Scams May Be Hiding in Can’t-Miss Investments
If it sounds too good to be true, it probably is.
That’s the age-old warning people should remember when strangers, or even well-intentioned friends and relatives, tell them about a can’t-miss investment proposal.
Chances are that the proposal is a scam. Far too often, people forget the warning because they are lured by promises of fat returns. And the victims aren’t limited to widows and orphans who know little about finance; well-educated professionals have lost millions of dollars to fraud artists.
What can you do to protect yourself from being bilked by con artists? First, don’t agree to anything quickly. Don’t be convinced that “you must act now†or kiss goodby a chance to get rich. Legitimate investment plans will still be there tomorrow.
Con artists often use such time pressure in sales pitches by telephone and then ask that you give them a credit-card number for verification. Don’t do it. Often they will just use the number to falsely bill your account.
Ask lots of questions, either of the promoter trying to peddle the investment--particularly if you have never heard of the firm--or of family and friends who have already bitten. Indeed, in a technique known as “seeding,†con artists often will give two or three people in the same profession--say teachers or doctors--an actual good deal just so they’ll help enlist their colleagues.
“And that’s when the scam starts,†said Gary Ingemunson, a detective in the Los Angeles Police Department’s major frauds division.
If a colleague approaches you, don’t be embarrassed to delve into the details of the investment. “The best thing you can do is ask a question and keep going,†Ingemunson said.
If the investment still sounds appealing, do some legwork. Call the district attorney’s office, the U. S. attorney’s office, the state Department of Corporations and the white-collar crime units of the police and sheriff’s departments. Ask if there is an investigation of people trying to sell you the investment.
Some of those agencies might not comment. They often keep quiet if they are investigating the people involved. But not always.
“We’ll tell you if there’s an investigation or not,†said Deputy Dist. Atty. Robert M. Youngdahl.
Check the records at the federal bankruptcy and civil courts and at Superior Court to see if those asking you to invest either have been sued recently or have filed for bankruptcy. Combing through records can be arduous and time-consuming. But the effort could save you from a fleecing.
“Con artists will look like they have nothing to hide,†Ingemunson said. “But it will be a thin shell that you can penetrate with a few questions.â€
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