1. Principles of Deception and Counterdeception The Bernard Madoff Case Michael Bennett April 2009 All statements of fact, opinion, or analysis expressed are those of the author and do not reflect the official positions or views of the CIA or any other U.S. Government agency. Nothing in the contents should be construed as asserting or implying U.S. Government authentication of information or Agency endorsement of the authors’ views. This material has been reviewed by the CIA to prevent the disclosure of classified information.

6. Deception Cycle Targets the Vulnerable Mind The Vulnerable Mind Analyst or decisionmaker Ambiguous, uncertain, inconsistent, contradictory, or missing information Flawed perceptions and judgments Decisions and actions that benefit the deceiver Deception story Channels, delays, and noise Reconstructed Story Deception Objective Deception planners exploit target’s, expectations, preconceptions, beliefs, fears, and biases. The deception story is presented to the target through multiple channels known to be monitored by the target. Target reconstructs the basic elements of the deceiver’s story, and since it is consistent with the target’s beliefs, it is accepted and acted upon in the manner the deceiver intended.

10. Fundamental Principles of Deception All deception works within the context of what is true. All deception requires deceit. Deception depends on manipulating what the target registers. Deception Truth Deceit Misdirection Provides the target with real data and accurate information Provides the target with false data and wrong or misleading information Determines where and when the target’s attention is focused – what the target registers Influences how the target registers, processes, and perceives data and information and, ultimately, what the target believes and does Denial Blocks the target’s access to real data and accurate information Denying the target access to the truth is the prerequisite to all deception.

11. Principles of Deception and Heuristics and Biases All deception works within the context of what is true. All deception requires deceit. Deception depends on manipulating what the target registers. Deception Principles Truth Deceit Misdirection Influences how the target registers, processes, and perceives data and information and, ultimately, what the target believes and does Denial Denying the target access to the truth is the prerequisite to all deception. The source of expectations, preconceptions, and beliefs Out of sight, out of mind Reinforcing the biases Diverting attention and reducing suspicion