RIP-OFF ALERT: Of all the types of fraud, affinity fraud is one that's particularly effective because it hinges on dealing with people who are "like you" -- hence the name. Human nature dictates that we let our guard down when we're approached by someone of the same religion, race, profession, etc.

Consider this example: The Wall Street Journal reports that the son of a rabbi stole $100 million from fellow members of the Jewish community after promising to invest it (with huge returns) in "private placements."

Private placements are an exotic sort of investment where you discover under-the-radar businesses that are poised to boom and then invest in them.

But the rabbi's son was operating a classic Ponzi scheme. He used the money taken from later investors to pay earlier ones, and he pitched people in synagogues throughout Virginia, Illinois, New York, Israel and South Africa.

The Los Angeles Times reports a similar Ponzi scheme saw one criminal steal $22 million from people using the private placements shtick. Returns of 40% were promised. The culprit used the money to fund his lifestyle with his wife and his mistress. In fact, the man gave twice as much money to the mistress as he did to the wife!

This latter example is not strictly a case of affinity fraud like the first one. However, Clark has some advice for you if you're ever confronted with either situation:

• If you don't understand what they're pitching, don't do it.
• Just because someone is your pal at the golf course or a house of worship, it does not mean they're automatically more trustworthy than a stranger on the street.