Translated by Ralph Anzarouth and an anonymous friend
Deceit is the antithesis of loyalty and involves saying something or doing a misleading act in order to delude and dupe one's fellow man. This can take various forms according to the ultimate goal of the cheat.
All these are derivatives of flattery. And you should know that thinking badly about others and the doubting called sophistry stem from malevolence, which is also the opposite of loyalty. As the prophet said (Isaiah 7, 9): "If you do not believe [my words], it is because you're not faithful".
A wise man said that this is the result of four things: the first is that the malicious man thinks that everyone else is evil like him; the second is that he is accustomed to act wickedly; the third is his hatred for the person he is thinking about; the fourth is his past experience. For this reason the philosopher said that elderly people are often anxious since they have been through many experiences during their lifetime. You should distinguish between this anxiety and jealousy1, since jealousy stems from love, as will be explained in its proper place.
This bad trait can be seen in the fox, which when it doesn't find food it throws itself on the ground and pretends to be dead, without any sign of life. The scavenger birds, believing it is dead, surround it, inspect it and gradually come close to it. When it sees that their guard is down it opens its mouth and devours all that it can seize.
King David said (Psalms 12, 4): "Hashem will reject all the smooth talkers", in other words the lips which smooth over their words to give different meanings in order to achieve their aims. King Solomon said (Proverbs 30, 8): "Keep vanity and deceit away from me". Our Sages of blessed memory even forbade us to speak deceitfully as it is said in Talmud Bavli, tractate Baba Metzia 58b, as it is written (Vaykra 25, 17): "You shall not deceive your fellow man and you shall fear the Lord, I am Hashem". They also said in tractate Chulin 94a that it is forbidden to cheat others etc. A Beraita is brought there in the name of Rabbi Meir that one shouldn't pressure one's fellow man to eat with him when he knows that he is committed to eating elsewhere etc. Seneca said that the deceiver will pretend to be unaffected by insults so that he can take a greater revenge [later]. Someone else said a wolf sometimes is to be found in sheep's clothing. Plato said: "Two things distress me: when people insult a rich man and when the fool deceives a wise man".
King Solomon said in his book of wisdom: "Be selective in who you take home since there are many frauds". A wise man said: "It is better for the fraudulent person to die than to live, since even if he were to act faithfully nobody would believe him and everyone will shun him". Alexander [of Macedon] said: "Don't be concerned if you trusted somebody without reason, since suspicion causes many problems". Someone else said: "A person who is friendly with two people who hate each other will not be without doubts". Socrates said: "All those who love, worry; but many people worry without loving.In fact, our Sages of blessed memory aptly instructed us in this respect, when they said that you should suspect all your fellow men as if they were robbers and respect each one of them as if he were Rabban Gamliel. Our Sages further said in Talmud Bavli, tractate Chulin (94a): "The rabbis taught that one should not sell to his fellow men a footwear made from the skin of a dead animal as if it was made from the skin of a slaughtered animal. This is for two reasons: the first is because of the deceit and the second because of the danger". Rashi explains that the deceit is because the skin of a dead animal is not as strong as that of a healthy animal which has been slaughtered; and the danger is because the animal might have died as a result of a snake bite and the venom is still absorbed in the hide. And one should not send to his friend a barrel of wine with oil floating on the surface; it happened once that somebody sent to his friend a barrel of wine with oil floating on the surface: this person went to invited guests to share the oil with him. When he returned and discovered that it was wine, he strangled himself [out of shame].
Note of the translators:
 The author uses in the original text the Latin word "Gelosia".
The whole book Tzemach Tzadik in Hebrew (printed in Rashi characters) can be downloaded in PDF format and read online at Hebrewbooks.org. Chapter 23 about deceit is found at pages 48-50.