Investment Fraud 101
Thousands of victims.
Billions of dollars.
Lives destroyed... too many.
Investment fraud. Sounds like something you hear about on the evening news or see glamorized in the movies. As two trained financial investigators who have interviewed too many victims whose lives are shattered, our advice to you is this: Be leery and be on guard. Avoid schemes and scams that promise to make you rich.
Taking from the 1980's big screen hit, "Wall Street", the character, Gordon Gecko, says, "The point is, ladies and gentleman, that greed, for lack of a better word, is good." But beware! Greed can cloud your judgment, compromise your integrity and tarnish your reputation. Most importantly, it can destroy you financially and land some in jail.
What is investment fraud?
Investment fraud happens when deception and trickery are used to convince you that someone can make you a lot of money by investing with them. Fraudsters might say, "Your bank is only giving you 4% on your savings account. But I can get you 75-85% if you invest with me." No matter how sophisticated their plan my sound, their real intent is merely to separate you from your money.
The fraudsters like to make you think they're including you in their circle of "insiders" who know how to build wealth. They might play on the perceived frustrations some have with corporations and government regulations. Such criminals have repeatedly proven that they're willing to defraud anyone - including 18 to 25 year olds.
Examples from U. S. Attorneys Offices' Press Releases
Example #1
In 2007, four Oregon residents were sentenced after pleading guilty to charges from their promotion of a $170 million fraudulent scheme in the name of First International Bank of Grenada (FIBG).
FIBG offered interest rates to depositors as high as 300%. It claimed to have earned more than $12 billion in high-yield trading, and to have acquired assets in excess of $26 billion. In reality, it was just a ponzi scheme. The perpetrators of the scheme paid early investors in the form of "interest payments" with money received from the new, later investors. Much of the money received from all investors was used by the con-artists to fund their luxurious lifestyle.
Examples:
- Defendant #1 purchased a $1.3 million home in Oregon, a $2.8 million home in Nevada, and invested more than $1 million in a tomato farm.
- Defendant #2 purchased a $350,000 yacht and wired more than $1 million to accounts in Austria.
- Defendant #3 and a friend received more than $25,000 per month.
- Defendant #4 chartered private flights between Grenada and the U.S. for $30,000 per trip, purchased three Mercedes automobiles for approximately $200,000, and rented a beachfront home in Florida for more than $300,000.
Sentences for the defendants ranged between 18 and 97 months in prison, plus they were ordered to pay at least $26 million in restitution to the victims.
