Tom Arnold was a smooth talker. In six years he made $3 million in commissions selling supposedly rare and gold coins. Arnold worked for a company called All American Coins, cold-calling potential investors and roping them in on the phone.
Arnold, who is awaiting sentencing on fraud charges, told former investigator Doug Shadel, "What you have to do is keep telling them that the coins went up no matter what's going on in the world.
"Whether oil is doing good or oil is doing bad -- anything that is going on with the economy -- if there's a new president, the coins went up. If it was snowing, the coins went up."
Shadel, who is now the Washington state director for AARP (formerly the American Association of Retired Persons), interviewed Arnold and other con men for a new book called "Outsmarting the Scam Artists. How to Protect Yourself from the Most Clever Cons." Every con man has the same basic technique, Shadel told ABC News. "Their goal is to get you into a heightened emotional state." Shadel says the scammers call it "the ether," a reference to the inhaled anesthetic sometimes used to knock out patients before surgery. When con artists get you into the "ether," the rational mind goes out the window and the emotional mind takes over.
"If anyone spent five seconds thinking logically about any of these offers, they would never do it," he said.
So, Shadel warns, if someone is trying to pitch you on a deal, and your "heart is palpitating, you have sweat on your palms, you can't think of anything but this offer," you're in the "ether" and you need to slow down. "I think the number one piece of advice," he says, "is never decide to buy something at the time you hear a sales pitch. There's no deal out there that can't wait 24 hours." Shadel says that allows you time to get out from under the "ether" and do due diligence.
Arnold and his fellow salesmen were masters at the job. All American raked in $40 million in eight years, defrauding more than 1,500 victims in all 50 states. Many of those victims were elderly and thought they were buying coins that would increase in value and help support them in their retirement.
One such victim was 82-year-old Walt Sheppard. Sheppard was a retired small businessman in North Carolina. Over a number of years, Arnold sweet-talked him into spending his life savings, and even borrowing money, to buy the coins. Sheppard and others did receive the coins they paid for, but they were worth a pittance, nothing close to the promised value.
Sheppard told ABC News the loss of his money, about $150,000, has been devastating. He estimates the value of the coins he received at around $15,000.
"I am just on the edge of bankruptcy all the time," he said. "I haven't been able to pay my taxes, the hospital bills, my credit is really terrible bad, and I used to have next to the best credit."
In his interview with Shadel for the book, Arnold said as soon as the unsuspecting investors bought and received their first coins, All American would call back with the good news that the coins had already gone up in value. The values were made up, but investors were reeled in time and time again. That's what happened to Sheppard: "They were of course they were very convincing, I assure you I should have had sense enough not to do it. I should have known better."