Focusing on the specifics is a step that I find helps a lot in narrowing down the source of people's discomfort. (I work in tech support.) However the way I phrased that was probably not the best. Are there any specific fraudulent business plans you are aware of in your experience that pattern-match to what this guy is doing? Various famous cons are well documented on wikipedia. I would guess that if this is a fraud it is unlikely to be an original new kind of fraud.