he carries a lot of risk and control. That you have to apply. If we extend that, there was a case, and it was in the pulley domain Barclays, they were fined 72 million. It's going back to about 2014, 2015 and they onboarded a PEP and it was a Middle Eastern prince.

Monem Salam:  
So PEP is a politically exposed person.

David Skade:  
Sorry, a politically exposed person. Now, the due diligence you have to do on a politically exposed person is quite high. We talk all about a source of funds, source of wealth. The Bank did not do the due diligence correctly. They did lots of, let's search the Internet to death and print everything off. But what they didn't do was go and speak to the customer to confirm the amounts of wealth. Because the deal that they were doing involved  big numbers. We're talking billions here. They relied on what was on the internet without substantiating it through documentation from the customer. So you can read on the internet that Mr. Crown Prince is worth X million, but where on earth does that come from?  And a good example, when I was at the same bank, we had the Queen Elizabeth the Second as a customer. One of the banks was working, which is not unusual for some of the banks. And when you were doing her sort of work, if you use the Times Sunday rich list, she was worth 500 million. If you used Forbes, she was worth billions because Forbes used the state houses of the ad state thing. So there's a big disconnect between what she was actually worth, I don't know, and what it was perceived that she was worth in Forbes  So it depends which source you use. So you have to put perspective around it.

Monem Salam:  
I really want to highlight on your point about, you know, just the having the people around you want to be part of that circle that is successful. When you mentioned what Bob Maxwell, because a lot of the a lot of the scams that happen are, you look at the person, they have an online profile, they know nice cars, and then doing that like, well, I you know, your brain tends to think, Oh, well, if he's successful, then I can ride his coattails or her coattails, and I'll be successful as well. So when they ask for money, I'll be able to easily give it to them because of that reason. And you find that more and more. I mean, I remember when I was in Malaysia, there was the one Malaysia development, Burhan one MDB, which is the largest ones that was there. And that's was, I mean, the main guy was bringing Leonardo DiCaprio and all these actors and rappers and all these things. But people don't realize that a lot of times these, these celebrities show up, they get paid for it. Yeah, right, they don't. They don't just show up because they're friends. They get paid for it, for showing up. And so, you know, for  people who, who don't know that, is, that is a huge, huge part of it. So I think one of the other ones that I would mention is a red flag would be, you know, what is their online profile? Is it too good to be true as well.

David Skade  
Yes, oh, definitely, definitely, definitely, yes. That's identifying it. Then have you verified it? And one of the key phrases throughout my career, evidence to support. Yep, is what you should go off.

Monem Salam:  
President Reagan said trust, but verify.

David Skade:  
Exactly. I trust you, show me. [laughs]

Monem Salam:  
Absolutely. And I think we've kind of been, kind of been going in and out of this, as we've been discussing, which is basically affinity marketing. And I will tell you, when I was suckered back in the 2000's that was affinity marketing, he played really on my emotions and  my need to do good to be able to do that right. That's, that's, that's, that's one of the big things. And I think you will find that in a lot of different areas, whether it be, you know, whether it be businesses that are going after your money, to be able to, quote, unquote, make switches. Or it could be charitable as well. It could be something where you say, you know, it could be an individual or a group that says, basically, that, you know, we really need you to make and give us money because we're going to do good those type of things. And then you get scammed that way as well. So.

David Skade:  
Oh, definitely. And I think one that, as really, they really play on now, it's that fear of missing out that FOMO, particularly with the younger generations. I can say that as a  gray haired, old man, um, he said that, that fear of missing out. Oh, everybody, they'll say, everybody's doing. This. Don't want to miss out. Do you? Well, show me first, and then, then I'll consider it.

Monem Salam:  
David, thank you very much for your time. It's really been a pleasure talking to you, because I think we've learned a lot. Right what we started off talking about just the process of opening banks accounts, from anti money laundering to knowing your customer, kind of moved into this, the idea of, how do people get scammed? And basically it's, you know, time sensitive. It's outsized returns. Great, too. Good to be true. Falling into your inner circle you want, you need to be part of my success. You need to, you know, to do that that would so all of those things, any kind we just really ended up with more, like the affinity marketing, playing on your emotions, whether it be religious or some other kind of community emotion, to be able to get or extract money from you. And sometimes, unfortunately, it's family. Also sometimes there is a distant cousin.

David Skade:    
Those romance scams that we see as at the moment as well, pushing around those are, those are terrible things, yeah, where people are taking with a whole life savings or pension scams and things like that, but they play on the vulnerabilities of people.

Monem Salam:  
Yep, they do. It's very true. Well, thank you very much for your time. I appreciate it.

David Skade:  
Thank you for asking me. It's been a real pleasure.

[music]

Monem Salam:  
Thank you for listening to Halal Money Matters. If you like what you hear, please do rate us on the app stores and also leave us a review. It helps other people find us a lot easier.

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