It's been a while since I posted something in the "Funnies" category but today I just had to share something with our readers. I just got off the phone with an elderly friend that had received an e-mail from a notorious scam artist that promised daily income with little or no risk.

Her family had told her that it was a scam, and my wife had told her the same, but she still wanted to know what I thought. She had forwarded the e-mail to me. It took me about 5 seconds to see the offer as a scam.

Bernie Madoff, the mastermind behind the world's largest ever Ponzi scheme, arrived at a federal prison in North Carolina to begin serving his 150 year prison sentence.

It will be hard to find anyone sympathetic to the 71 year old investor who will be spending the rest of his life behind bars. We still do not know if Madoff will serve out all of his time at the federal prison in Butner, North Carolina, but for now that is where he can call home.

Bruce Watson recently reported on DailyFinance that Bernie Madoff's victims may be eligible for theft-loss deductions of as much as 95% of their losses over five years.

There's debate about whether that's fair. Some think it's too much, some say not enough, but here's what I say: Why not take a big pile of the TARP money and use it to make Madoff's victims whole?

I know: That's ridiculous, unprecedented and un-American, but do we really have any principle left to stand on as a reason for opposing such a bailout?

A friend forwarded me an email today that looks like many emails you've probably received although, if you have a good service provider, they go straight to your spam folder. Take a look:

Teach Me To Trade -- the company behind those annoying infomercials full of false promises and exaggerated claims -- has attracted the scorn of the Securities & Exchange Commission, which has filed civil fraud charges against Linda Woolf and David Gengler.

The SEC charges that "In order to con victims into paying as much as $40,000 for TMTT products and services, the Commission alleges that Woolf and Gengler lied about their success with the trading system, when in truth neither Woolf nor Gengler ever purchased TMTT's products or became successful traders."

SEC Chairman Chris Cox chastised the promoters for preying on the "elderly, the desperate, and even the unemployed by promising financial security while instead robbing victims blind."

The Commission alleges that, while the promoters portrayed themselves as successful traders, neither of them had ever reported a profit from trading on their tax returns.

The U.S. Attorney's Office for the Eastern District of Virginia has also filed an indictment against the promoters.

Here's where it gets really interesting. The Teach Me To Trade "system" is part of the the Whitney Information Network (OTC: RUSS), which is dealing with an SEC investigation of its own. That company's namesake and former CEO? Russ Whitney, whose rap sheet includes armed robbery.

It's been said before but it's worth saying again; Late-night infomercials are not the place to find the secrets to tremendous wealth, and if it sounds too good to be true, it probably is.

I don't know if there's a god or a heaven -- but the people who perpetrate these scams are going to hell.

The USA Today reports on the growing number of "foreclosure rescue" scams that rip off homeowners on the brink of foreclosure. Some of these companies operate simple advance-fee scams -- they send homeowners letters promising to help them negotiate with their lender for an up-front fee of a thousand dollars or less. And then that's that. Other schemes are more complex but they all follow the same basic formula: take advantage of the desperation of people who are about to lose their homes.

The Better Business Bureau is receiving tons of complaints, and state attorney generals are filing lawsuits. But with a fast-growing industry like this, consumers probably have to protect themselves. Here is a resource to help: The Housing and Urban Development department has a list of mortgage counselors that have its blessing. You can search by state here.

Your best bet is probably one of the many non-profit counseling agencies, whose employees are working tirelessly for low wages in an effort to help people.

One of the biggest mistakes that got people into toxic mortgages was that they went with private subprime lenders, unaware of the government programs designed to help first-time home buyers. Now, people can avoid compounding the problem by picking a non-profit counselor.

As a dog lover, I have to say that this is one of the most evil scams I've seen in a long time. According to The Consumerist, the latest advance-fee scam works like this:

You're browsing through an online classified ads site like Craigslist, and see a cute little dog available for adoption. You email the poster who replies that there is no fee and that while he hates to see the dog go, the weather in Africa is no good for him. If you could just pay the shipping fee, he'll be happy to send you the dog -- and so you wire him the shipping fee and, you guessed it, never hear from him again. In some cases, he may string you along with more requests for money but, either way, you ain't gettin' the pooch.

These con-artists should have to share a jail cell with Michael Vick.

[Photo from BurningWell.org]

Yahoo, Inc. (NASDAQ: YHOO) and eBay, Inc. (NASDAQ: EBAY) are partnering up this holiday season to try and keep all those nasty but legit-looking email messages out of your Yahoo! Mail inbox. Yahoo! is by far the world's most popular web-based email service and I can only imagine the effort it takes to sniff out fraudulent and phishing email messages from tens of millions of inboxes every day.

In many cases, Yahoo! Mail users will receive official-looking messages that appears to come from eBay or its online payment division, PayPal. Those who are fooled into divulging personal information like passwords and account sign-in information usually have a large headache cleaning up the identity theft mess later. But, what if those unofficial email messages never arrived in your inbox to begin with?

Last last week, the three companies (PayPal is a wholly-owned eBay subsidiary) announced that the DomainKeys e-mail authentication system would be used to block malicious email messages from the inboxes of Yahoo! Mail users. Yahoo! stated that the upgrade would occur over its global email network for the next few weeks, allowing it to verify the domain from which email messages arrive. In other words, those Russia-based fraud emails that look like real eBay communications may soon be blocked for good.

This is a great initiative between the largest email provider and one of the largest commerce sites on the entire internet, and it's perfectly timed for the holiday e-commerce season that's already underway. Now, Yahoo! needs to market this new partnership in every way possible to let customers know what it is and how it can help them. Something like this does no deserve to be just working behind the scenes.

One of the first lessons of economics is that there is no such thing as a free lunch and, if you sign up for one of those free lunch investment seminars, you may be exposing yourself to fraudulent marketing practices.

According to the Associated Press, "An investigation by federal and state regulators of "free lunch" investment seminars aimed at seniors has found high-pressure sales pitches masquerading as educational sessions, pervasive misleading claims for unsuitable financial products, and even fraud."

Senior citizens are big targets for investment fraud, and the free lunch seminars are very successful in attracting this sought after demographic. Among the findings of the regulators who conducted the investigation in seven states:

--The "educational sessions" advertised are generally little more than sales pitches, and attendees are often pushed to open accounts or buy products that day.

--Nearly 60% of the 110 investment firms and branch offices examined showed evidence of weak supervision of the employees running the seminars, including failure to review the seminar materials.

--About half of the seminars included false or misleading claims and 13% included what appeared to outright fraud.

--23% suggested investments that were unsuitable.

None of this is really that surprising. No one is going to buy you a nice lunch at an upscale country club unless there's something in it for them. And you certainly shouldn't expect unbiased investment wisdom with your complimentary fillet mignon. If you want an unbiased advice, seek the assistance of a fee-only financial adviser or read a book like Andrew Tobias's The Only Investment Guide You'll Ever Need or perhaps Why Smart People Do Stupid Things With Money.

And remember: there's no free lunch. Remind Grandpa, too.

Ya know those books from Playboy that are so good you can't put them down until you finish?

Great Business Disasters: Swindlers, Bunglers and Frauds in American Industry, edited by Isadore Barmash and published by the Playboy Press, is just that kind of book. I would actually say that it's the most interesting book of business history I've ever encountered. And it's out of print.

Great Business Disasters is an anthology of some of the best financial journalism of the era, with a special focus on longer pieces covering frauds and mess-ups. We get a piece by John Brooks (author of the also-excellent Once in Golconda) on the infamous Ford Edsel and a fascinating piece by a very young Andrew Tobias on the National Student Marketing fiasco, who worked as a marketing director for the company.

There are a total of 15 accounts of some of the greatest and most infamous mess-ups in business history. Some of these are more obscure but still fascinating, and you're unlikely to find out about them outside of this book.

Reading Great Business Disasters, I couldn't help but lament the fact that this sort of long-form journalism is dying. Only a few great writers -- Gary Weiss and Herb Greenberg come to mind -- are carrying on this art. With Rupert Murdoch having complained that he finds The Wall Street Journal's feature stories too long, this situation seems likely to get worse.

Someone really needs to get the rights to this book and put it back in print -- It could be updated with some of The Wall Street Journal's accounts of the Enron blow-up and, of course, my coverage of Usana Health Sciences (Kidding...). Fortunately, the book is still available. Here are some places to get it used:

• On eBay
• AbeBooks
• Amazon.com (As low as a penny!)

Here's some pretty strong evidence that Americans could use some more financial literacy and fraud prevention training. The SEC filed securities fraud charges today against what the Commission called a "Internet-based Ponzi scheme that raised $41.9 million in just four months from over 20,000 investors worldwide".

That's a lotta lettuce. PhoenixSurf.com offered "investors" an elaborate scheme wherein they could earn returns of 120% in 8 days. Warren Buffett eat your heart out!

The defendants, Jonathan W. Mikula, 21 and Gabriel J. Frankewich, 29, both of Georgia, settled the charges without admitting or denying guilt by disgorging their ill-gotten gains.

The fact that what appears to be such an obvious Ponzi scheme, just based on the returns offered, was able to attract so much money is indicative of how ignorant a lot of people are when it comes to protecting themselves from scams.

Walter Ricciardi summed it up well in an interview with the Associated Press: 'If it looks too good to be true, it probably is... Promises or guarantees of double-digit returns in a matter of days or weeks are highly suspicious and the investor should exercise extreme caution."

It looks like the same greed that inspired Mikula and Frankewich allowed a lot of people to be conned out of their hard-earned money.

In a recent Answer Guy column, George Mannes takes a question from a reader wanting advice on a high yield "investment opportunity." The site that the reader describes pays 10% interest monthly, an annual return of 120% or more, depending whether the interest is compounded. Any savvy investor will know that this website doesn't pass the sniff-test. The old maxim applies: If it sounds to good to be true, it is.

In routing out investment scams, here's the one thing that investors need to remember: Warren Buffett has gained worldwide recognition (and the number 2 spot on the Forbes list) as an investor by earning a compounded annual return of just over 21% on the book value of his company Berkshire Hathaway. 21%. That's the best in the world.

So the website the reader asked Answer Guy about is claiming to be about ten times as good as Warren Buffett. Hmm... And to think I've never heard of it!

So there ya go. That's pretty much what you need to know to avoid being scammed by one of these so-called "high-yield investment programs."

eBay (NASDAQ:EBAY) CEO Meg Whitman last week outlined eBay's current three-prong approach for battling the phishers and scammers who continually prey on unsuspecting eBay users. Red Herring reported that this past Thursday at the VISA Security Summit in Washington, DC, Ms. Whitman made it known that in the continuing effort to restore basic user security to their site would remain proactive and reactive. What I found to be a startling contrast to former eBay attitude on the subject was Ms. Whitman's admission that in this continuing effort eBay could not go it alone, as evidenced by her request for involvement in the anti-fraud efforts by the filtering of e-mail by ISPs, something which is unlikely to happen.

The three-prong approach that eBay is implementing is focused on protecting eBay users from unwittingly divulging important personal and financial information to people who have no business obtaining such data. The plan involves a key fob that accesses randomly generated passwords, the blacklisting of known fraudulent websites, and a request that ISPs only forward e-mail from recognized domains. On their face the conjoined ideas sound legitimate but analysts remain highly skeptical as to their usefulness effectiveness and implementation.

Losses from e-mail phishing and other data diversion tactics topped $2.8 billion for 2006. Reports say that the three major targets are PayPal, eBay, and commercial banks. Gartner analyst Avivah Litan said that eBay is "at the center of this hurricane for fraudsters." While eBay is certainly not at fault for the continuing onslaught upon their membership, this writer maintains that it needs to be far more transparent about its problems, far more helpful to its members, and far more aggressive in the successful prosecution of the individuals who continue to pillage eBay membership.

Key fobs are for keys. Prisons are for scammers. Let's get with it eBay.

I came across an interesting music video from Nigeria today. It's the popular (in Nigeria) hit "I go chop your dollars, " by Nkem Owoh. You can see the video here. It's an ode to the Nigerian email scam, which for those of you who haven't received the email (2 or 3 show up in my spam box every day), involves receiving an email from someone purporting to be the beneficiary of a large inheritance who would like to share some of it with you -- if you can advance them a few thousands dollars so that they can secure the money. Of course, the unwitting victims send in the money and never receive a dime. You can read more about it on ExpertLaw.

The scam has become one of the largest industries in Nigeria, with the government only recently ramping up efforts to crack down on it. Victims include widows and several churches have gone broke with the scam. Many of the fraudsters rationalize defrauding Americans by seeing the scam as their way of "stickin' it to the man," in a country that is rife with anti-American sentiment. The music video provides interesting insight into a culture where scamming Americans is glorified in some circles. Of course, people involved in the scam represent only a small fraction of the country, and most Nigerians are honest hard-working people. But it is certainly interesting that an artist was able to have a hit song with such a message.

Had enough of the malls already? Today is the recently anointed retail landmark known as Cyber Monday. It is the first Monday after Thanksgiving and the day that shoppers, in theory already weary of the extreme shopping experience offered on Black Friday, are ready to shop from the comfort of their office chairs.

The day got its name from trade group Shop.Org just last year and doesn't represent the biggest online shopping day -- just one of the biggest, according to an article in the The New York Times (registration required). The headline predicts, "E-Looking But Little E-Buying," and the article pokes fun at the alleged phenomenon, quoting a retail analyst saying the day is "more hype than reality."

Perhaps this year that record will change as more stores offer special online deals. Barnes & Noble, The Home Depot, Inc. (NYSE:HD), and Petco.com are mentioned in The Times as having special offers today. GottaDeal.com has a special CyberMonday forum listing online offers from Staples, Inc. (NASDAQ:SPLS), Wal-Mart Stores, Inc. (NYSE:WMT) and Best Buy Co., Inc. (NYSE:BBY).