Lulling is deceptive technique that creates false reassurance and keeps victims engaged. In this blog, explore how fraud examiners can effectively recognize, unravel and document these schemes.
The Oxford English Dictionary defines lulling as “caus[ing] someone to feel deceptively secure or confident.” Likewise, the Merriam-Webster Dictionary defines lull as “caus[ing] to relax vigilance.” Lulling can be done during and after the fraud scheme commences, but it can also incorporate smaller, successful transactions that give the victim a false feeling of success and enhance the perceived trustworthiness of the fraudster.
In U.S. v. Maze (1974), the U.S. Supreme Court discussed lulling. Writing in a case involving identity theft, credit card fraud, bank fraud and cross-state travel, the justices noted the importance of lulling in furtherance of the scheme: “Subsequent mailings [by the defendant] … were designed to lull the victims into a false sense of security, postpone their ultimate complaint to the authorities, and therefore make the apprehension of the defendants less likely than if no mailings had taken place.”
Fraudsters seeking to exploit their victims use lulling effectively to assuage them and pacify any attempts to recoup funds or property. Lulling is a means to avoid litigation, delay paying money back or providing the promised goods, services or funds. Occasionally, fraudsters make partial or periodic compensation to victims as “lulling payments,” designed to make the fraud appear legitimate or create the impression that the victim will obtain a return.
The goal of lulling is ultimately to ensure the victim does not disturb the fraudster’s scheme, such that the con continues unabated. A case from 1980, involving the diversion of corporate funds by the company’s president, noted that, “Precedent is clear that letters designed to conceal a fraud, by lulling a victim into inaction, constitute a continuation of the original scheme to defraud.” In that case, the evidence cited by the court was clear: letters written by the president were “designed either to allay suspicions, or to solicit further funds,” and thus were indications of lulling.
Lulling is frequently found in cases involving securities or investment frauds, though this tactic can occur in loan frauds, common cons and other types of financial crimes, too. In addition, lulling can be used in elder exploitation and human trafficking to pacify the victims.
In one case recently documented by The Hollywood Reporter, the article described a long history of lulling by movie producer David Ozer. When a victim complained about not being paid for a writing project, Ozer apparently told them it was “Just a minor setback.” Later, when texting a photo of himself at a bank, Ozer told the victim, “I’m at the bank to figure this all out.”
A 2025 prosecution in the Eastern District of Virginia against interior designer Lisa Stanley shows the lengths that some fraudsters will go. In that case, Stanley admitted to defrauding six individual and two corporate clients by contracting to provide design services and furniture, then failing to provide most of what had been paid for. After clients sent money to Stanley and her company, she performed a minimal amount of work, resulting in the loss of more than $655,000. Prosecutors stated that Stanley “sent her clients lulling communications when they questioned her about the status of the custom items or services they ordered. Stanley would state that the items had not been delivered because she had not received these items from another vendor. However, Stanley knew that these statements were in fact false, because she never paid the vendors for most of the items her clients had ordered.”
Former super lawyer and reality TV personality Tom Girardi used lulling to placate demands by both his clients and other attorneys. Detailed in one court filing, Girardi left a message that stated: “I think there’s been some miscommunication here. I think that we weren’t supposed to distribute until all the money was in so people would get paid at the same time… The money’s in trust… Th[ere] was some negligence here, it’s obviously, since I’m the head of the firm, it’s my fault. Let’s work everything out in a nice way, please.”
All lulling behavior encourages victims in the (false) hope that issues and difficulties will be worked out and to believe the fraudster when they state that “everything will be fine.” These are common manipulative techniques and tactics used by fraudsters.
Documenting these delays, excuses and actions are critical to this type of investigation. For example, in the watch seller case previously mentioned, the fraudster told victims that he had been robbed and the watches had been stolen. Obtaining victim statements and documentation supports the assertions and provides a timeline that a jury can easily follow.
Lulling behavior for an investigator to watch for and document include:
In addition to interviewing the victims (and others with relevant knowledge), documentary evidence is very useful. These include:
Law enforcement investigators may also want to consider including a statement in their probable cause affidavits that describe their training and experience in identifying lulling. In one case involving a large-scale human trafficking operation, the agent stated: “I have also interviewed crime victims, and I am generally familiar with the types of communications, lulling statements, and manipulative techniques often used by crime perpetrators to obtain money, cooperation, and other things of value.” This enables the judge to make determinations of credibility and robustness in these types of complex financial cases.
Victims of financial frauds are often reluctant to believe that they have been defrauded. In fact, many victims are sophisticated and educated professionals who have been lulled into a false sense that things will turn around and work out. The fraudster wants to silence any resistance and pacify people so that they don’t sue — or go to the authorities.
Recognizing lulling is not just about procedural evidence collection; it is about understanding the subtle psychology that underlies these schemes. In a world where trust is the foundation for many financial relationships, lulling deliberately exploits that trust. Shedding light on this tactic helps expose deception and fosters a broader awareness of how these patterns of manipulation occur.
As fraud examiners, we play an integral role in unraveling and documenting the schemes and all the elements therein. Understanding lulling is a key part of this. Whether it is a financial advisor running a Ponzi scheme who made lulling payments to victim investors, or a promoter of Bitcoin and other virtual financial products who stalled victims from making complaints to state regulators, lulling is a core part of any fraud examination.
